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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I'd be buying Nook books, except...
3/1/2013 9:06:33 PM
I prefer Barnes & Noble's DRM to Amazon's...Amazon is activation only. B&N's can actually be used in any program that support that encryption, with no activation (I've tried, it works, just a username and password).
BUT...the Nook hardware is horrible. I want hardware buttons, and while technically the Nook 2/touch/whatever has them, they're so awful as to be basically worthless. It also doesn't (and can't be set) to 'flash' on page turns...it's annoying not having visual feedback like that.
There's also no 9.7" version, just 6.
"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg
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