As J.K. Rowling toils away somewhere in Scotland on the final edition of Harry Potter, Barnes & Noble
All things considered, it was still a decent quarter. Total revenues were down and comp-store sales were down 2.6% in the flagship superstores, but gross margins improved and operating income jumped nicely on a 5% drop in depreciation and amortization expense. OK, I realize that it's not ideal to build your operating growth on the foundation of lower D&A expense, but when your best sellers include books by Al Gore and Anderson Cooper, growth is growth.
In the absence of any new best-sellers, it'll probably be tough going for Barnes & Noble and Borders
Doom and gloom aside, Barnes & Noble is a good operator and does seem to be more or less in the vicinity of earning back its cost of capital. That's not an especially bullish argument, though, and I don't think anyone considering B&N shares should expect major outperformance in the short run. If you really want to make money in retail, there's more promising candidates out there today than Barnes & Noble.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).