We turn the next fiscal page of the Barnes & Noble (BKS) saga tomorrow morning, and it's not a pretty picture book at first glance. Analysts are holding out for a profit of $0.12 a share -- reversing a year-ago deficit -- in its fiscal first quarter but with a year-over-year sales plunge of 19%, to $999.25 million.
You have to go all the way back to 2001 to find the last time that the meandering bookseller has posted quarterly sales below $1 billion, according to S&P Capital IQ data.
We do have to keep the boo birds in check here, though. The top-line drop isn't as problematic as it may seem, because the chain completed the spin-off of its 724 campus bookstores as Barnes & Noble Education (BNED 0.91%) last month. Investors received 0.632 shares of Barnes & Noble Education for each share of Barnes & Noble owned. We're eyeing what could be Barnes & Noble's first sub-billion-dollar quarter in nearly 14 years, but we're also not including its college stores.
The climate is surprisingly vibrant in the world of leafy page turners. The fourth book in the 50 Shades of Grey series rolled out in June and July treated bibliophiles to unexpected new releases out of Harper Lee and Dr. Seuss. This all adds up to what should be brisk traffic at the otherwise challenged Barnes & Noble cash registers.
It's not the only thing new at the last major book-selling superstore left standing: Ronald Boire took over as CEO today. The retailer's former helmsman, Michael Huseby, was tapped to lead the charge at Barnes & Noble Education earlier this summer.
This doesn't mean that Barnes & Noble has been an easy sell for investors. It's fallen short of Wall Street's profit targets in two of the past three quarters. NOOK has been a drag on performance. The once-promising e-reader platform has been fading fast in recent years, and sales dropped 48% in fiscal 2015. Its retail stores declined a modest 4% for the year. Only Barnes & Noble's campus bookstores showed an uptick last year, and now that business is a stand-alone company.
This doesn't mean that we can blame the NOOK if the bottom line disappoints again. We've seen EBITDA decline at a faster rate than the dip in sales for Barnes & Noble's bread-and-butter retail business. Investors should get a break on that front given the strong slate of summertime releases, but we'll have to wait until the page actually turns tomorrow to see if Barnes & Noble can impress the market for the first time without its campus bookstores to save the day.