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

08/21/2003

BARNES & NOBLE ANNOUNCES SECOND QUARTER RESULTS

Comparable Store Sales Increases 5.6%
EPS Exceeds Estimates
Increases Booksellers Full Year Guidance

New York, NY (August 21, 2003)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported financial results for the second quarter ended August 2, 2003.

Barnes & Noble Booksellers

For the second quarter, sales were $977.6 million and net earnings were $12.7 million or $0.19 per share, exceeding previously issued guidance of $0.10 to $0.14.

  • Barnes & Noble store sales were $912.6 million for the quarter. Comparable store sales increased 5.1% for the month of July and 5.6% for the second quarter. The company opened nine new Barnes & Noble stores and closed five locations ending the quarter with 634 stores.
  • B. Dalton sales, which comprise approximately 5.0% of total bookstore sales, were $51.3 million for the quarter, a decrease of (12.9)%. Comparable store sales increased 0.8% for the month of July and 0.7% for the second quarter. The company closed 11 B. Dalton stores ending the quarter with 234 stores.

"Sales were strong throughout the entire second quarter," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "We are pleased to see that hardcover book sales are buoyant again, which is increasing traffic in our stores. Due to current sales trends and a strong fall line up of hardcover releases, we are increasing our sales forecast for the balance of the year."

The company expects third quarter comparable store sales at Barnes & Noble stores to range from 2.0% to 4.0%. Based upon these projections, the company expects earnings to range from $0.05 to $0.09 per share for the quarter, versus an equivalent $0.02 for the same period last year.

Due to improved sales trends, the company is raising full year comparable store sales guidance to a range of 1.0% to 2.0%. Full year earnings are expected to range from $1.66 to $1.70 per share, versus an equivalent $1.52 for the same period last year.

GameStop

GameStop, the nation’s largest video game and entertainment software specialty retailer, reported a comparable store sales decrease of (4.7)% during the quarter. GameStop sales were $305.7 million for the quarter, an increase of 11.5%. The company’s share of net earnings for the second quarter (based upon Barnes & Noble, Inc.’s basic ownership interest of approximately 63%) was $4.2 million or $0.06 per share.

GameStop expects third quarter comparable store sales to range from (5.0)% to flat. The company’s share of net earnings in GameStop is expected to range from $0.08 to $0.09 per share for the third quarter of 2003, versus an equivalent $0.09 for the same period last year.

The company’s share of net earnings in GameStop is expected to range from $0.48 to $0.50 per share for the full year, versus an equivalent $0.43 for the same period last year.

Barnes & Noble.com

Barnes & Noble.com reported a second quarter EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $(7.5) million, a 41.0% improvement from the second quarter 2002 EBITDA loss. The net loss was $(14.2) million, a 31.2% improvement from the second quarter of 2002. The company continued to realize greater efficiencies across its operations, reducing total operating expenses 14.1% quarter-over-quarter.

The company’s share of net losses for Barnes & Noble.com was $(3.2) million or $(0.05) per share for the quarter.

The company expects to complete the acquisition of Bertelsmann’s interest in Barnes & Noble.com in mid-September. The company’s share of third quarter net losses in Barnes & Noble.com is expected to be in the range of $(0.11) to $(0.12) per share, including the greater ownership position due to the acquisition of Bertelsmann’s interest.

The company’s share of full-year net losses in Barnes & Noble.com is expected to be in the range of $(0.23) to $(0.25) per share, including the greater ownership position due to the acquisition of Bertelsmann’s interest.

Consolidated

Consolidated net earnings for the second quarter were $13.7 million or $0.20 per diluted share compared with $1.4 million or $0.02 per share, including a non-cash write off of $(0.11) per share, in the previous year.

Consolidated results for the third quarter are expected to range from $0.01 to $0.07 per share, based upon a share count of approximately 68 million shares.

Full year results are expected to range from $1.89 to $1.97 per share based upon a share count of approximately 77 million shares.

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, August 21, 2003, and is accessible at (http://www.barnesandnobleinc.com/financials), where it will be archived until September 19, 2003.

The next scheduled press release will be the August sales release on September 4, 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.