Barnes & Noble's 2Q profits decline 15 percent

Thursday, August 21, 2008

By ANNE D'INNOCENZIO
NEW YORK (AP) -- Barnes & Noble Inc., the nation's largest bookseller, said Thursday that second-quarter profit fell 15 percent as it confronts sluggish consumer spending.

The New York-based company reiterated its earnings guidance for the year even as it projected that sales at established stores would be weaker than expected. The company said it is benefiting from tighter expense controls.

Shares of the company fell 95 cents, or 3.7 percent, to $24.79 in morning trading.

Barnes & Noble earned $15.41 million, or 27 cents per share, in the three-month period ended Aug. 2. That compares with $18.05 million, or 26 cents per share, in the year-ago period.

The 2008 quarterly earnings results included an after-tax benefit of 12 cents per share, resulting from a more favorable physical inventory shortage rate than previously estimated. Excluding this benefit, second-quarter earnings were 15 cents per share.

Sales slipped 1.6 percent to $1.22 billion, from $1.24 billion in the year-ago period. Same-store sales, or sales at stores opened at least a year, fell 4.7 percent in the period.

Analysts surveyed by Thomson Reuters expected a profit of 9 cents per share on revenue of $1.24 billion in the second quarter.

Barnes & Noble said it now expects same-store sales to decrease in the low single digits for the year. In May, the company had pared its sales forecast to be slightly negative, from slightly positive.

Still, the company reiterated its full-year earnings per share guidance, which calls for a range of $1.70 to $1.90 per share. Analysts surveyed by Thomson Reuters expect $1.74 per share for the year.