Stock Market Watch

Barnes & Noble Lowers Nook Sales Forecast; May Spin Off Nook (BKS)

by ·


Barnes & Noble IncShares of Barnes & Noble Inc. (NYSE: BKS), a content, commerce and technology company, are rebounding in trading today after falling more than 17% on Thursday. At last check, Barnes & Noble shares were trading 5.96% higher at $11.91 on volume of 237,077.

Barnes & Noble shares tumbled on Thursday after the New York City-based company lowered its sales forecast. The company also shocked investors by saying that it may spin off Nook.


Barnes & Noble, which is the No. 1 bookstore chain in the U.S., has relied on e-readers, tablets and electronic books to offset weak sales at its brick-and-mortar stores. The weaker than expected Nook sales therefore came as a surprise and indicate that the company is struggling to keep pace with Amazon.com Inc.’s (NASDAQ: AMZN) Kindle device.

Barnes & Noble also said that it expects a steeper net loss for fiscal year than Street estimates. The company said in a statement it wanted to unlock the value of the Nook business and bring it to foreign markets and has opened discussions with potential partners such as publishers, retailers and technology companies outside the U.S.

During the holiday season, Barnes & Noble sold 70% more Nook devices. The company’s e-book sales also doubled in the holiday season. William Lynch, CEO of Barnes & Noble, told Reuters that investors have not given the company enough credit for that growth. Lynch said that the company’s market share remains very strong and it certainly thinks this is not being properly valued.

For the fiscal year ending in July 2012, Barnes & Noble lowered sales forecast for the Nook business from $1.8 billion to $1.5 billion. The downward revision has been done mainly dye to disappointing sales of its $99 Nook Simple Touch e-reader.

The company expects EBITDA for fiscal year ending July 2012 to come in between $150 million and $180 million, compared with previous forecast of $210-$250 million.

More Posts by this author

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


Tags:

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

You may also like...