- Joined
- May 4, 2006
- Messages
- 641
- Reaction score
- 109
- Location
- in clover
- Website
- www.tapestryofbronze.com
Below are some excerpts from an article in The Motley Fool (by Alyce Lomax) about Barnes & Noble, which lost money in the 3rd Q. Booksellers - the chains as well as the independents - are having a very tough time.
Victoria Grossack
www.tapestryofbronze.com
If you consult our Fool by Numbers for the quarter, you'll see Barnes & Noble reported a loss of $2.8 million, or $0.04 per share, including $0.03 per share in stock option expense. Sales increased 3% to $1.11 billion. Same-store sales rose 2%, with B. Dalton being a trouble spot due to store closures.
The major theme in Barnes & Noble's conference call was its decision to further lower prices on adult hardcover books in its membership program. "We believe that giving ... some of the margin gains that we have realized back to our customers is a good long-term strategy," CEO Steve Riggio said.
Indeed. It's not lost on anyone that this is a hyper-competitive business these days. There's Borders (NYSE: BGP - News), as well as discount book chain Books-A-Million (Nasdaq: BAMM - News). And of course there's another giant in books and music -- Amazon.com (Nasdaq: AMZN - News), with its discounted prices and wide selection. Personally, I buy most of my books and music through Amazon or Apple's (Nasdaq: AAPL - News) iTunes, and I'm betting lots of people do the same -- these days, the ease with which people can obtain media online shouldn't be underestimated. And speaking of margins, Amazon's made a major bid for repeat patronage with its Amazon Prime program, a considerable act of aggression in the industry that helps persuade its customers to frequent its online store with its cut-rate shipping.
However, Barnes & Noble's new emphasis on price-busting bears watching as it tries to drive higher growth in such a competitive space -- investors are going to want to see how well it does achieving higher sales volume and how that impacts profitability. It seems to me this is a good time to grab a book and wait awhile for Barnes & Noble.
Victoria Grossack
www.tapestryofbronze.com
If you consult our Fool by Numbers for the quarter, you'll see Barnes & Noble reported a loss of $2.8 million, or $0.04 per share, including $0.03 per share in stock option expense. Sales increased 3% to $1.11 billion. Same-store sales rose 2%, with B. Dalton being a trouble spot due to store closures.
The major theme in Barnes & Noble's conference call was its decision to further lower prices on adult hardcover books in its membership program. "We believe that giving ... some of the margin gains that we have realized back to our customers is a good long-term strategy," CEO Steve Riggio said.
Indeed. It's not lost on anyone that this is a hyper-competitive business these days. There's Borders (NYSE: BGP - News), as well as discount book chain Books-A-Million (Nasdaq: BAMM - News). And of course there's another giant in books and music -- Amazon.com (Nasdaq: AMZN - News), with its discounted prices and wide selection. Personally, I buy most of my books and music through Amazon or Apple's (Nasdaq: AAPL - News) iTunes, and I'm betting lots of people do the same -- these days, the ease with which people can obtain media online shouldn't be underestimated. And speaking of margins, Amazon's made a major bid for repeat patronage with its Amazon Prime program, a considerable act of aggression in the industry that helps persuade its customers to frequent its online store with its cut-rate shipping.
However, Barnes & Noble's new emphasis on price-busting bears watching as it tries to drive higher growth in such a competitive space -- investors are going to want to see how well it does achieving higher sales volume and how that impacts profitability. It seems to me this is a good time to grab a book and wait awhile for Barnes & Noble.