Barnes & Noble Education Profit Falls 9.6%
09 December 2015 - 2:30AM
Dow Jones News
Barnes & Noble Education Inc. said its earnings fell 9.6%
since bookseller Barnes & Noble Inc. spun off the college
business in August.
Shares fell 15% to $10.87 in early trading as the company cut
its sales and capital-spending guidance for the current fiscal year
that ends in April.
Barnes & Noble Education reported that its comparable sales
declined 3% in the three-month period ended Oct. 31, citing
negative impacts from student-enrollment trends, especially at
two-year community colleges.
Chief Executive Max Roberts said in a news release Tuesday that
enrollments in two-year community colleges are down mid-single
digits year over year, which resulted in comparable sales in those
schools falling by about 7%.
Excluding two-year community colleges, comparable sales fell
1.3%, he added. Such colleges represent 24% of the company's
revenue, with the rest coming from state schools, private schools
and collegiate superstores.
For the year, the company lowered its comparable sales guidance
to between flat and a decline of 2%, from its previous estimate for
growth of about 1%. Barnes & Noble Education also cuts its
capital spending outlook by $5 million and now projects roughly $50
million.
Overall, Barnes & Noble Education reported a profit of $33.4
million, or 69 cents a share, down from $37 million, or 95 cents a
share, a year earlier. Revenue edged up 0.6% to $755.9 million.
Gross margin rose to 23.2% from 23.1%.
Barnes & Noble in February announced plans to separate its
college stores, as the bookseller battled steep losses at its Nook
digital unit, declining overall revenue amid store closings and
ramped up competition from Amazon.com Inc. and other online
retailers. After the split, Barnes & Noble kept the consumer
stores, online business and Nook unit.
Last week, Barnes & Noble Inc. reported that it swung to a
loss and reported a decline in sales in the first full quarter
since the split.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
December 08, 2015 10:15 ET (15:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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