Bookseller Barnes & Noble on Thursday reported a fiscal 2017 Q1 net loss of $14.4 million, or 20 cents per share. Adjusted earnings of 7 cents per share were better than the FactSet consensus for a loss of 18 cents per share.
During the period ending July 30, Barnes & Noble sales fell 6.6% to $913.9 million, missing the FactSet consensus of $958 million. Q1 same-store sales fell 6%, badly missing the 0.4% decrease from FactSet analysts.
Barnes & Noble also said it expects fiscal 2017 same-store sales to decline in the low single digits, “given the softer than expected sales results to date, and the expected continuation of the challenging retail environment,” according to a company press release.
Barnes & Noble has struggled to find a strategy that works in the face of fierce competition from Amazon, which began as a bookseller itself two decades ago. Barnes & Noble's Nook e-book reader never really took off, and 2015 holiday season Nook sales were down 33.3% on slower sales of both devices and content. Surprising investors, the retailer last year spun off its lucrative education unit, which itself is facing increased competition from Amazon as it builds its college presence nationwide. Many observers had expected the company to spin off its Nook business instead.
Same-store sales began to rise in January after Barnes & Noble beefed up its non-book offerings under CEO Ronald Boire, who nevertheless was let go last month. In March, the retailer reported sales rose 12.5% across the categories Boire had bet on — toys, games, music and small home goods.
But Barnes & Noble has continued to suffer from the aftermath of its botched mid-2015 relaunch of its website. The retailer announced in March it would close eight stores — its smallest number of closures in 15 years — as it tested new concept stores. The new prototype stores were inspired by Boire's omnichannel approach to retailing: leveraging brick-and-mortar stores to drive customers to make purchases online.
Despite Boire's departure, Barnes & Noble says it remains focused on executing its previously announced strategic initiatives to increase sales and reduce expenses. Executive Chairman Leonard Riggio and other executives have assumed Boire's responsibilities until a new CEO is selected.
Shares slid 3.8% Thursday in pre-market trading.