Online bookseller Barnesandnoble.com (Nasdaq: BNBN) said Thursday that it reduced losses in its second-quarter 2001 results — narrowly beating Wall Street estimates — and that the company increased sales despite a pullback in marketing and promotional spending.
“We are very pleased with the significant decline in our operating losses,” said Barnesandnoble.com vice chairman Steve Riggio. “The across-the-board reduction in operating expenses, both in absolute dollars and as a percentage of sales, is a trend we expect to continue as we drive to profitability and growth.”
Barnesandnoble.com, which is majority owned by its brick-and-mortar namesake Barnes & Noble and German media giant Bertelsmann AG, said its pro forma net loss for the quarter ended June 30 was US$31.4 million, or 20 cents per share.
Analysts surveyed by First Call/Thomson Financial had estimated a net loss of 21 cents per share.
The Q2 2001 loss represented a 37 percent improvement from the $49.7 million pro forma net loss (31 cents per share) that Barnesandnoble.com registered in the year-ago quarter. Barnesandnoble.com’s loss for Q1 2001 was $33.7 million, or 21 cents per share.
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Despite the industry-wide slowdown in online book sales that took hold earlier this year, Barnesandnoble.com said its core consumer business registered 8 percent year-over-year growth. By comparison, chief competitor Amazon.com (Nasdaq: AMZN) reported July 23rd that its core books, music and video category grew 1 percent during its second quarter.
Barnesandnoble.com said it was able to achieve the results despite a 44 percent decline in its marketing spending and a “dramatic” pullback in promotional discount offers.
One of the e-tailer’s most prominent promotional campaigns this year has been a free shipping offer to customers on orders of two or more items to U.S. locations. The initiative, which was launched in response to a similar move by Amazon, is still in effect.
Amazon’s free shipping offer, however, abruptly ended earlier this month after generating significant consumer backlash because Amazon simultaneously raised prices on certain products.
New York City-based Barnesandnoble.com’s net sales for the second quarter hit $83.7 million, inching up 2.9 percent from the $81.4 million in sales it racked up in the year-ago period.
Barnesandnoble.com acquired more than 670,000 new customers during the quarter, bringing its total customer count to more than 9.6 million.
Riggio said that Barnes & Noble.com remains the top shopping destination of brick-and-mortar businesses, “evidence of the power of the Barnes & Noble brand and our multichannel strategy.” However, the company did note that sales from its consumer business were dragged down by weaker-than-anticipated sales in its corporate bookselling business.
Barnesandnoble.com attributed the decline to an overall curtailment of expenditures by some of its major customers, primarily technology companies.
Looking ahead, the company forecast third-quarter net sales will fall between $95 million and $105 million, resulting in a pro forma net loss of 19 cents to 23 cents per share. By comparison, the online book seller reported sales of $91 million and a loss of 28 cents per share during the third quarter of 2000.
It also left the full year outlook unchanged, with projected sales to be in the range of $420 million to $475 million and a loss of 75 cents to 85 cents per share.
Barnesandnoble.com said it entered the third quarter with no debt and $134.7 million in cash and marketable securities. Going into the second quarter, Barnesandnoble.com reported that it had $174.5 million.
The company stock opened Friday at $1.30 per share, down a penny from Thursday. Three months ago, Barnesandnoble.com closed at $2.38.