Blog Post

Barnes & Noble’s bad holiday: Nook, store and sales down

As it had warned investors last week, Barnes & Noble (s BKS) announced disappointing holiday sales Thursday. For the nine-week period ending December 29, 2012, Nook device sales, in-store sales and sales were all down from the same period last year. The company adjusted 2013 guidance for Nook Media, its newly formed subsidiary with Microsoft (s MSFT) downward to $3 billion.

This year’s holiday report was notably subdued compared to last year’s, which touted “record Nook sales” (though even then, the Nook Simple Touch e-reader’s sales were so poor that the company adjusted its 2012 guidance downward) and large increases in digital content, retail and store sales.

The Nook segment — which includes devices, digital content and accessories — had revenues of $311 million, down 12.6 percent from last year* and a far cry from the $1.5 billion in comparable sales that CEO William Lynch had expected last year. While digital content sales — ebooks, newsstand, and apps — increased by 13.1 percent (compared to an increase of 113 percent last year), the decline was driven by lower device sales, which Barnes & Noble didn’t break out. However, the company noted that Nook sales declined “due to lower unit volume and average selling prices.” Barnes & Noble launched the Nook in the U.K. this fall, but the company didn’t mention sales performance there.

“Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday,” CEO William Lynch said in a statement. “We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”

Retail sales — consisting of physical stores and — had revenues of $1.2 billion, down 10.9 percent from last year. Barnes & Noble didn’t break out physical stores versus, but said the “decrease was attributable to an 8.2 percent decline in comparable store sales, store closures and lower online sales.” (In the 2011 holiday season, sales were up 43 percent over 2010.) “Core comparable store sales” — which exclude Nook products — fell by 3.1 percent “due to lower bookstore traffic.”

*In the 2011 holiday season, Nook revenues were $448 million, suggesting a steeper drop to $311 million, but a spokesman said the $448 million “included the actual selling price for ebooks sold under the agency model rather than solely the commission received. We ceased reporting on this metric in FY13. This year’s $311 million is solely on the commission received, as are comparisons to last year.”

9 Responses to “Barnes & Noble’s bad holiday: Nook, store and sales down”

  1. David Deaver Brown

    Not mentioned is the steady sales growth of audible, Amazon eBooks, and Apple iBookstore as well as a booming device performance by Apple and Amazon with a dash of Samsung. In a growing market Nook is therefore accelerating towards oblivion. And don’t forget the innovative Amazon lockers showing up in 1500 Staples stores (the # 2! Online retailer at $11B).

  2. I always liked Borders better, and my recent negative experiences at different B&N stores makes me miss them more. At one, I asked for assistance locating a book, gave the clerk the author’s name & she said the computer showed the store should have 2 copies on the shelves. Two people joined her in the search, and I was eventually blown off so they wouldn’t look foolish & disorganized (too late). At another, the periodicals and maps sections are both so unorganized, it’s like a toddler came through & no one fixed the issue. I too have turned to Amazon for nearly all book purchases. Sigh.

  3. Even though my kids both had Nooks we purchased each a new Kindle due to how difficult was to use. We had difficulty managing multiple accounts for the kids, using gift cards, and purchasing books eventually became easier. Amazon however is much easier to use and we were able to link accounts together for easier management so we went that direction.

    • Federal Agent X9

      Anthony, I’m sorry the government got to you. I agree, there’s no way for you to take responsibility for your own critical thinking. By the way, you seem to have read this article okay, despite the big words, so it’s probably time for you to report in to your local Federal Deeducation Center. Please have your thumb ready for print I.D. (That’s the big digit on either hand—but you’ll want to take it out of your mouth first.)

  4. Kristen

    This is because they hardly shelve any books anymore. As an author, I always sent readers to B&N to find my titles because I love that store and they really had their act together. Now I say they’re all available on Amazon.

  5. The decline in e-reader sales can be attributed to the increase in small tablet sales, especially the Kindle Fire HD, iPad mini and Nexus 7. Nook needs to create a tablet that appeals to power users just like the Google Nexus.