Borders Group 4th-Qtr Earnings Increase 9.9% on Stronger Sales
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Bloomberg News
March 8, 1999, 8:33 p.m. PT
Borders Group 4th-Qtr Earnings Increase 9.9% on Stronger Sales
Ann Arbor, Michigan, March 8 (Bloomberg) -- Borders Group
Inc., the nation's No. 2 bookseller, said fiscal fourth-quarter
net income rose 9.9 percent on strong sales at its superstores.
The operator of about 1,200 Borders, Waldenbooks and
Brentanos stores said net income rose to $86.7 million, or $1.06
a share, from $78.9 million, or 96 cents, a year earlier. The
company was expected to earn $1.05 a share, the average estimate
of analysts surveyed by First Call Corp.
Much of the earnings increase came from superstore sales,
which rose 19.9 percent to $539.6 million for the quarter. The
company opened 47 new stores during the year and expects to open
another 50 in 1999, including five overseas. Revenue rose 10.1
percent to $945.5 million, from $858.8 million.
''Borders is the fastest-growing retail book and music
superstore chain and provides its shareholders an industry-
leading 14 percent return on average equity,'' company Chief
Executive Phil Pfeffer said in a statement. He added that the
company expects results to improve this year as it opens more
stores, restructures marketing activities and improves its
Internet operations.
In January, Ann Arbor, Michigan-based Borders twice warned
that fiscal 1999 earnings would miss forecasts because of slow
sales. The company urged analysts to lower their expectations
from $1.22 a share to $1.11 to $1.13 a share.
Net income for fiscal year 1998 rose 14.8 percent to $92.1
million, or $1.12 a share, from $80.2 million, or 98 cents. The
company was expected to earn $1.11, according to First Call. For
the year, sales increased 14.5 percent to $2.595 billion, from
$2.266 billion in 1997.
Borders.com, the company's Internet retailer, had a loss for
the quarter of $3.6 million, or 4 cents a share, on sales of $2.6
million. It had a loss of $10.5 million, or 13 cents, for the
year, on sales of $4.6 million.
The revenue figures lag those of leading Internet
booksellers Amazon.com and Barnes & Noble Inc., which had sales
of $610 million and $70.2 million, respectively, for the year.
Borders introduced its Web site later than Amazon.com and Barnes
& Noble, and hasn't devoted as much money to it, analysts have
said.
Borders' shares rose 3/16 to 13 3/4 today. Earnings were
announced after the close of U.S. markets.
--Courtney Schlisserman in the New York newsroom (212) 318-2300,
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