arnes & Noble misses by $0.17, reports revs in-line; lowers FY17 guidance (9.90)
- Reports Q3 (Jan) earnings of $0.96 per share, $0.17 worse than the Capital IQ Consensus of $1.13; revenues fell 8.1% year/year to $1.3 bln vs the $1.29 bln Capital IQ Consensus. Retail sales, which include Barnes & Noble stores and BN.com, declined 7.5% to $1.3 bln for the quarter. Comparable store sales declined 8.3% for the quarter largely due to lower traffic, as well as the decline in coloring books, artist supplies and last year's best-selling album by Adele, which collectively accounted for nearly one third of the sales decline.
- Online sales increased 2.2% for the period. NOOK sales, which include digital content, devices and accessories, declined 25.7% to $38.4 mln for the quarter.
- For the quarter, Retail generated operating income of $135.0 mln, while NOOK incurred an operating loss of $6.2 mln, for a total operating income of $128.8 mln.
- Consolidated third quarter EBITDA was $157.8 mln, as compared to $169.0 mln a year ago. NOOK EBITDA losses of $2.4 mln improved $8.8 mln over the prior year, as the Company continues to reduce NOOK expenses. Retail EBITDA of $160.2 mln declined $19.9 mln on the sales decline.
- Co lowered FY17 guidance on January 5.
- Despite sales improvements post-holiday, trends softened in late January and into the fourth quarter.
- As a result, the Company now expects full year fiscal 2017 comparable store sales to decline ~7% (down from ~6%), and consolidated EBITDA to be in a range of $180 mln to $190 mln (down from $200 mln), excluding the impact of any charges related to its cost reduction initiatives and costs associated with the CEO departure. Fiscal 2017 Retail EBITDA is now expected to be in a range of $200 mln to $210 mln, while NOOK's EBITDA loss has improved and is now expected to be ~$20 mln, which includes previously announced transitional costs.