Media Contact: Investor Contact:
Mary Ellen Keating Maureen O'Connell
Senior Vice President Chief Financial Officer
Corporate Communications Barnes & Noble, Inc.
Barnes & Noble, Inc. (212) 633-3338
(212) 633-3323
Barnes & Noble Comparable "Super" Store Sales Increased 2.3 Percent
Babbage's Comparable Store Sales Up 13.2 Percent
Consolidated EPS for the First Quarter Exceeds Consensus Estimates
New York, NY (May 24, 2001)--Barnes & Noble, Inc. (NYSE:BKS), the nation's largest bookseller, today reported total retail bookstore sales of $807.9 million for the first quarter ended May 5, 2001, up 4.3 percent from $774.3 million last year. Barnes & Noble "super" store sales were $738.6 million, up 6.7 percent from $692.5 million in the first quarter 2000. Babbage's reported sales of $201.4 million for the first quarter, up 67.8 percent.
Barnes & Noble comparable "super" store sales increased 2.3 percent for the first quarter, slightly below estimates, while Babbage's comparable store sales increased 13.2 percent, significantly above estimates. B. Dalton comparable store sales were down (1.8) percent.
Barnes & Noble reported a consolidated pro-forma loss per share of $0.12, prior to an extraordinary item, for the first quarter, exceeding consensus estimates.
Although the variance in sales for Barnes & Noble Booksellers resulted in lower operating earnings for the first quarter, a comprehensive program to reduce expenses will begin to take effect in the second quarter and continue throughout the year. Even at a reduced guidance of 2.5 to 3.5 percent for comparable "super" store sales for the balance of the year, this segment is projected to meet previously announced earnings targets.
Babbage's better than forecasted comparable sales resulted from the momentum which is building in the video-game industry. Previously announced launches of major new platforms by Nintendo and Microsoft are expected to accelerate sales further in the second half of the year. While the leading edge of video-game sales is hardware, where lower margins are achieved, the trailing and more profitable edge is software, which has higher margins. The company expects significant increases in operating margins beginning in the fourth quarter and continuing into next year.
As previously announced in April 2001, the company successfully settled a lawsuit brought by the American Booksellers Association and agreed to pay $2.4 million, a small portion of the plaintiff's legal fees. The settlement and the cost of litigation resulted in an extraordinary charge of $0.04 per share during the first quarter. Lower legal fees in subsequent quarters will offset the first-quarter charge.
A conference call with Barnes & Noble, Inc.'s management will be simulcast on the Web at (www.streetfusion.com) beginning at 11 A.M. ET on Thursday, May 24, 2001, and is accessible at (http://www.barnesandnobleinc.com/financials), where it will be archived until June 24, 2001.
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) operates 568 Barnes & Noble and 335 B. Dalton bookstores, and, with its acquisition of Babbage's Etc. and Funco, Inc., is the nation's largest operator of video game and entertainment software stores. 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 premiere bookseller on America Online's (Keyword: bn) proprietary network. Barnes & Noble.com has the largest standing inventory of any online bookseller. Barnes & Noble also publishes books under its own imprint for exclusive sale through its retail stores and Web site.
General financial information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: barnesandnobleinc.com.
SAFE HARBOR
This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.
Please see attached financials.
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