Like its main competitor Amazon.com—and unlike most bricks-and-mortar stores, including namesake Barnes & Noble—online book retailer Barnes&Noble.com had a strong holiday season. The results helped the company reduce its quarterly net loss by 88.2%, to $15 million. Total sales at B&N.com in the fourth quarter of 2002 rose 11.2%, to $127.9 million. For the full year, sales rose 4.5%, to $422.8 million, and its net loss was cut to $73.7 million from $244.4 million.
B&N.com CEO Marie Toulantis attributed the strong fourth quarter results to "our highly effective holiday merchandising and advertising programs, our targeted marketing strategy as well as a robust online holiday shopping season." Sales in the company's consumer division rose 15% in the fourth quarter, to $120.3 million, while sales in its corporate unit fell to $7.4 million from $10.2 million. For the year, consumer division sales increased 12.1%, to $390.8 million, while sales in the corporate side fell 43%, to $32.1 million.
B&N.com attributed the overall reduction in its operating losses to "efficiencies, greater productivity, cost control measures and the absence of impairment and special charges."
The company was somewhat cautious about 2003, predicting that sales in the first quarter will range between $105 million and $115 million, either level or up as much as 8% over 2002 first quarter sales of $106.5 million. For the full year, the company expects sales between $430 million and $470 million, up anywhere from 1.7% to 11.2%.
Chief financial officer Kevin Frain said the company was pleased with the progress it made in the year toward reaching profitability. He said the e-tailer expects to reach "slightly positive EBITDA" (earnings before interest, taxes, depreciation and amortization) in this year's fourth quarter. In the final period of 2002, B&N.com had an EBITDA loss of of $6.4 million.
To help it generate additional revenue, B&N.com has teamed up with the Sirsi Corp. to allow library patrons to buy books from the e-tailer while at a library. Purchases can be made from any library that has technology systems developed by Sirsi, and the library will receive a percentage of the total sale. All of B&N.com's regular terms, including discounts and free shipping for two or more items, will apply. Books will be shipped directly to customers' homes.
