B&N Holiday Sales: Nook Plummets, Stores Stabilize
Barnes & Noble sales during the holiday period--the nine weeks ended December 28--were decidedly mixed, as Nook division revenues continued to fall substantially, dropping 60.5%, to $125 million, while bricks-and-mortar stores appeared to stem their sales declines of the past few years, with sales down 6.6%, to $1.1 billion, and down just 0.2% when Nook products are excluded.
Wall Street seemed to like the news: yesterday B&N shares rose 7.1%, to $15.67.
The company noted that store sales fell in part because of store closings as well as a drop in sales at stores open at least a year of 5.5%.
Nook device and accessories sales fell 66.7%, to $88.7 million, because of "lower unit selling volume and lower average selling prices." Digital content sales were down 27.3%, to $36.5 million, because of "lower device unit sales and lower average selling prices."
The Nook has been hit by several difficult trends: lower e-book prices, in part because of the Justice Department suit; the dominance of tablets over dedicated e-reading devices, where B&N can barely compete; and a slowdown in the growth in popularity of e-books. B&N said that its share of the e-book market is about 20%, down from previous years' estimates of about 25%.
Michael P. Huseby, B&N's newly appointed CEO, said that the company was "pleased with our holiday sales results, especially our core comparable bookstore sales, which were essentially flat and an improvement as compared to the first half of the year. During the holiday period we benefited from a strong line-up of bestselling titles, great execution by our booksellers and merchants, an effective advertising campaign and strong increases in our Juvenile, Gift and Toys & Games categories."
He added that Nook sales declined largely because the company had not introduced new tablets this season and "instead we executed our plan to sell through our existing high-quality devices."
Huseby told the Wall Street Journal that reversing the decline in digital sales is "a big challenge" and that B&N is talking with other tablet makers about giving the Nook store more prominence on their devices. Also B&N will encourage Nook owners to use their devices, he said, adding, "We have a lot of customers who have bought devices but aren't buying as much content as we'd like."