I wasn't impressed with Barnes & Noble's (NYS: BKS) first-quarter results, and investors clearly aren't too pleased with today's second-quarter earnings release either, since shares lost as much as 24% today before closing off more than 16%.
Total revenue for the quarter came in at $1.89 billion, which is a slight decline from a year ago. What's weighing on shareholders today is that the company cranked out a net loss of $0.17 per share, an ominous shade of red compared with the $0.03 profit that the market was expecting. Sales also fell short of the $2 billion that analysts were modeling for.
B&N's retail-store sales fell by 1%, and comparable sales dropped 0.6%. BN.com continued to show the most top-line growth, coming in at 17%, with corresponding comps jumping 38%. The increase was attributed to strength in digital-content sales and Nook device sales. Last month, the bookseller launched a new Nook tablet to directly battle Amazon.com's (NAS: AMZN) Kindle Fire and in hopes of indirectly stealing some sales from Apple's (NAS: AAPL) iPad.
The company said the Nook Tablet is now the fastest-selling Nook product. The consolidated Nook business across all segments soared 85% to $220 million, which includes content sales, hardware, and accessories. The three-day holiday weekend saw comps rising by 10.9%, giving hope for a healthy holiday shopping season.
The fiscal quarter ended in October, so the impact of the Nook Tablet launch and the holiday weekend won't show up until the next release. I found myself inside a B&N store over the Thanksgiving weekend playing with the Nook Tablet on display, which coincidentally was set up to mimic Apple's retail displays. I was thoroughly unimpressed by the device and found its overall interface relatively unresponsive compared with an iPad.
In fairness, I'm somewhat biased as an Amazon.com and Apple shareholder, but I imagine the responsiveness to be equally lacking on the Kindle Fire, based on some early reviews, although I haven't gotten my hands on one yet.
Going forward, B&N expects full-year EBITDA on the low end of its previously guided range of $210 million to $250 million.
The bookseller continues to desperately reinvent itself as a digital powerhouse, undoubtedly heeding some advice from distribution specialist and investorLiberty Media (NAS: LMCA) . The BN.com division continues to burn cash -- losing $58.9 million in EBITDA this quarter -- despite revenue growth as Barnes & Noble is investing and hoping its big bet on digital will pay off. Sorry, B&N, but I think you're too late to the digital party.
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At the time thisarticle was published Fool contributorEvan Niuowns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.