With sales of its Nook digital devices falling short of expectations for the holiday season, Barnes & Noble reported that sales for the nine week period ended December 29 fell at both its retail stores and in its Nook segment.
In the retail trade segment sales declined 10.9 percent, to $1.2 billion, which the company attributed to an 8.2 percent decline in comparable store sales, store closures and lower online sales. In the Nook segment, sales fell 12.6 percent to $311 million as a 13.1 percent increase in sales of digital content was offset by weaker than expected sales of Nook devices.
The poor showing of the digital devices even impacted the stores with B&N reporting that excluding Nook results comp store sales were down 3.1 percent due to lower customer store traffic. Lower Nook unit sales and lower average selling prices were cited as the reasons for the drop in Nook segment revenue. Sales of core products in the stores (which includes books) were better than expected and the company said it still expects comps at the stores to fall by low to mid single digits for the fiscal year.
B&N CEO William Lynch said the company will look at the "root causes" of the weak December Nook sales and adjust the company's strategy going forward. For the full fiscal year ending in April the company now expects Nook Media--which includes college stores plus digital device and content sales--to be $3 billion with EBITDA losses equal to fiscal 2012; B&N had hoped to cut EBITDA losses in the current year.
SOURCE: Publisher's Weekly