Borders, Barnes & Noble Book Profits

Surely, you've spent some quality time with yourself, sipping coffee in the café attached to the nearest Borders(NYSE: BGP) or Barnes & Noble(NYSE: BKS), marveling how a trip to the bookstore has become a national pastime. (As evidence of how important the bean-brewing business has become to the bookstores, Borders appointed a vice president of café operations on Aug. 14.) You've probably then thought to yourself, "How can I make money off this? And that girl by the magazines is cute."

Last week, both book retailers reported second-quarter results. Borders, which operates its namesake stores as well as Waldenbooks, reported earnings of $0.04 per share, up from essentially breakeven a year ago. Barnes & Noble reported earnings of $0.02 a share from its various bookstores -- Barnes & Noble, B. Dalton, and Scribner's, among others -- and its stakes in BNBN) and GameStop(NYSE: GME). That's up from a year-ago loss of $0.03 a share.

Let's take a look at the quarterly numbers of the companies, side by side:

BordersBarnes & Noble

Market cap       $1.50 bil    $1.60 bil
Sales          $763.60 mil    $1.16 bil
Earnings         $3.40 mil    $1.40 mil
Comps                -1.0%         0.3%
P/E                   13.8         24.9
1-yr. return          -20%         -45%

What do these numbers tell us? First of all, they show that, although Barnes & Noble has 35% more sales than Borders, the company hasn't been able to convert that to more profits. This is due to the losses Barnes & Noble has taken from its investments in such enterprises as, Book magazine, enews inc., and Indigo Books and Music.

Borders sticks to books and music and has kept costs low. It even relies on help from for online sales. On the other hand, is losing money.

Despite the better performance of Borders, the market still gives Barnes & Noble a higher earnings multiple. Does the potential of GameStop (which experienced 32% year-over-year sales growth),, and its stable of bookstores warrant the premium? Interested investors should turn a few more pages to find out.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1151235, ~/Articles/ArticleHandler.aspx, 6/24/2017 11:39:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
Change down DOW 21394.8 -2.5 0.0%
Change up S&P 500 2438.3 3.8 0.2%
Change up NASD 6265.2 28.6 0.5%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
BGPIQ.DL $0.00 Down +0.00 +0.00%
Borders Group CAPS Rating: *
BKS $7.55 Up +0.55 +7.86%
Barnes & Noble CAPS Rating: *
GME $20.65 Up +0.11 +0.54%
GameStop CAPS Rating: **