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Contact: Mary Ellen Keating, Senior Vice President
Corporate Communications, Barnes & Noble, Inc.                                  
(212) 633-3323
mkeating@bn.com

03/20/2003

BARNES & NOBLE, INC. REPORTS 2002 CONSOLIDATED EPS INCREASES 48%

2003 Consolidated EPS Expected to Increase 40%

New York, NY (March 20, 2003)—Barnes & Noble, Inc. (NYSE:BKS), the world’s largest bookseller, today reported sales and earnings for the fourth quarter and for the full year ended February 1, 2003:

2002 RESULTS

Consolidated Earnings

Consolidated net earnings for the fourth quarter increased approximately 32% to $111.0 million or $1.49 per fully diluted share. Consolidated net earnings for the year increased over 50% to $99.9 million or $1.39 per fully diluted share, including a non-cash impairment charge recorded in the first quarter of 2002, relating to the company’s investment in Gemstar. Without the impairment charge, consolidated EPS would have been $1.58, exceeding analyst consensus estimates.

Bookstores

Bookstore sales were $1.3 billion for the fourth quarter, an increase of 1.9%, and $3.8 billion for the year, an increase of 4.5%. Net earnings for the fourth quarter were $91.3 million or $1.21 per fully diluted share and $120.8 million for the year or $1.56 per fully diluted share.

  • Barnes & Noble store sales were $1.2 billion for the quarter, an increase of 4.0% and $3.6 billion for the year, an increase of 6.4%. Comparable store sales decreased (3.0)% for the fourth quarter and were flat for the year. The company opened 47 new Barnes & Noble stores for the year and closed 10 locations ending the year with 628 stores.
  • B. Dalton sales, which comprise approximately 7.0% of total bookstore sales, were $88.9 million for the quarter, a decrease of (20.7)%, and $260.0 million for the year, a decrease of (16.2)%, due primarily to the closing of 47 stores. Comparable store sales decreased (11.4)% for the fourth quarter and (6.4)% for the year.

GameStop

GameStop, the nation’s largest video-game and entertainment-software specialty retailer, continued to gain market share in the face of a weak economy and reported a double digit comparable store sales increase. GameStop sales were $520.4 million for the quarter, an increase of 1.2% and $1.4 billion for the year, an increase of 20.7%. Comparable store sales decreased (7.4)% for the fourth quarter and increased 11.4% for the year. The company’s share of net earnings for the fourth quarter was $17.7 million or $0.23 per fully diluted share and $26.8 million for the year or $0.34 per fully diluted share.

Barnes & Noble.com

Barnes & Noble.com reported a fourth quarter sales increase of 11.2%, as compared with the year-ago period. Full year 2002 sales increased 4.5% to $422.8 million. Total operating expenses decreased 72.0% quarter-over-quarter and 50.1% year-over-year. The significant improvements in operating loss are attributable to improved efficiencies, greater productivity, cost control measures and the absence of impairment and special charges.

The company’s share of net losses for Barnes & Noble.com was $5.6 million or $(0.04) per share for the quarter and $26.8 million or $(0.21) per share for the year.

Other Investments

Other investments for the fourth quarter consisted solely of the company’s investment in Calendar Club. Calendar Club earned $11.3 million or $0.09 per share for the quarter and $1.6 million or $0.02 per share for the year.

For the year, other investments resulted in a loss of $13.9 million, or $(0.11) per share. This includes a one-time, non-cash charge of $0.09 per fully diluted share recorded in the second quarter to write-off the remaining carrying value of the company’s investments in iUniverse.com, Book magazine, Indigo Books & Music Inc. and enews, inc.

"While 2002 proved to be a challenge for retailers, Barnes & Noble delivered to shareholders 48% growth in consolidated EPS," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "As a result of investments, and key operational, merchandising and marketing initiatives, we have registered another year of market-share gains. This market leadership, plus the ever-present exposure from more than 11 million unique visitors per month to Barnes & Noble.com, has also translated into unprecedented brand leadership."

"Despite current uncertainties, we are focused on our business-building initiatives and remain optimistic about the long-term fundamentals of the business," continued Mr. Riggio.

GUIDANCE FOR 2003

Consolidated

Consolidated results for the first quarter are expected to range from $0.00 to $(0.04) per share, based upon a basic share count of approximately 65 million shares.

The company projects consolidated earnings-per-share growth for fiscal year 2003 of approximately 40.0%, ranging from $1.93 to $2.01 per share, based upon approximately 76 million fully diluted shares.

Bookstores

The company’s 2003 bookstore earnings guidance includes the operations of Calendar Club and Sterling Publishing. In addition, the company will discontinue allocating interest expense to GameStop and will include the interest expense within the bookstores’ financial results.

For the first quarter, the company expects comparable store sales at Barnes & Noble stores to decrease between (3.5)% and (5.0)%. Based upon these projections, the company expects results to range between $0.00 and $(0.02) per share for the first quarter of 2003, versus an equivalent $0.01 for the same period last year.

For the fiscal year ending January 31, 2004, the company currently expects Barnes & Noble comparable store sales to range from 0.0% to 1.0%. B. Dalton comparable store sales are expected to range from (6.0)% to (7.0)% for the year.

Based on these sales levels, bookstores are expected to earn between $1.61 and $1.65 per share in fiscal 2003, compared to $1.52 per share in fiscal 2002.

GameStop

For the first quarter, GameStop expects comparable store sales to increase between 5.0% to 7.0%. The company’s share of first quarter net earnings is expected to range from $0.05 to $0.06.

GameStop expects full year revenues to increase 14.0% to 16.0% with corresponding comparable store sales increases of 4.0% to 6.0%. The company’s share of net earnings is expected to range from $0.48 to $0.50.

Barnes & Noble.com

Barnes & Noble.com expects first quarter sales to range between $105 million to $115 million. The company’s share of first quarter net losses per share is in a range of $(0.06) to $(0.07) per share. Full year 2003 sales are expected to be between $430 million to $470 million. The company’s share of net losses per share are expected to be between $(0.14) and $(0.16) per share.

A conference call with Barnes & Noble, Inc.’s management will be simulcast on the Web at (www.companyboardroom.com) beginning at 11 A.M. ET on Thursday, March 20, 2003, and is accessible at (http://www.barnesandnobleinc.com/financials), where it will be archived until April 20, 2003.

The next scheduled press release will be the March sales release on April 10, 2003.



About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) is the world's largest bookseller, operating 634 Barnes & Noble bookstores in 49 states. It also operates 234 B. Dalton Bookseller stores, primarily in regional shopping malls. The company offers titles from more than 50,000 publisher imprints, including thousands of small, independent publishers and university presses.

Barnes & Noble also has approximately a 63% interest in GameStop (NYSE: GME), the nation's largest video-game and entertainment-software specialty retailer with 1,393 stores.

General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com.

SAFE HARBOR

This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.