Barnes & Noble Keeps Moving Forward

By Steve

Image source: Barnes & Noble.

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Barnes & Noblereleased fiscal third-quarter 2016 results Thursday, and investors are rightly pleased with its ongoing turnaround. Let's take a look at what the bookseller accomplished in its latest quarter.

Barnes & Noble results: The raw numbers


Fiscal Q3 2016 Actuals

Fiscal Q3 2015 Actuals

Growth (YOY)


$1.41 billion

$1.44 billion


Net Income (from continuing operations)

$80.3 million

$39.0 million


EPS (from continuing operations)




Data Source: Barnes & Noble.

What happened with Barnes & Noble this quarter?

  • Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 1.6% year over year, to $169 million.
  • Retail sales fell 1.2% year over year, to $1.38 billion, primarily due to lower online sales and store closures.
  • Comparable-store sales rose 0.2%, while Retail Core comparable-store sales -- which excludes NOOK products -- rose 1.3% year over year. That's on top of a 1.7% increase in the same year-ago period, and continues last quarter's momentum, when the metric rose 1.6% year over year
  • Driven by strength in adult coloring books, and the toys and games, music, and gift businesses.
  • Retail EBITDA fell 7.8% year over year, to $180.2 million, due to a combination of top-line declines, increased advertising, and a $4 million non-cash publishing contract impairment charge.
  • NOOK sales fell 33.3%, to $51.7 million, due to lower device and content sales.
  • NOOK EBITDA losses decreased 61.5%, to $11.2 million, thanks to Barnes & Noble's continued focus on "cost rationalization efforts."
  • Paid $11.5 million in dividends, and repurchased 1.8 million shares for $16.5 million (average price of $9.17 per share).

What management had to sayBarnes & Noble CEO Ron Boire stated,

Looking forwardFor the full fiscal year 2016, Barnes & Noble reiterated its guidance for comparable-store sales to be roughly flat with 2015, and for core comparable-store sales, excluding NOOK products, to rise around 1% for the year. Barnes & Noble also continues to expect to further narrow full fiscal-year EBITDA losses from the NOOK segment.

In the end, Barnes & Noble's latest quarter didn't offer any big surprises. But that's arguably just what investors had wanted to hear as it inches back toward sustained top- and bottom-line growth. As long as Barnes & Noble's core retail business continues to improve as losses from its NOOK segment narrow, the company should continue to prove ever-more capable of efficiently creating shareholder value.

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Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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