November 18, 1999
Barnes & Noble Comparable Store Sales Increase 5.9 Percent in Third Quarter
Barnes & Noble Reports Third-Quarter Profit of $0.05 Per Share Compared
with $0.07 Loss for Prior Year
Babbage's Etc. Third-Quarter Comparable Store Sales up 55 Percent Ac
New York, NY (November 18, 1999)-Barnes & Noble, Inc. (NYSE: BKS), the
nation's largest bookseller, today reported sales of $715.9 million for the
third quarter ended October 30, 1999, up 9.0 percent from $656.8 million
last year. Barnes & Noble "super" store sales were $622.3 million, up 12.3
percent from $554.0 million in the third quarter of 1998, and accounted for
86.9 percent of total sales compared with 84.3 percent for the same period
last year.
Barnes & Noble "super" store comparable sales increased 5.9 percent while
B. Dalton comparable store sales were down (0.8) percent. The sales for the
quarter do not include results from the Babbage's Etc. acquisition. Sales
were strong across all book categories, particularly children's books (the
three "Harry Potter" books, "Pokemon"), fiction (works by Tom Clancy, Tom
Wolfe, Nicholas Sparks, Stephen King, James Patterson, Maeve Binchy, among
others), non-fiction (Frank McCourt's 'Tis, Edmund Morris's Dutch, John
McCain's Faith of My Fathers) and educational books (teaching aids and
workbooks for the growing home school market), as well as music and cafes.
Comparable store sales also benefited from the roll-out of the BookMaster
system, which resulted in a significant increase in customer orders.
Consolidated net earnings for the quarter were $3.4 million, or $0.05 per
share (based on 71.5 million shares) as compared with a consolidated net
loss of ($4.6) million or ($0.07) per share (based on 68.6 million shares)
for the same period last year. Earnings from the company's retail business
increased 14.1 percent to $8.6 million or $0.12 per share (based on 71.5
million shares). Consolidated net earnings for the quarter consisted of net
earnings of $0.12 per share from the retail business and a non-cash loss of
$0.07 per share (based on 71.5 million shares) from the company's
investment in barnesandnoble.com. Since barnesandnoble.com has nearly $600
million in cash and does not have any debt, the losses of
barnesandnoble.com continue to represent a non-cash charge to Barnes &
Noble, Inc. earnings.
The company continues to generate strong cash flow from its retail
business. Over the past 12 months, EBITDA from the retail business was $294
million, resulting in free cash flow of $144 million.
how much free cash flow did Amazon.com have?
Barnes & Noble completed its acquisition of Babbage's Etc. on October 28,
1999. While results for the third quarter do not reflect the acquisition,
Babbage's Etc.'s third-quarter comparable store sales increased 55 percent.
As expected, sales growth was driven by new platform and title
introductions. Babbage's Etc. is one of the nation's largest operators of
video game and entertainment software stores, with 502 stores under the
Babbage's, Software Etc. and GameStop names, and a Web site, gamestop.com.
The acquisition is expected to be accretive to Barnes & Noble's earnings by
$0.10 per share for fourth quarter 1999.
"Barnes & Noble had a strong third quarter. Our store performance continues
to be excellent and, by meeting customer needs and providing an extensive
selection of books and related products, we are in position to have a
strong holiday season," said Leonard Riggio, chairman and chief executive
officer of Barnes & Noble, Inc. "Babbage's Etc. further extends our
selection of products into an exciting new area of tremendous growth, as
evidenced by their extraordinary comparable store sales."
Other Highlights
- On November 2, 1999, Barnes & Noble announced an investment in
iUniverse.com, the world's largest publishing portal. This investment opens
a new era of opportunity for the millions of talented new writers around
the world and the millions of books that are out of print.
- On October 28, 1999, barnesandnoble.com announced sales for the third
quarter ended September 30, 1999 of $49.1 million, an increase of 215
percent from $15.6 million for the third quarter of 1998.
I wonder what percent Amazon.com books increased in sales...
The number of
first-time customers was a record 581,000 during the third quarter,
bringing the cumulative customer account total to 2.9 million as of
September 30, 1999.
As of October 30, 1999, the company operated 528 Barnes & Noble stores and
444 B. Dalton stores. During the third quarter, 12 Barnes & Noble stores
were opened and five were closed. B. Dalton closed four stores in the third
quarter.
About Barnes & Noble, Inc.
Barnes & Noble stores stock an authoritative selection of book titles and
provide access to more than one million titles. They offer books from more
than 50,000 publisher imprints with an emphasis on small, independent
publishers and university presses. Barnes & Noble is one of the world's
largest booksellers on the World Wide Web (http://www.bn.com), and the
exclusive bookseller on America Online (Keyword: bn). The company also
publishes books under its own imprint for exclusive sale through its retail
stores, mail-order catalogs, and Web site. Barnes & Noble recently acquired
Babbage's Etc., one of nation's largest operators of video game and
entertainment software stores.
SAFE HARBOR
This release may contain forward-looking statements regarding expectations
of the company. These statements are based on currently available
information and represent the beliefs of the management of the company. The
future events which are the subject of such statements are subject to
certain risks, including those set forth in the company's annual, quarterly
and periodic reports on file with the Securities and Exchange Commission.
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(SEE ATTACHED TABLES)
General financial information on Barnes & Noble, Inc. can be obtained via
the Internet by visiting the company's investor relations Web site:
http//www.shareholder.com/bks/.
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