Barnes & Noble posts weak earnings; Nook division’s sales off 26%

Barnes & Noble said sales at its Nook e-reader and digital-book unit, often touted as the company’s best hope for the future, tanked 26% during the crucial holiday quarter as the bookstore giant experienced weakness across all its categories.

A decline in the number of Nook devices sold during the company’s fiscal third quarter, which ended Jan. 26, compelled Barnes & Noble on Thursday to announce a cost reduction program in the division as well as plans to cut e-reader prices.

Barnes & Noble owns 78% of the Nook unit, with Microsoft and Pearson. The segment’s losses more than doubled to $190 million in the quarter from $83 million during the same period a year earlier.

Digital content sales, however, were a bright spot, rising 6.8%.

Overall, the nation’s largest bookstore company had a rough quarter, with total revenue down 8.8% to $2.2 billion. Earnings before interest, taxes and some non-cash costs -- known as EBITDA -- tumbled 63% to $55 million from $150 million a year earlier.

The company recorded a net loss of $6.1 million, or 18 cents a share, compared to its year-earlier profit of $52 million, or 71 cents a share.

The retail unit, which includes Barnes & Noble bookstores and BN.com, saw sales dive 10.3% to $1.5 billion amid store closures and lower online sales. But the segment’s EBITDA rose 7.3% to $212 million due to better expense management and higher margin products.

On Monday, Barnes & Noble Chairman Leonard Riggio said he was mulling a buyout of the retail side of the company.

Barnes & Noble’s college bookstore division also slumped during the quarter, with revenue sliding 1.6%.

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