Booksellers’ Earnings Picture Is Mixed

Barnes & Noble Inc., the largest U.S. bookseller, said Thursday that fourth-quarter earnings rose 6.4% on strong holiday sales. Profit at rival Borders Group Inc. fell 3% because of discounts.

Net income at Barnes & Noble increased to $123 million, or $1.76 a share. Fourth-quarter earnings at Borders, the second-largest U.S. book retailer, declined to $119.1 million. Borders per-share profit climbed to $1.78 on share repurchases.

Both chains increased sales on demand for bestselling fantasy titles including J.K. Rowling’s “Harry Potter and the Goblet of Fire” and C.S. Lewis’ “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe.” Barnes & Noble said revenue rose 4.8%, and Borders said its sales climbed 6.4%.

Shares of New York-based Barnes & Noble had their biggest gain in more than three years after the company forecast profit for this fiscal year above analysts’ estimates. The stock rose $4.18, or 9.7%, to $47.40.

Shares of Ann Arbor, Mich.-based Borders gained 59 cents, or 2.5%, to $24.62.

Same-store sales, a key measure of retail health, increased 3.3% at Barnes & Noble stores and 3.8% at its B. Dalton chain as holiday sales got a boost from children’s books and movie tie-ins. Chief Executive Stephen Riggio has increased revenue for two years.

Barnes & Noble said earnings this year might rise to as much as $2.30 a share, 5 cents more than the consensus estimate in a survey of analysts by Thomson Financial. It forecast that fiscal first-quarter earnings would be as much as 14 cents a share.

At Borders, sales at U.S. superstores open at least a year rose 2.5%. Same-store sales in the international unit gained 0.9%, the company said.

Profit was hurt as Borders boosted discounts and spent $2.7 million more on interest to finance buybacks and capital expenditures. The company is remodeling stores and trimming space devoted to selling music.