Barnes & Noble Posts Quarterly Loss Thanks to Nook, E-Books
February 28, 2013 8:50 PM
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Nook can't keep up with the competition
Barnes & Noble suffered a sizable loss in the third quarter due to a sales drop in its
Nook and e-books
Barnes & Noble reported a net loss of $6.1 million (18 cents per share) compared to its profit of $52 million (71 cents per share) in the year-ago quarter. Revenue was also down 10.3 percent to $2.23 billion, which was a shortfall from analyst expectations of $2.4 billion.
The book company also saw a 2.2 percent slip in sales at namesake book superstores and 5.2 percent sales decrease at college bookstores.
One of Barnes & Noble's biggest issues was Nook and its e-bookstore. Nook revenue, which includes devices and e-books, saw a 25.9 percent decrease to $316 million in Q3 2012. This is likely due to the fact that rivals like Amazon, Apple and Google are selling tablets with greater features for low prices. For instance, Google's Nexus 7 tablet is only $200 for greater specs and features than the Nook tablets, and tech giants like Apple have e-bookstores of their own along with the more popular iPad.
“In terms of the NOOK Media business, we’ve taken significant actions to begin to right size our cost structure in the NOOK segment, while also taking a large markdown on NOOK devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters,” said William Lynch, Chief Executive Officer of Barnes & Noble.
“NOOK Media has been financing itself since October of 2012 due to the strong investment partners we've been able to attract in Microsoft and Pearson. Coming off the holiday shortfall, we're in the process of making some adjustments to our strategy as we continue to pursue the exciting growth opportunities ahead for us in the consumer and digital education content markets. Without question, our bookstores have made a significant contribution to NOOK’s success over the past three years. And, in turn, our award-winning line of NOOK products have proven to be a strong driver of traffic to our stores.”
Analysts believe Barnes & Noble will have to divide the company at some point, considering chairman Leonard Riggio is looking to buy the bookstore sector (yet isn't interested in the Nook, e-books or college bookstore businesses).
Barnes & Noble
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3/1/2013 10:58:43 AM
It's no surprise to me that the Nook is losing to the competition. I've worked with a Nook HD+ and a Kindle Fire (2nd generation, NOT HD) and in many ways I think the Kindle is better. I'm not comparing them directly because one is a lower end 7" tablet and the other is a higher end 9" tablet.
Really the only things I like more about the Nook HD+ are the fantastic screen, the larger size, the lighter feel (relatively speaking), and the micro SD slot. The Kindle has a far more solid feel, a vastly superior native app store (though neither compare to Google Play), excellent Amazon integration, and a good default browser (I find Silk works better for me than most other Android web browsers including Dolphin, Opera, and Firefox).
I really hate that both devices try to lock you to their own app store. I wouldn't even bother with the Nook unless you plan to root/rom it. The Kindle at least has some decent offerings in their walled garden.
The last point I want to make is the Nook HD+ just feels flimsy. It feels like it's going to fall apart in my hands. I can't imagine it standing up to even mild abuse. The Kindle however feels solid.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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