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BGP Announces Actual Quarterly and Full Year Sales and Refines EarningsGuidance for 1998 and 1999
ANN ARBOR, Mich., Jan. 27 /PRNewswire/ -- Borders Group, Inc. (NYSE: BGP) today announced unaudited sales results for its fiscal year ended January 24, 1999. Consolidated sales for the year were $2,595.0 million, an increase of 14.5% over the prior year's sales of $2,266.0 million. Store sales, including all international stores, rose to $2,590.5 million compared to $2,266.0 million last year, an increase of 14.3% over the prior year's sales. On a comparable store basis, Borders' stores increased 3.5% and Waldenbooks' stores decreased 1.0%. Borders.com generated sales of $4.6 million, with 57% of the volume generated in the fourth quarter. The current annualized run rate of the Borders.com is approximately $14 million.
For the fourth quarter, unaudited consolidated sales were $945.5 million, a 10.1% increase over the prior year sales of $858.8 million. Store sales, including international stores, rose to $942.9 million from $858.8 million, reflecting an increase of 9.8%. On a comparable store basis, Borders' stores increased 1.7% and Waldenbooks' stores were flat with last year. Borders.com generated sales of $2.6 million.
The January sales shortfall continued beyond expectations negatively impacting the most recent sales and earnings estimates. Management now expects fiscal 1998 earnings to be $1.11 to $1.13 per share. Earnings from stores, including all international stores, are expected to increase to $1.23 to $1.25 per share from $1.05 last year, an increase of 17% to 19%. Borders' on-line activity is projected to generate a loss for fiscal 1998 of $.12 to $.13 per share. Management is focused on correcting operational issues that adversely affected sales and earnings in 1998. Management will more aggressively market the Borders brand through a series of sales initiatives that have been or will be launched. Complete 1998 fiscal year results will be released on March 8th.
In commenting on the 1999 outlook, Chief Executive Officer, Phil Pfeffer said "Comparable sales levels achieved in 1998 are totally unacceptable and we will devote our efforts to correcting that situation, focusing on a variety of sales and marketing initiatives in order to achieve the growth rates necessary to drive shareholder value."
1999 Expectations
The Company expects earnings from stores, including international operations, to continue to grow in a range corresponding to 1998 growth in store earnings and has undertaken the following sales initiatives.
-- Management plans to continue to actively integrate web technologies
into our stores to offer customers an enhanced and unique shopping
experience.
-- Several sales initiatives are planned including a relationship
marketing program and increased extensive cross promotions between
stores and Borders.com.
-- Customer special order sales and fulfillment is a significant
opportunity for increased sales and enhanced customer service. The
special order sales program will be expanded at Borders and also
made available to customers at Waldenbooks. Using web based technology,
stores will be linked to the Borders Net Fulfillment Center to improve
service and speed of delivery to the customer.
-- The highly successful electronic gift certificate program initiated in
Borders in 1998 will be expanded to other seasonal events. The
electronic gift card is also planned to be rolled out to Waldenbooks
stores and internationally.
-- The Company plans to team with Paperchase Products Limited to introduce
a new product line of stationery and sidelines in several U.S. Borders
superstores in the spring. The Company plans to roll out this new
product line in the year 2000 assuming successful completion of the
pilot program. Borders recently acquired a 19.9% equity stake in this
UK based company.
-- Borders expects to open a record 50 to 55 stores, including five
international stores.
-- The international program includes opening four superstores in the
United Kingdom and one superstore in New Zealand. Furthering the
Company's international plan is the opening of three Books etc. stores
and approximately 30 international kiosks.
Borders.com's 1999 full year sales are expected to be approximately $25 million, generating a loss of approximately $.21 to $.24 per share.
Borders Group, Inc., is a leading global retailer of books, music, and other information and entertainment items with stores in the United States, United Kingdom, Singapore and Australia. Headquartered in Ann Arbor, Michigan, Borders Group, Inc., is the parent company of Borders, Inc., which operates 250 Borders superstores, offering what is regarded as the broadest selection of books and multi-media products in the industry. It is also parent of Borders.com, which offers over 10 million books, music and video items in stock and ready for immediate shipping from the company's state-of- the-art Borders Net Fulfillment Center. With cafe operations in nearly all of its stores, Borders, Inc., is also one of the nation's largest specialty coffee retailers. Through Borders (UK) Limited, Borders Group, Inc., also operates 26 Books etc. stores in the U.K. In addition, Borders Group, Inc., owns Walden Book Company, Inc., which has approximately 900 Waldenbooks and Brentanos stores in malls, shopping centers and airports across the country. Borders Group, Inc. trades on the New York Stock Exchange under the symbol "BGP".
To learn more about the Company, come see us at Bordersgroupinc.com. For information on Borders stores, visit Bordersstores.com. For the ultimate on- line book, music and video shopping experience, explore Borders.com.
Safe Harbor Statement
Certain of the statements set forth above are forward looking statements within the meaning of the Securities Exchange Act of 1934. The forward looking statements include sales and earnings and loss expectations, projections, estimates and guidance, whether relating to the Company as whole or particular businesses or segments, as well as statements relating to sales initiatives in 1999 and the impact of such initiatives. Such statements are based upon management's estimates, assumptions and projections and are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, consumer demand for the Company's products, which is believed to be related to a number of factors, including overall consumer spending patterns, weather conditions and with respect to the mall business, overall mall traffic; an unexpected increase in competition, including internet competition and competition resulting from electronic or other alternative methods of delivery of books, music, and other products to consumers, or unanticipated margin or other disadvantages relative to our competitors; higher than anticipated interest, occupancy, labor, distribution and inventory shrinkage costs; unanticipated adverse litigation expenses or results; unanticipated work stoppages; higher than anticipated costs associated with the closing of underperforming stores; unanticipated increases in the cost of the merchandise sold by the Company; the performance of the Company's new strategic initiatives, including the Internet and international expansion; the stability and capacity of the Company's information systems; unanticipated costs or problems relating to the Company's Year 2000 compliance; changes in foreign currency exchange rates; and the continued ability of the Company to locate and develop suitable sites for its superstore expansion program and kiosk programs. The Company does not undertake any obligation to update forward looking statements.
Information: For general information, including copies of this or other reports, please fax or mail your request to the attention of the Investor Relations Dept.; Fax 734-477-4538; 100 Phoenix Drive; Ann Arbor, MI 48108- 2202. Information can also be obtained via the internet by visiting the Borders web site at bordersgroupinc.com or via fax by calling Company News On-Call at 800-758-5804, ext. 106169. More information about Borders Book & Music stores, including store locations, directions, national and selected store specific events and job opportunities, may be found at bordersstores.com.
SOURCE Borders Group, Inc.
CO: Borders Group, Inc.
ST: Michigan
IN: REA
SU: SLS
01/27/99 06:00 EST prnewswire.com
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