Barnes & Noble cuts year sales view and shares fall

NEW YORK (Reuters) - Barnes & Noble Inc, cut its full-year sales forecast on Thursday, blaming a troubled U.S. economy, sending the shares of the largest U.S. specialty bookseller down more than 3 percent.

But the company said maintaining lower inventory and offering fewer discounts is helping it prevent its sales margins from eroding further and pointed to growth in its Internet business as a bright spot.

"Even in this soft retail environment across America, the book business is stubbornly holding up," Barnes & Noble Chief Executive Steve Riggio told analysts during a call.

Net income in the company's fiscal second quarter that ended August 2 fell to $15.41 million from $18.05 million a year ago, when results were bolstered by record demand for "Harry Potter and the Deathly Hallows."

Earnings per share rose to 27 cents from 26 cents, boosted by fewer shares outstanding in the quarter.

Excluding a tax benefit, the company reported earnings of 15 cents per share, above analysts' estimates of 9 cents per share, according to Reuters Estimates. Barnes & Noble had forecast quarterly earnings in a range of between 8 cents and 13 cents per share.

Barnes & Noble's top titles during the quarter included Randy Pausch's "The Last Lecture," Lauren Weisberger's "Chasing Harry Winston" and David Wroblewski's "The Story of Edgar Sawtelle," the company said.

The company's share were down $1.12 at $24.62 in late afternoon trading.

NO WORD ON BORDERS

Like many other retailers, booksellers have been struggling to attract demand in the weak U.S. economy, given higher prices for necessities such as gasoline and food.

Barnes & Noble said earlier this year it was looking into a potential bid for rival Borders Group Inc, but a recent report in the Wall Street Journal said it was unlikely to go through with the attempt due to a tight lending market and other concerns.

Barnes & Noble made no comment about the potential bid during a call with analysts.

Besides its rivalry with Borders, Barnes & Noble also competes with a host of online book sellers, foremost of which is industry giant Amazon.com Inc.

The company said quarterly sales fell 1.6 percent to $1.2 billion. Sales at its stores open at least a year, a key gauge known as same-store sales fell 4.7 percent.

Excluding last year's sales of Harry Potter, it said same- store sales fell 1.5 percent. Comparable online sales rose nearly 14 percent.

Barnes & Noble also said it received less store traffic during telecasts for the Olympics this month.