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Here's Why Barnes & Noble (BKS) Shares are Popping Today

Shares of Barnes & Noble, Inc. BKS are up about 7.5% in afternoon trading Friday, building on Thursday's momentum after the company released better-than-expected financial results for its fiscal 2017 fourth quarter.

Barnes & Noble reported a fourth quarter earnings loss of 19 cents per share on revenue of $821 million. Analysts expected a loss of 23 cents per share on revenue of $782.5 million. The company said its Retail segment generated an operating loss of $15.9 million, while NOOK incurred an operating loss of $7.9 million.

The company said that revenue was down 6% from last year, with comparable store sales falling by the same amount. Despite this loss, Barnes & Noble continues to narrow its losses to maintain profitability.

CEO Demos Parneros credits this relative success to the implementation of cost-cutting measures, stating, "While fiscal 2017 proved to be a challenging year for the company, we reduced costs by $137 million, enabling us to sustain profitability."

"In fiscal 2018, we are focusing on ways to improve the business and reignite sales through an aggressive test and learn process and companywide simplification process that will take out cuts," Paneros said.

Additionally, online sales rose nearly 3% for the quarter and 3.7% for the full year. The company continues to try to find new ways to continue this momentum, such as enhancing their membership program and introducing new marketing and promotional offers. However, Barnes & Noble has to compete with other online booksellers, particularly Amazon.com AMZN .

Looking ahead, Barnes & Noble expects comparable bookstore sales to fall in the low single digits, and a full year consolidated EBITDA to be roughly $180 million.

BKS remains a Zacks rank #3 (Hold). The company has a lot of work ahead of it to maintain this trend, but it does have a VGM score of 'A.'

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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