Although first-quarter earnings were in line with expectations, rising 0.9% to $10 million, sales were softer than projected, increasing only 1.5%, to $1.11 billion, at Barnes & Noble. Comparable-store sales at B&N superstores, which were projected to increase in low single digits, were down 0.3% in the quarter; total B&N superstore sales rose 2%, to $980.5 million. A 1.8% decline in comp-store sales and store closings contributed to a 26% decline in sales at Dalton. BN.com sales were flat at $91.1 million.
CFO Joseph Lombardi attributed the weaker than expected sales to a "very difficult" last two weeks in April, when store customer traffic was down. Store traffic has been better in May, Lombardi said, particularly on Mother's Day. B&N CEO Steve Riggio said the first quarter was marked by no special new releases, particularly in hardcover, and a noticeable lack of any media-driven hits. While the religious book segment was up, helped by books related to The Da Vinci Code, no single book topped the sales of last year's first quarter achieved by The Purpose-Driven Life, Riggio said.
Sales of paperbacks were stronger than hardcover, led by the mass market edition of Da Vinci, the surprise hit The Covenant with Black America, Rachael Ray's Express Lane Meals and sudoku books. Paperback backlist sales were solid, Riggio said. Although executives did not go into detail, they said music sales were off on a comparable-store basis. Commenting on BN.com's flat sales, Marie Toulantis said the company continues to be disciplined in its advertising approach, noting B&N "is not in the business" of acquiring unprofitable customers.
For the second quarter, comp-store sales are expected to be down in low single digits as the retailer faces difficult comparisons with last year's megaseller Harry Potter and the Half-Blood Prince. At present, The Great Deluge is selling very well at the chain, Riggio said, and he noted the store's pick for Father's Day is Tim Russert's Wisdom of Our Fathers.