Barnes and Noble FY 4Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“With respect to the NOOK segment, the business incurred $475 million EBITDA loss for fiscal year 2013, much higher than our previous expectations. This loss was driven primarily by NOOK inventory-related charges of $222 million, which includes an additional $133 million that the company recorded during the fourth quarter as a result of a shift in strategic direction.”

“we are adjusting our hardware and device strategy to de-risk the NOOK business plan. The company is away — is moving away from independently building our own tablets and intends to partner on future tablet programs with partners to design co-branded tablets with NOOK content.”

“To summarize, we are 100% not exiting the device business, but we are materially adjusting our approach in the competitive and capital-intensive tablet market.”

“The new partnership model on tablets should significantly reduce NOOK losses going forward as we provide ongoing enhancements to our bookstore service and launch new eReaders.”

“On a full year basis, Retail sales declined 5.9% to $4.6 billion. Full year comparable bookstore sales decreased 3.4%”

“the company is currently in the process of finalizing its evaluation of certain prior year financial statement amounts, which may result in a revision to the financial statements.”

“In fiscal 2013, we opened 2 Retail bookstores and closed 18”

“we know this is a sizable change from our existing strategy. It will — the other thing we know is we can sell a lot of tablets through our channels. We’ve got media-hungry consumers. We’ve got millions of them that order from our digital bookstore. And so what we’ve said is we want to capitalize on our design capabilities and work with a third-party to source co-branded tablets that we can sell through our stores and online, connect it to our digital bookstore. Exactly how that work — will work, I don’t have the specifics today. We’re in those discussions now. But what we did know is we want to move away from taking on all that risk ourselves. And as we’ve seen the tablet market, especially in the area we competed in which is sub-8-inch, got extremely competitive, and it was very capital-intensive to build our own tablet. So we have a lot of interested parties that we’re in discussions with. And I know that’s not the exact specific you want, but as I said, you can expect further announcements from us in the future.”

“to provide a little more color on the impact of Fifty Shades, it was worth 4 to 5 points of comp for us last year. It was that big a book.”

Leave a Reply

Your email address will not be published. Required fields are marked *