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

or

Investor Contact:
Joseph J. Lombardi, Chief Financial Officer
Barnes & Noble, Inc.
(212) 633-3215
jlombardi@bn.com

05/18/2006

Barnes & Noble Reports First Quarter Financial Results:

Achieves Earnings Per Share Guidance
Declares Quarterly Dividend

New York, NY (May 18, 2006)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for the first quarter ended April 29, 2006.  In addition, the company also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share for stockholders of record at the close of business on June 9, 2006, payable on June 30, 2006.

Sales for the first quarter increased 2% to $1.1 billion. Barnes & Noble store sales increased 2% to $980.5 million, with comparable store sales decreasing 0.3% for the quarter.  B. Dalton sales were $23.3 million for the quarter, a 26% decrease due to store closings and a 1.8% comparable store sales decline.  Sales at Barnes & Noble.com of $91.1 million for the quarter were flat compared to the prior year period.

Bestselling titles during the quarter included John Grogan’s Marley & Me, James Patterson’s Fifth Horseman, Stephen King’s Cell, Giada de Laurentiis’ Giada’s Family Dinners and Jim Cramer’s Real Money.

First quarter net earnings were $10.0 million or $0.14 per share, in-line with company guidance of $0.10 to $0.14 per share.  Effective this quarter, the company has adopted Statement of Financial Accounting Standards No. 123(R) (As Amended), “Share-Based Payment,” and began expensing stock options at the beginning of fiscal year 2006. Excluding a $0.04 per share impact due to stock compensation expense, first quarter net earnings were $0.18 per share, representing a 31% increase compared to the prior year.

In the first quarter of 2006, the company acquired 2.2 million shares for $93 million under its share repurchase program.

 

GUIDANCE
For the second quarter, the company expects comparable store sales at Barnes & Noble stores to decrease in the low-single digits due to the difficult comparisons against last year’s 4.3% comparable store sales increase, which included extraordinary sales of Harry Potter and the Half-Blood Prince.  For the full year, the company continues to expect comparable store sales to be in the low single digits. 

Barnes & Noble, Inc.’s second quarter earnings per share is expected to be in a range of $0.22 to $0.26, which includes stock compensation expense of $0.04 per share.  For the full year, the company continues to expect earnings per share to be in a range of $2.20 to $2.30, which includes stock compensation expense of $0.15 per share.

As of April 29, 2006, the company operated 684 Barnes & Noble stores and 113 B. Dalton stores.  During the first quarter, eight Barnes & Noble stores were opened and five were closed.  B. Dalton closed five stores during the quarter.

A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 11:00 A.M. ET on Thursday, May 18, 2006, and is accessible at www.barnesandnobleinc.com/webcasts.  The call will also be archived at www.fulldisclosure.com for one year.

Barnes & Noble, Inc. will report second quarter earnings on or about August 17, 2006.

FINANCIAL TABLES

Here you can download financial tables related to the sales and earnings for the first quarter ended April 29, 2006. 

Consolidated Statements of Operations (13KB)
Consolidated Balance Sheets (13KB)

To read the tables, you will need Adobe Reader, available at no charge from Adobe. Click here to download Adobe Reader and follow the step-by-step instructions.



About Barnes & Noble, Inc.

Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 797 bookstores in 50 states. For the fourth year in a row, the company is the nation's top retail brand for quality, according to the EquiTrend® Brand Study by Harris Interactive®. Barnes & Noble conducts its online business through Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce sites and the number one online bookseller for quality among e-commerce companies, according to the latest EquiTrend survey.

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, the successful and timely completion and integration of the company’s new New Jersey distribution center, 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.