Although Barnes & Noble lost $74 million in the fiscal year ended April 30 and had negative EBITDA (earnings before interest, taxes, depreciation, and amortization) of $204.6 million, executives said they remain confident that the company's online/digital arm is on track to become a solidly profitable business. In discussing year-end results, both CEO William Lynch and CFO Joseph Lombardi said that with's share of the e-book market roughly 26% to 27%, it was only a matter of time before the unit turned profitable. With the share of the market B&N already has, will hit its profit targets as e-book sales continue to grow, Lombardi said.

During the conference call, several analysts questioned the size of's loss and its mounting costs, which rose to $280 million from $151 million. But both executives pointed out that gross margins at improved again in the fourth quarter and that e-books have better overall margins than print book sales. And sales of digital products through outsold all print titles by a three-to-one ratio. Overall, comp sales at rose 65% for the year and 78% in the final period.

While B&N waits for to turn a profit, its bricks-and-mortar stores remained profitable last year, although EBITDA at the retail trade stores fell 26.2%, to $248.5 million, in the year. EBITDA at the college bookstores, which B&N bought in September 2009, rose to $119.4 million.

Barnes & Noble Results by Segment 2010–2011 (in millions)

Sales 2010 2011 % Change
Barnes & Noble Retail $4,401.3 $4,364.2 -0.08%
Barnes & Noble College 833.6 1,776.2 113.2
Barnes & 572.8 858.1 50.0
Total 5,807.7 6,998.6 20.5


Barnes & Noble Retail $336.9 $248.5 -26.2
Barnes & Noble College 24.9 119.4 379.5
Barnes & (80.8) (204.6) N.M.
Total 281.0 163.4 -41.8