It’s not nearly as easy as it seems for the large bookstore chains to make money. Barnes & Noble has been producing a smaller profit than its shareholders would like to see and Borders continues to disappoint its own by reporting another loss in its latest quarterly results.
Harry Potter helped, but even without the boy wizard, sales grew at Borders Group Inc. bookstores worldwide in the second quarter, reversing a year-long trend of declines at the company’s U.S. stores.
It still wasn’t enough to swing the Ann Arbor-based bookseller to a profit.
Hampered by a charge relating to settlement of a California lawsuit and costs from its new strategic plan, Borders lost $25.1 million, or 43 cents a share, in the quarter ended Aug. 4. Analysts expected a 34-cent loss.
Without the one-time expenses, Borders would have lost $15.3 million. Its 2006 second quarter loss was $18.4 million.
“We fully realize we have a lot of hard work yet to do,” Borders chief executive George Jones said Wednesday during a conference call with investors and analysts.
Borders now has 20 million people signed up for its Borders Rewards customer loyalty program and continues to sign new subscribers up at a rate of 150,000 per week since April, when major changes to the program were announced.
“Results were far from impressive, but for the first time in several quarters, (Borders) is not redefining the low end of its earnings potential with a quarterly report,” Goldman Sachs analysts advised investors in a note Wednesday. “Sales results are encouraging, and losses are roughly in line with expectations.”
News like this helps me to understand why Barnes & Noble has decided to stock the O.J. Simpson garbage on its shelves despite announcing earlier that it would not do so. Times are not all that great for the two big chains.