NEW YORK (AP) — Barnes & Noble on Tuesday posted a loss in the fiscal second quarter and lowered its guidance due to expected weak holiday sales and higher-than-expected costs to ramp up production of its electronic book reader, the Nook.
Barnes & Noble launched its e-reader Nook, a competitor with Amazon.com’s popular Kindle, last month and said the device would begin to ship in late November. Last week, it said the Nook had sold out and orders placed beginning Nov. 20 would be fulfilled Jan. 4.
On Tuesday, the company said it was ramping up production for the Nook, causing higher-than expected production costs, and said it would increase future investment in its digital strategy.
The bookseller’s fiscal second-quarter loss totaled $24 million, or 43 cents per share. That compares with a loss of $16 million, or 34 cents per share, last year. Excluding costs related to purchasing its college bookstore unit from its chairman, the loss totaled 30 cents per share.
Revenue rose 4 percent to $1.16 billion from $1.11 billion last year for the period ended Oct. 31. Best sellers included Dan Brown’s “The Lost Symbol,” Jeff Kinney’s “Dog Days” from the “Diary of a Wimpy Kid” series and Mitch Albom’s “Have a Little Faith.”
Sales in stores open at least one year, considered a key retail measurement because it excludes the effect of adding or closing stores, fell 3.2 percent.
The company, based in New York, now expects fiscal-year earnings of 33 to 63 cents per share, down from previous guidance of 59 to 89 cents per share. Analysts predict a profit of 99 cents per share.
It expects sales in stores open at least a year to fall 1 to 3 percent.
Traditional bookstores have had rough going because of increased competition from online sellers and discounters. Consumers have also shifted away from discretionary purchases amid tough economic times.
Smaller rival Borders Group said lost $38.5 million, or 64 cents per share, in the third quarter. That compares with a loss of $172.2 million, or $2.85 per share, during the same period a year earlier. Its revenue fell 13 percent to $602.5 million.
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