Barnes & Noble
One daily meeting at InvestorPlace started with this question: “why would anyone want to own Barnes & Noble (BKS) for the next five years?”
Good question, since its unlikely they can last more than a single year the way its going…which is badly.
The struggling retailer is trying its best to stay relevant in the book selling space, but with its Nook product floundering, slashed prices on its Simple Touch e-readers, and no real tablet business, BKS has nowhere to turn.
With no dividend left for investors to hang their hat on for income, its latest quarterly earnings report can’t help matters. BKS reported a loss of $87 million ($1.56 per share) compared to $39.8 million (76 cents per share) for the comparable period, with revenues down 8.5% at $1.33 billion. Nook-based business (e-books and devices) slid 20%, and sales at stores open over 15 months fell over 9%.
Any good news? Yep: college bookstore sales improved by 2.4%, although comparable sales at colleges fell over 1%. As long as BKS can find new college outlets, this segment should improve.
But that’s it. BKS doesn’t forecast any particular breakout from the malaise, and indeed provides guidance indicating revenues will continue to fall. It’s hard to make a case for BKS staying the course without finding a buyer….and soon.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he does not hold a position in any of the aforementioned securities.