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What happened
Bookseller's actions Barnes & Noble (NYSE: BKS) down 8.1% Thursday after falling 10.1% earlier in the day.
Barnes & Noble, one of the last US bookstore chains, recorded a stronger-than-expected decline in quarterly sales of $ 795 million for the quarter. It recorded a significant quarterly loss of $ 0.23 per share, compared to an expected loss of $ 0.09 for Wall Street.
Barnes & Noble has a lot of books, few customers. Source of the image: Getty Images.
So what
Sales for the first quarter of fiscal 2019 decreased 7% year-on-year and comparable store sales declined 6%. Barnes & Noble's loss per share was about 50% higher than the $ 0.15 loss a year ago.
Now what
Management has tried to give a shining face to this bad news, pointing out that "same-store sales increased every month of the quarter." However, the improvement is a matter of degrees, with sales down 7.8% in May, 6.1% in June and 4.5% in July. In August, same-store sales at Barnes & Noble almost stabilized in August, down only 0.8%.
It's a nice trend – especially the last piece. Nevertheless, it was apparently not enough to give Barnes & Noble's management the confidence to promise profits this year. Most executives would say for guidance that it expects "EBITDA to be in the $ 175 to $ 200 million range" in fiscal 2019. Management's failure to comment on GAAP (generally accepted accounting) principles, when Wall Street expects it to earn $ 0.59 per share this year, this could make investors nervous.
My guess? That is what is hiding behind the massive sell today, even more than the shortfall.
Rich Smith has no position in the mentioned actions. The Motley Fool has no position in the stocks mentioned. Motley Fool has a disclosure policy.
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