Barnes & Noble Increases Sales but Misses Revenue Estimate

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Barnes & Noble (NYS: BKS) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 28 (Q3), Barnes & Noble missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.

Gross margins improved, operating margins contracted, net margins dropped.

Revenue details
Barnes & Noble reported revenue of $1.89 billion. The four analysts polled by S&P Capital IQ expected net sales of $1.98 billion on the same basis. GAAP reported sales were 4.9% higher than the prior-year quarter's $2.33 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at -$0.17. The one earnings estimate compiled by S&P Capital IQ anticipated $0.15 per share on the same basis. GAAP EPS of $0.71 for Q2 were 29% lower than the prior-year quarter's $1.00 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.8%, 40 basis points better than the prior-year quarter. Operating margin was 3.7%, 120 basis points worse than the prior-year quarter. Net margin was 2.1%, 50 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.53 billion. On the bottom line, the average EPS estimate is $0.96.

Next year's average estimate for revenue is $7.25 billion. The average EPS estimate is -$1.10.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 302 members out of 614 rating the stock outperform, and 312 members rating it underperform. Among 160 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 66 give Barnes & Noble a green thumbs-up, and 94 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Barnes & Noble is hold, with an average price target of $15.63.

If you're invested in retailers like Barnes & Noble, you should check out the concept that is The Motley Fool's top stock for 2012. Its founder wrote the book on big-box retailing, and it's growing in increasingly important international markets. Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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