Barnes & Noble (BKS) Stock Recovers Premarket Losses after Earnings Release

Shares of Barnes & Noble Inc. were trading down -7.33 or -27.84 percent to $19.00 per share in Thursday's premarket ahead of announcing its fiscal year 2015 fourth quarter earnings. After announcing earnings, the stock recovered to $27.00 per share, up +0.67 or +2.54 percent, Barnes & Noble stock closed at $26.33 per share, down -0.43 or -1.61 percent in Wednesday's regular trading session.

Founded in 1886 as a bookstore named Arthur Hinds & Company, New York City based Barnes & Noble is the largest book retailer in the United States and a major seller of digital media and educational tools.
As of November of 2014, the company operates 658 retail bookstores in all 50 of the United States, as well as 714 college bookstores which supply materials to 5 million students and 250,000 faculty members nationwide. In addition, Barnes & Noble sells its products online through its website, Barnes & Noble bookstores are the last remaining large bookstores in the country and generally have a Starbucks coffee shop in their outlets. In addition to books, the company sells DVDs, magazines, newspapers, games, gifts and the company's proprietary Nook-e book readers and tablets.

For the company's 2015 fourth quarter ended on May 2nd, Barnes & Noble reported a consolidated net loss of -$19.4 million, or -$0.37 per share. This compares to a loss of -$36.7 million or -$0.72 per share for the same period one year ago.

Consolidated revenues for the quarter came to $1.2 billion, a decrease of -10.4 percent over the fourth quarter in 2014. Analysts expected the company to report a quarterly loss of -$0.39 per share on revenue of $1.18 billion.

Chief Executive Officer of Barnes & Noble Michael P. Huseby said in the company's press release that, "The Company is successfully implementing strategic and operating initiatives resulting in the improved performance of each of our business units as evidenced by our 30% year-over-year consolidated EBITDA increase. He continued, "By acquiring the external partnership interests in NOOK Media, we gained the operational and structural flexibility we now have. We expect to separate the Barnes & Noble, Inc. and Barnes & Noble Education businesses by the end of August, allowing each business to independently focus on their growth initiatives.

The company's retail segment, including Barnes and Noble Bookstores and the company's website, reported revenues of $869 million for the quarter and $4.1 billion for the entire year, showing a decrease of -9.0 percent and -4.4 percent respectively. Comparable store sales were -1.3 percent lower during the quarter and -1.9 percent lower for the entire year, while "core comparable sales - excluding sales of NOOK products - dropped -0.5 percent for the quarter while increasing +0.5 percent for the full year.

The company's NOOK segment reported revenues of $52 million for the quarter and $264 million for the entire year, a decrease of -39.8 percent for the quarter and -47.8 percent for the full year. On an EBITDA adjusted basis, the NOOK segment lost $15 million for the quarter and $86 million for the entire year. The lower loss was attributed to prior year impairment charges, improved device margins and cost rationalization efforts.

In addition to the earnings announcement, the company also said that it plans to name Michael Huseby, the current CEO as Executive Chairman of Barnes & Noble Education when the spin off becomes effective later this year.

Barnes & Noble stock made a dramatic recovery in this morning's premarket, having been down almost 28 percent before announcing earnings. The loss reported was $0.02 less than the analyst consensus, which brought the stock back from trading at the $19.00 per share level this morning. A conference call is scheduled for 10 AM EST.

Other News About BKS

Barnes & Noble Announces a Month-Long Celebration of Pop Culture at Stores Nationwide in July

Company's second annual Get Pop Cultured with Barnes & Noble will present 20 events during the month of July.

Barnes & Noble Names Two New Board Directors

Ann-Marie Campbell and Paul B. Guenther will be added to the company's board.

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Published on Jun 25, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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