As expected, Barnes & Noble.com had revenues of $109 million for the first quarter ended March 31, 2001, a 23% increase over the comparable period in last year's first quarter. The company's pro forma net loss fell to $33.7 million from $35.9 million, while its actual loss fell to $39.8 million from $57.6 million. For comparison purposes, BN.com included results from Fatbrain.com for all of 2000, although the company declined to mention how Fatbrain's sales were doing in comparison to BN.com's main store.
BN.com's chief financial officer, Marie Toulantis, attributed the narrower losses and BN.com's improved gross profit margin to a reduction in promotional discounts as well as an increase in internal order-fulfillment. In the quarter, the e-retailer fulfilled 80% of its orders through either its own warehouses or those of Barnes & Noble bookstores, compared to 50% in the first quarter of 2000. In addition, marketing costs have come down as the company eliminated offline brand advertising to focus on targeted online and direct marketing programs, a tactic that has dropped the costs of customer acquisition.
BN.com is looking for sales to be between $90 million and $100 million in the second quarter and said it still expects sales for the year to be in the $420 million to $475 million range.
Vice-chairman Steve Riggio said that the first-quarter results show that the company is "well positioned" to gain market share in the online book business. He told analysts that as the company "executes our multichannel strategy" BN.com will create "substantial competitive advantages over pure play e-commerce competitors and retailer competitors without well-developed e-commerce strategies." He said the company continues to move forward with its bricks-and-clicks strategy, noting that although there are fewer than 50 customer service centers in B&N stores, he expects all stores to have these counters, which feature online access to books, by year-end.