In spite of an unspectacular fourth-quarter earnings report -- to put it generously --  Barnes & Noble's (NYSE:BKS) stock price rose by 10% after the figures were unveiled.

In this clip from the Market Foolery podcast, Chris Hill and Bill Barker explain why. Also, they take a closer look at Barnes & Noble's newest strategy -- serving alcohol at locations with outdoor sections. Find out what the company might be thinking here, what a model like this could grow into, and why we're not at all sure if it'll pan out the way the company hopes.

A transcript follows the video.

This podcast was recorded on Jun. 23, 2016. 

Chris Hill: Barnes & Noble's fourth quarter bears a striking resemblance to Bed Bath & Beyond's. Same-store sales were down, revenue came in lower than expected. They reported a loss for the quarter, so there's no profits to talk about. And yet, shares are up 9% to 10% this morning! Are expectations for Barnes & Noble significantly lower than they are for someone like Bed Bath & Beyond?

Bill Barker: I'll explain this in two steps. One is that, for reasons which, right now, as I'm looking at the stock ticker, Barnes & Noble is going for $11.29 a share. At the close of the market on Tuesday, it was going for $11.23. Yesterday, Wednesday, it closed at $10.44. So, people sold the stock off yesterday, apparently, in fear of what today's report would bring. The report came in, and it's about what was expected on Tuesday. So, I hope that helps clarify that this is not some new enthusiastic change in market sentiment for Barnes & Noble. It's really, yesterday there was a big sell off.

Hill: So, yesterday the feeling was: "Oh my God, this is going to be horrific!" And then today, it's like: "Oh! Well, it was bad, but ... "

Barker: "It's only as horrific as we thought on Tuesday. It wasn't some new level of nightmare ..." which, it's been for a long 10 to 15 years for Barnes and Noble. And it continues to be a tough environment. Another reason why it may be up a little bit today is they had an investor analyst meeting. I caught a little bit of this online toward the end, because it was early and I just caught the end of it. They're talking about a new concept they're rolling out in 2017, four locations -- or, maybe in October of this year, the first one -- in Eastchester, New York. There's going to be a little bit of an outside, and there's going to be some alcohol served. It's doing a little bit of the same look at -- can alcohol be something that we can rely on to keep people around in the stores? Starbucks has looked at this, and Chipotle. It's a thing. Whole Foods.

Hill: Right, but Starbucks and Chipotle, the underlying business is food and beverage. This is a bookstore, that's now apparently hired an executive to head their new restaurant group? So this is a bookstore that's saying, "Hey, you know what's really going to move books? Getting people drunk."

Barker: You know what has worked better in the last 10 years, is serving food, than selling books in a bookstore. The restaurant groups as a whole have done great. Books have just gone away. And what's really gone away for Barnes & Noble is Nook, which, I guess it was worth a shot, maybe? Apparently not in terms of the actual cash earned. But looking at what Kindle was doing, and thinking, "We're going to be buried by this if we don't compete against it," I guess they were both. Buried by it and competed against it. Lost money, and now they're taking steps back.

Hill: Alright, having just made fun of this idea, let me go to the other side. If this works, let's say that this works, and these four new locations actually bear fruit for them. How quickly do you think we as investors will know this? What is the sign to look for? Is it: "Hey, we're rolling out eight more?"

Barker: I don't know. I think it is going to start as a small part of a business. Now there are fewer locations for Barnes & Noble than there used to be. But another place that they've got, and they could do this, is all the college stores, the college book stores that are run by Barnes & Noble. You've seen those, you've been in those.

Hill: Sure.

Barker: From what I understand, the kids in college still drink. The legal ones, the 21 year olds. The rest wait patiently.

Hill: The college students who are 18, 19, and 20, they wait their turn.

Barker: Right. Law-abiding citizens that our college-going youth are ... sure. I assume. I haven't been on enough campuses to know.

Hill: Do you really think that if these four locations for Barnes & Noble work out, that their next move is to open one on a college campus?

Barker: I think they're grasping at straws. This might work out, and they still have a business that exists and hasn't made money, basically, for the last five years. They're looking at a business that typically does make money. I think that's what they're doing.

Hill: Alright. You know what? The Barnes & Noble that's a couple miles away from here ...

Barker: Let me just add. You've been known to read.

Hill: Yes.

Barker: Do you ever do so without a drink in your hand? You're at home, a book is open on your lap. What's the chance that you're drinking?

Hill: Let's see ... I would say, between reading at work ...

Barker: They also serve coffee.

Hill: And reading at home, there's 100% chance I'm drinking something when I'm reading.

Barker: OK. So they're just getting around to it.

Hill: So take heart, Barnes & Noble shareholders! 

Barker: You have one customer who's guaranteed to be partaking in your new plan!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.