With digital sales leading the way, Barnes & Noble CFO Joe Lombardi said that by fiscal 2014 total revenue at the company will hit $8.9 billion from the $5.8 billion achieved in the just concluded fiscal year and the $7.1 billion forecast for fiscal 2011. EBITDA will grow to over $500 million from $281 million in fiscal 2010. In fiscal 2014, retail stores, both trade and college, will contribute 69% of revenue compared to 90% of revenue in 2010. Lombardi’s remarks came at the conclusion of Tuesday morning’s investor conference.
Lombardi also provided more details on fiscal 2010 results and forecast for the current fiscal year. Sales at the trade bookstores were $4,402 million and will be between $4,340 million and $4,460 million. Gains will come in part from a full year of selling the Nook and accessories, Lombardi said, while sales of music continues to decline. The rollout of educational games and toy, and education departments to more stores will also boost gains, Lombardi said. Sales at B&N.com are projected to increase to $880 million from $572 million (in its earnings release, B&N said B&N.com sales would be about $1 billion. Explosive e-book sales as well as sales of the Nook will fuel the gains, Lombardi said. Comp store sales at B&N.com will rise 75%, explaining that B&N will use publisher’s retail price on agency model sales, not B&N’s commission, to compute same store sales of e-books. Revenue in the college stores will grow from $836 million to $1.83 billion in fiscal 2011. The increase will reflect in part a full year’s inclusion of the college stores which B&N bought late in calendar 2009 as well as a new rental book program that the company will introduce in 300 college bookstores this August.
Expanding its e-book business will not come cheap. The company will invest $140 million in digital ventures in fiscal 2011, an investment that will depress earnings in the year. With all digital costs placed in B&N.com the division will have negative EBITDA of $115 million this year compared to negative EBITDA of $81 million last year.
Other new initiatives that B&N sees adding to sales in the current fiscal year include adding peer-to-peer sales of used books through B&N.com and the launch of its self-publishing program, PubIt.