Barnes & Noble Begins a New Chapter: Company Will Spinoff Its Nook Business

Barnes & Noble shared some big news with investors today during its quarterly and full-year earnings report. Here's what investors need to know.

Jun 25, 2014 at 11:28AM

Barnes & Noble (NYSE:BKS) reported fiscal 2014 fourth-quarter earnings and full year results before the market opened today. But perhaps more interesting was the company's announcement that it will spin off the Nook Media segment from its foundering retail bookstore business. Barnes & Noble's board of directors approved the split, which will create two separate companies out of the businesses by the end of the first quarter of fiscal 2015.

This was likely welcome news for analysts, as many investors on Wall Street have been pushing for a breakup of Barnes & Noble for some time now. Nook sales fell more than 22% in the fourth quarter to $87 million for the three-month period ended May 3. Device and accessories sales in the Nook segment were also down -- plummeting 30% to $25 million in the quarter. Barnes & Noble blamed lower selling volume and discounting for the sales decline in the period. Moreover, revenue from digital content was $62 million in the fourth quarter, down nearly 19% from a year ago.

Results from Barnes & Noble's retail business, on the other hand, were a bit brighter. The company posted a 0.8% bump in revenue to $956 million in the quarter, while full-year revenue for the retail segment came in around $4.3 billion. Unfortunately, sales at stores open at least a year declined 4.1% during the quarter and nearly 6% for the year. Excluding Nook sales, comparable-store sales fell just 1.9% for the quarter.

Overall, Barnes & Noble's fourth-quarter earnings fell short of analyst estimates. Specifically, Barnes & Noble posted a loss of $0.72 per share for the quarter, which was more than the $0.59 loss analysts' were expecting. Nevertheless, quarterly revenue came in at $1.3 billion, which topped the Street's estimates for revenue of $1.1 billion in the period. Shares of Barnes & Noble were up more than 8% today in early trading on the news.

Tamara Rutter has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers