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Media 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

08/17/2006

BARNES & NOBLE REPORTS SECOND QUARTER FINANCIAL RESULTS:

Achieves Earnings per Share Guidance
Declares Quarterly Dividend

New York, NY (August 17, 2006)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for the second quarter ended July 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 September 8, 2006, payable on September 29, 2006.

Sales for the second quarter decreased 1% to $1.2 billion largely due to last year’s record breaking sales of Harry Potter and the Half-Blood Prince.  Barnes & Noble store sales of $1.0 billion were flat compared to a year ago, with comparable store sales decreasing 2.6% for the quarter.  B. Dalton sales were $21.9 million for the quarter, a 31% decrease compared to the prior year due to store closings and a 9.1% comparable store sales decline.  Sales at Barnes & Noble.com were $82.7 million, a decline of 14% compared to the prior year period.

Bestselling titles during the quarter included Kim Edwards’ The Memory Keeper’s Daughter, Al Gore’s An Inconvenient Truth, Fannie Flagg’s Can’t Wait to Get to Heaven and Anderson Cooper’s Dispatches from the Edge.

Second quarter net earnings were $16.6 million or $0.24 per share, in-line with company guidance of $0.22 to $0.26 per share.  Second quarter results include a $0.04 per share impact due to stock compensation expense as 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.

The company acquired approximately 677,000 shares for $26 million and approximately 2.8 million shares for $119 million under its share repurchase program in the second quarter and year-to-date, respectively.

GUIDANCE

For the third quarter, the company expects comparable store sales at Barnes & Noble stores to range from flat to an increase in the low-single digits.  The company continues to expect full year comparable store sales to increase in the low single digits. 

Barnes & Noble, Inc.’s third quarter loss per share is expected to be in a range of $0.04 to $0.08, which includes stock compensation expense of $0.04 per share. The company continues to expect full year 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 July 29, 2006, the company operated 687 Barnes & Noble stores and 112 B. Dalton stores.  During the second quarter, four Barnes & Noble stores were opened and one was closed.  One B. Dalton store was closed during the quarter.

A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, August 17, 2006, and is accessible at www.barnesandnobleinc.com/webcasts.  The call will also be archived at www.earnings.com for one year.

Barnes & Noble, Inc. will report third quarter earnings on or about November 16, 2006.

FINANCIAL TABLES

Here you can download financial tables related to the sales and earnings for the second quarter ended July 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 799 bookstores in 50 states. For the fifth 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.