After reporting its best holiday sales period in a number of years in January, Barnes & Noble reported that sales were flat for the third quarter ended January 26, 2019, compared to the same period a year ago. Total revenue was $1.23 billion in the third quarter of fiscal 2019, with sales in its retail stores up 0.3% over the comparable quarter in fiscal 2018, hitting just over $1.21 billion. Sales in the Nook division fell 21%, to $24.4 million.
The gain in the retail segment was due to a 1.1% increase in comparable store sales. Non-book sales rose by 4.9% in the quarter, but book sales fell 1.1% due in part to lower than expected sales of trade paperbacks and children's books, CFO Alan Lindstrom said. Chief marketing officer Tim Mantel said the company had good success with a "mini remodel" of 91 stores to put more emphasis on toys and games while reducing space for the struggling music and movie products.
B&N was focused on growing its top line in the most recent quarter and devoted more resources to marketing and promotions, including a new ad campaign. Those efforts added some extra costs in the holiday quarter and, as a result, third quarter adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $133.0 million, down from $139.5 million last year.
Operating profit in the quarter was $79.2 million, compared to an operating loss of $34.9 million last year. Both quarters included one-time charges: third quarter results include asset impairment charges of $22.1 million and non-recurring professional fees of $5.1 million, while the prior year quarter included asset impairment charges of $135.4 million and severance charges of $10.7 million.
With one quarter left in the fiscal year, B&N said it expects fiscal 2019 EBITDA to be in a range of $140 million to $155 million, excluding unusual or non-recurring items. The forecast includes the impact of incremental investments B&N is making in its business, as well as lower than expected post-holiday sales, which company executives attributed partly to weather. Since mid-January, sales are down in the low single digits, Lindstrom said.
The company opened four new stores in the year, and the "early reading is good," Mantel said. B&N will open two more outlets in the fiscal year fourth quarter, which ends at the end of April.
This story has been updated with further information from B&N's conference call with analysts.