Barnes & Noble is cutting jobs and revenues fell again in the third-quarter earnings report released Wednesday, with the Nook segment once again taking a particularly large hit: Nook revenues were $157 million for the quarter, down 50.4 percent from a year ago. But the bookseller says it’s making progress on its goal of selling off excess device inventory — and it plans to release a new color device this year.
Overall, B&N saw a small profit — $63.2 million, compared to a loss of $3.68 million last year — but revenues were down 10.3 percent, to $2 billion. Retail store revenues were down 6.3 percent, to $1.4 billion, and college store sales were down 6 percent, to $486 million.
The company laid off or lost 190 Nook employees during the quarter — 26 percent of the Nook team, according to CEO Michael Huseby on the earnings call Wednesday — and about 500 Nook employees remaining in Palo Alto and New York. The company also suggested more cuts are on the way. From the release: “[S]taffing levels in certain areas of the organization have changed, leading to certain job eliminations after the quarter ended. These ongoing efforts may involve additional actions.”
Nonetheless, B&N says Nook losses have “narrowed significantly” because it was able to sell off excess inventory — and, uh, it’s planning to launch another tablet this year.
“The company is actively engaged in discussions with several world-class hardware partners related to device development as well as content packaging and distribution,” Huseby said in a statement. “As a result, we plan to launch a new Nook color device in early fiscal 2015.” The goal is to “reverse the content sales decline.” While Barnes & Noble has been all over the place about its tablet strategy since previous CEO William Lynch’s departure last summer, the launch of a new color device made by a third party would fit with Huseby’s goal of “de-risk[ing] the [Nook] business plan” by decreasing in-house development costs.
In addition, Huseby said, “We expect the soft launch of our higher education digital product before the end of this fiscal year.”
Barnes & Noble broke out Nook’s losses by segment: Device and accessories sales were $100 million for the quarter, down 58.2 percent from a year ago “due to lower unit selling volume and lower average selling prices.” Digital content sales were $57 million, down 26.5 percent from last year. The company attributed these losses in part to the fact that it “did not introduce any new tablet products this past holiday season,” but instead “executed its plan to sell through most of its existing device inventory, while also building additional tablet devices to meet holiday and post-holiday demand, using previously acquired parts and components.”
Huseby, who had been CEO of Nook Media, was appointed CEO of the entire company in January. Prior to that, there had not been one CEO overseeing the entire company since Lynch left in July.
Barnes & Noble’s stock had risen last week based on a proposal from an outfit called G Asset Management to acquire 51 percent of the company. As Publishers Marketplace noted, “This is not an actual bid, or even a formal offer. G Asset appears to have no financing, and SEC records show various G Asset funds having raised only about $3 million over the years.” In the call Wednesday, Huseby said, “We do not consider it to be a proposal worthy of discussion or further action by us.”
This post was updated Wednesday morning with information from the earnings call.