Barnes & Noble posted net income of $36.6 million in the fiscal year ended May 2, 2015, compared to a loss of $47.3 million in fiscal 2014. The profit improvement came despite a 4.9% decline in total revenue, to $6.07 billion; the decline was due in part to an extra week of sales in fiscal 2014.
As is typical in most B&N quarterly reports, the company had negative and positive news. Sales in fiscal 2015 fell 4.4% in its retail trade store segment, to $4.11 billion, and EBITDA dropped 8.9%, to $322.5 million. The extra week in fiscal 2014 contributed to some of the declines, though sales were also hurt by store closures and a 1.9% drop in comparable store sales for the full year. B&N closed 13 stores in the year, a lower number than in fiscal 2014. The company expects to close about 13 more stores in fiscal 2016.
However, “core” comp store sales, which exclude sales of Nook products, increased 0.5% for the full year (despite being off 0.5% for the fourth quarter). Sales for both the quarter and the year also fell at BN.com.
The improved bottom-line for the company was due to smaller losses in the Nook division, which has become a much smaller part of B&N as a whole. The EBITDA loss was cut to $86.3 million for the year, down from $217.6 million in fiscal 2014. Sales fell by almost half, down 47.8% to $263.8 million. Revenue fell in both Nook’s device and digital content businesses. Device sales dropped 66.7% in the year, to $86 million, while digital content sales dropped 27.8%, to $177 million. Digital content sales fell faster in the fourth quarter than they did for the full year, plummeting 36.5% in the period.
Sales in the college division rose 1.4%, to $1.77 billion, but EBITDA fell 20.5% to 91.1 million. Comp sales inched up 0.1% as higher general merchandise sales were offset by higher sales of lower priced textbook rentals. The drop in EBITDA was attributed mainly to continued investment in digital projects, including the Yuzu educational platform. B&N said it expects to spinoff the college division, known as Barns & Noble Education, at which point B&N CEO Mike Huseby will be named executive chairman of B&NE.
Looking at fiscal 2016, the company expects retail core comparable bookstore sales, which exclude sales of Nook products, to increase approximately 1%, while college comparable store sales are also expected to increase approximately 1%. The retailer also expects full fiscal year EBITDA losses in the Nook segment to decline versus the prior year.
BN.com to Launch Next Week
During the conference call on the year-end results, Huseby announced that the long-delayed launch of BN.com will take place next week. The new site is expected to drive higher sales and cut overall operating costs.