NEW YORK (Reuters) - Barnes & Noble Inc BKS.N forecast lackluster same-store sales for fiscal 2010, raising concerns that its recent purchase of College Booksellers would not immediately boost results, and its shares fell 10 percent.
The U.S. bookseller sees comparable-store sales falling about 1 to 3 percent in the second quarter. For all of its new 2010 fiscal year, that runs from May 3 2009 to May 1 2010, it sees same-store sales falling between 2 percent to 4 percent.
On September 30, Barnes & Noble said it would change its fiscal reporting period following the August purchase of College Booksellers to align its results with that business.
The acquisition was meant to boost Barnes & Noble’s store base and help it expand into digital textbooks. But the company said on Thursday that same-store sales fell 4.1 percent at its namesake stores and 0.7 percent at the College outlets in the nine weeks ended October 3.
“Despite what mathematically looks like an accretive acquisition, our concern is that Barnes & Noble has doubled its exposure to technology change by acquiring another retailer that may be even more vulnerable to digitization than its core,” Credit Suisse’s Gary Balter said in a research note.
The quarter-to-date results pointed to weakness in the company’s core business, despite a boost from the recent release of Dan Brown’s “The Lost Symbol,” as well as deterioration in the recently acquired College business ahead of the key holiday selling season.
While new textbooks were up mid-single digits, the College business saw some decline in general merchandising and other categories due to the recession.
“The industry is mature, and faces challenges such as a secular decline in adult readership levels and an increasing shift toward eBooks, clouding Barnes & Noble’s future growth potential,” Michael Souers, a retail analyst with Standard & Poor’s Equity Research wrote in a note to clients.
Barnes & Noble said it expects full-year earnings per share of 59 cents to 89 cents, including transaction costs and purchase accounting adjustments. For the second quarter, it expects a loss per share of 45 cents to 55 cents, including one-time transaction costs.
Barnes & Noble shares were down $2.40 to $21.49 in afternoon trading on the New York Stock Exchange.
Additional reporting by Michele Gershberg; Editing by Derek Caney and Tim Dobbyn