Books-A-Million’s bet on taking over a host of former Borders stores in late 2011 paid off in 2012 as the chain reported net income of $2.5 million for the year ended February 2, 2013 compared to a loss of $2.8 million in the prior year. Sales rose 7.5%, to $503.8 million, despite a 3.6% decline in comparable store sales.
Sales in the fourth quarter dipped to $165.5 million from $166.9 million, but net income rose to $8.1 million from $7.5 million. Comp sales fell 6.1%. Most of the Borders stores BAM reopened in 2011 were up and running in the fourth quarter of that year.
CEO Terry Finley said BAM's core book business stabilized during the year and that trend has continued into the new year, noting that sales of physical books exceeded the company's expectations. He attributed the better-than-expected fourth quarter to slowing sales of digital devices and digital content. Excluding digital devices, BAM's fourth quarter comp sales fell only 4.2%.
In physical books, adult fiction sales remained strong in the quarter driven by the Fifty Shades trilogy and other romance/erotica titles. The graphic novel category posted good gains led by The Walking Dead series, while children's books were also up led by "excellent" sales of seasonal titles, Finley said in a conference call discussing results. BAM's merchandise and gift category also had a good finish led by apparel, toys and novelty gifts.
BAM does not provide projections for the year, but Finley observed that despite the good finish to 2012, BAM is facing some tough comparisons in 2013, going up against strong Hunger Games sales that took place early in 2012 and the Fifty Shades blockbuster that began selling in the spring and continued hot throughout the year. Finley said as merchants, BAM is always looking for the next big thing, but said no one knows when another Fifty Shades will come along.