Barnes & Noble losses: Blame it on Harry Potter
Barnes & Noble needs more magic.
The bookstore chain said sales fell 8% and losses soared. The reason: There was no new Harry Potter installment this year. “Harry Potter and The Cursed Child” hit stores during the same period last year.
The company said it expects sales will be flat over the final six months of its current fiscal year. But that forecast did little to assure investors, as the stock fell 10% in early trading following the report, leaving shares down 37% so far this year. The stock got a temporary lift earlier this month when the Wall Street Journal reported that Sandell Asset Management Corp, which bought a stake in company in July, has made an offer to take the company private.
The weaker sales in the quarter led to a nearly 50% jump in losses to $30.1 million in the most recent quarter, bringing total losses to $40.9 million in the first six months of its current fiscal year.
Barnes & Noble did post a full year profit in its most recent fiscal year thanks to strong profits for the holiday shopping period. But the company has been reporting more annual losses than profits in recent years, and has lost a total of $345 million since early 2010.
The company is one of many that has been hit hard by the growth of online shopping sites such as Amazon. But unlike other troubled brick-and-mortar retailers who have closed a record number of stores so far this year, Barnes & Noble has kept its total store count relatively unchanged.