Barnes & Noble (NYSE:BKS) is expected to post a profit this year
The business of bookstores is on a decline ever since Amazon.com (NASDAQ:AMZN) became an online book retailer. To top it off, the company also enjoys a monopolistic status over e-books. It is due to online retail companies that businesses like Barnes & Noble (NYSE:BKS) are not flourishing.
Barnes & Noble (NYSE:BKS) posted its first loss report in the year 2011: the loss was around $74 million. This loss resulted due to a decrease in the same store sales of the company. The company’s future became uncertain. Since then, the revenues of the company have gone down by more than 10 percent. The same store sales have decreased by 5.8 percent when the figures are compared with the numbers of last year.
The company is still optimistic about its future. It has employed a better merchandising and cost cutting technique, which has resulted in a 450bps increase in the company’s gross margin. The company, for the very first time since 2010, is about to post a profit. Thanks to its effective efforts.
The sales of Barnes & Noble (NYSE:BKS) declined by 7 percent in the first quarter of the fiscal year 2014. However, the loss per share reduced to $0.56 from a previous figure of $1.56. Comparable sales of the company remained steady with a drop of just 0.4 percent. Even though the company has reported a loss for its first quarter, its figures will spike up in the coming weeks, for the business of the company is seasonal: the retail figures will go up in the holiday shopping month. Moreover, most of the students buy their books in the fall/winter semester, thus boosting company’s numbers in the ending period of the year.
It is important to mention here that the company has already started segments of Gifts and Toys & Games. These segments have helped Barnes & Noble (NYSE:BKS) gain profit margins and compensate for the decreased same store sales. The Toy & Games segment of the company resulted in a comp of 12 percent last year. This year, the company expects the numbers to grow even further. As for its Gifts segment, Barnes is planning on introducing a shelf in its shops, carrying the most popular gifts of the season, including turntables, beer kits and popcorn makers.
In order to boost its sales from the books segments, the company has planned to offer more than 500,000 books signed by famous personalities, including George W. Bush, Hillary Clinton, Dan Brown and E.L. James. This idea has received much appreciation from customers as well as the publishing community. Market experts and analysts are expecting the company to post a profit of $0.18 for the current year.
Coming to the stock prices of Barnes & Noble (NYSE:BKS), the company, on the last trading day of November 30, 2014, started its stocks at a price of $23.26 and closed at a price of $23.36, after hitting the highest price of $23.92. The company has a market capitalization of $1.4 billion.