A 50% sales increase at BN.com plus a full year’s results from Barnes & Noble College Booksellers offset a decline at Barnes & Noble’s retail trade stores leading to a 20% increase in total revenue to $7 billion in the fiscal year ended April 30. The nation’s largest bookseller had a net loss of $74 million in the year, due in part to heavy investment in its digital initiatives. The retailer had earnings of $36.6 million in fiscal 2010. B&N also said the special committee of its board of directors was continuing to evaluate the offer from Liberty Media to acquire the company.
For the year, BN.com was clearly the star for B&N, driven by both sales of its Nook family of devices plus digital content sold through the Nook Bookstore. Comparable store sales at BN.com were up 65% for the year and 78% for the fourth quarter. The company said Nook sales throughout all its platforms were $250 million in the fourth quarter and that it opened over 1 million Nook accounts in the period. For the full year, sales rose to $858.1 million from $572.8 million in fiscal 2010. In the retail stores, sales fell to $4.36 billion from $4.40 billion despite a 0.7% increase in comp store sales. B&N said the comp increase was led by digital sales which offset declines in trade book sales. In the fourth quarter, retail trade comps were off 2.9% due in part to liquidation sales at closing Borders stores. After the going out of business sales are completed, B&N is seeing incremental gains in those markets. Educational toys and games comp sales had a 59% comp increase in the fourth quarter and the company expects to expand that section leading up to the holiday season.
At the college stores, sales were $1.78 billion for the year, with comp sales down 0.8% for the year. Comparable store sales increased 2.8% for the fourth quarter.
Despite the big jump in sales at BN.com, the unit had negative EBITDA of $204.5 million in the year, up from $80.8 million in the prior year. Selling and administrative costs at BN.com rose from $151 million in fiscal 2010 to $280 million last year. CEO William Lynch said gross margins at BN.com improved once again in the fourth quarter and said he feels confident that BN.com is on track to become profitable. In a Amazon-type number, Lynch said BN.com sold three times as many digital products through BN.com as it did all print products. He estimated BN.com's e-book market share at 26-27%. Lynch said he doesn't see combination print and e-book becoming a major sales opportunity any time soon. PubIt, however, has grown faster than expected and now has over 100,000 titles. The number of apps is "comfortably" in the thousands and has been a winner, Lynch noted.