On Thursday, March 22, book retailer Barnes & Noble
- Total sales grew 7%, but same-store sales fell 0.1%. The smaller B. Dalton stores continue to struggle, as sales fall and management works to close stores. Eleven closed down during the quarter.
- Diluted earnings grew 4.5%, accounting for more than 84% of total 2006 earnings, demonstrating how important the fourth-quarter selling season is to Barnes & Noble.
- Management expects to report a loss in the first quarter, partly because of charges to close a distribution center and costs to review its stock options practices. It expects full-year earnings of $1.49-$1.67 per share, down significantly from previous expectations, as Barnes & Noble caters to customers in its loyalty programs, draining its gross margins.
- The company carries a two-star rating in the Motley Fool CAPS intelligence database, as does archrival Borders Group
(NYSE:BGP) and discount book retailer Books-A-Million(NASDAQ:BAMM) . Online bookseller Amazon(NASDAQ:AMZN) carries a lowly one-star rating. The book business is clearly tough these days; Fools may want to look into alternative areas to bet the house on.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$1,878,402 |
$1,753,249 |
7.1% |
|
Net Profit |
$126,978 |
$122,981 |
3.3% |
|
EPS |
$1.84 |
$1.76 |
4.5% |
|
Diluted Shares |
69,131 |
69,855 |
(1%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
33% |
32.8% |
0.1 |
|
Operating Margin |
11.6% |
12.2% |
(0.6) |
|
Net Margin |
6.8% |
7% |
(0.2) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$348,767 |
$372,586 |
(6.4%) |
|
Accounts Rec. |
$100,467 |
$99,117 |
1.4% |
|
Inventory |
$1,354,580 |
$1,313,997 |
3.1% |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$792,977 |
$828,852 |
(4.3%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Fools will have to wait until Barnes & Noble files its 10-K with the Securities and Exchange Commission for juicy cash flow details.
Find out why Fools always follow the money.
Related Foolishness:
Borders is a Motley Fool Inside Value recommendation. Amazon.com has been recommended by Motley Fool Stock Advisor.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
Fool contributor Ryan Fuhrmann is long shares of Barnes & Noble but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
