Barnes & Noble, Inc. (NYSE:BKS) just reported its fiscal 2014 first-quarter results, and, as evidenced by the stock’s 16% drop during Tuesday’s intraday trading, things weren’t pretty for the longtime bookseller.
Specifically, Barnes & Noble, Inc. (NYSE:BKS)’s consolidated revenue declined 8.5% from the same year-ago period to $1.3 billion, while consolidated earnings before interest, taxes, depreciation, and amortization flipped to a loss of $8.9 million, compared with positive EBITDA of $5.8 million this time last year. Meanwhile, the company’s consolidated quarterly net loss more than doubled over last year’s fiscal first quarter to $87 million, or $1.56 per share.
Declines across the board
So what drove those numbers?
Barnes & Noble, Inc. (NYSE:BKS)’s Nook segment, for one, posted a 20.2% year-over-year revenue decline to $153 million, hurt by a 23.1% decrease in device and accessories sales and a 15.8% year-over-year decline in digital content sales, the latter of which Barnes & Noble, Inc. (NYSE:BKS) is once again blaming on last year’s strong comparison driven by sales of The Hunger Games and Fifty Shares of Grey trilogies.
If you recall, I voiced skepticism for that same excuse last quarter, especially considering the company’s Nook device sales are simply getting destroyed by stronger competition in Amazon.com, Inc. (NASDAQ:AMZN)‘s Kindle lineup and Apple Inc. (NASDAQ:AAPL)‘s iPad devices.
Remember, just a few weeks ago Amazon.com, Inc. (NASDAQ:AMZN) reported a 22% increase in its own overall revenue, helped by strong digital sales, with CEO Jeff Bezos telling investors:
This past quarter, our top 10 selling items worldwide were all digital products — Kindles, Kindle Fire HDs, accessories and digital content. The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime instant video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome.
Meanwhile, the massively profitable Apple Inc. (NASDAQ:AAPL) sold 14.6 million iPads and a record 31.2 million iPhones during the June quarter alone — an impressive feat even as it gears up to launch the widely anticipated latest versions of its products next month — which helped drive a 25% year-over-year increase in the company’s sales from iTunes, software, and services to $3.99 billion.
In the end, poor Barnes & Noble, Inc. (NYSE:BKS) is kidding both itself and investors by trying to place any of the blame for its digital sales decline on just two particularly popular book franchises.