Personal Finance

Why Barnes & Noble, Inc. Stock Plunged Today

Barnes & Noble store front

What happened

Shares of Barnes & Noble, Inc. (NYSE: BKS) were down 14.2% as of 11:30 a.m. EST Friday after the bookseller announced disappointing holiday-season sales.

More specifically, late yesterday Barnes & Noble revealed that total sales for the nine-week holiday period ending Dec. 30, 2017 declined 6.4% year over year to $953 million. That included a 6.4% decline in comparable-store sales, and a 4.5% dip in online sales.

Barnes & Noble store front

IMAGE SOURCE: BARNES & NOBLE.

So what

Barnes & Noble also noted that it entered the month of December "encouraged" by its comparable-store sales improvements throughout the fiscal second quarter -- though to be fair, those results were technically announced in late November, causing shares to plunge almost 12% the following day in response. But things took a turn for the worse as the year came to a close, with lower traffic leading to softening sales for the full month of December.

Digging deeper, weakness in the gift, music, and DVD categories accounted for almost half of the comparable-store sales decline. Similar to fiscal Q2, Barnes & Noble's book business outperformed the rest but still saw its sales fall 4.5%.

Now what

As such, Barnes & Noble now expects comparable-store sales for the full fiscal year to be down in the mid-single-digit percent range, which should translate to consolidated EBITDA of $140 million to $160 million. Previously, Barnes & Noble predicted its full-year EBITDA would arrive closer to $180 million.

Nonetheless, Barnes & Noble insists it remains focused on executing its strategic turnaround plan, including aggressive expense management initiatives. But given news of its painful performance in arguably the most crucial time of the year, it's no surprise to see shares plunging again today.

10 stocks we like better than Barnes & Noble

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Barnes & Noble wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 2, 2018

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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.

Other Topics

Stocks

Latest Personal Finance Videos

How Student Loan Refinancing Works

Though it may be a great way to lower monthly payments, not everyone understands the student loan refinancing process. NerdWallet explains it. For more, try our refinance calculator: http://bit.ly/nerdwallet-student-loan-refinancing-calculator

Nov 25, 2019

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More