’Fifty Shades’ Helps Barnes & Noble in 1Q
NEW YORK (AP) - Barnes & Noble’s fiscal first quarter was a tale of modern and traditional. Tech-savvy consumers snapped up its e-books and other digital content during the period, while traditionalists headed to its bookstores for the popular "Fifty Shades of Grey" series.
The double dose of good news, coupled with cost-control efforts and lower expenses, helped the New York company’s loss narrow while its revenue rose.
Barnes & Noble Inc., the largest traditional U.S. book retailer, faces tough competition from online retailers like Amazon.com and discount stores as consumers increasingly move away from traditional books in favor of reading on devices such as e-readers and tablets. These factors have pushed the chain to invest heavily in its Nook e-reader and e-books, with digital content playing a key role in its success during the current quarter.
Barnes & Noble also had the added bonus of riding the buzz of "Fifty Shades of Grey" by E.L. James, the publishing phenomenon that has drawn legions of readers into bookstores. The erotic novels occupy the top three spots on The New York Times’ list of best-selling print and e-book fiction.
For the period ended July 28, Barnes & Noble lost $41 million, or 78 cents per share. That was less than the $56.6 million, or 99 cents per share, that it lost a year earlier.
The chain reduced its selling and administrative expenses in the quarter as well as its interest expense.
Revenue climbed 2 percent to $1.45 billion from $1.42 billion.
Revenue for the retail division - which includes bookstores and its website businesses - rose 2 percent. Revenue from bookstores open at least a year, a key gauge of the chain’s health, increased 4.6 percent. This performance was buoyed by the "Fifty Shades" sales as well as the liquidation of Borders’ bookstores.
Removing the sale of Nook products, revenue at bookstores open at least a year increased 7.6 percent.
Revenue for its college bookstores open at least a year fell 2 percent, as the May through July period is when most students have off from classes and does not include the important back-to-school buying period.
The Nook unit - which includes e-readers, digital content and accessories - reported basically flat revenue at $192 million. Sales of digital content surged 46 percent. This content includes digital books, digital newsstand and the apps business.
Sales of devices dropped because of lower selling prices and difficulty getting enough of its e-readers with the Glowlight feature to market to meet demand. The Glowlight emits low-level light to help with bedtime reading.
Earlier this month Barnes & Noble announced that it was cutting the price for its less-expensive model Nook tablet computer by $20, undercutting Amazon’s Kindle Fire. The New York company said it was lowering the price for the 8-gigabyte model Nook tablet to $179 from the current $199. The Kindle Fire, with 6 gigabytes of memory, sells for $199. Barnes & Noble also announced a $50 reduction, to $199 from $249, for its 16-gigabyte Nook tablet.
Shares of Barnes & Noble, which has 689 bookstores in 50 states, fell 5 cents to $12.31 in morning trading.