Barnes & Noble Education Profit Falls 9.6%

Barnes & Noble Education Inc. said its earnings fell 9.6% since bookseller Barnes & Noble Inc. spun off the college business in August.

Shares fell 15% to $10.87 in early trading as the company cut its sales and capital-spending guidance for the current fiscal year that ends in April.

Barnes & Noble Education reported that its comparable sales declined 3% in the three-month period ended Oct. 31, citing negative impacts from student-enrollment trends, especially at two-year community colleges.

Chief Executive Max Roberts said in a news release Tuesday that enrollments in two-year community colleges are down mid-single digits year over year, which resulted in comparable sales in those schools falling by about 7%.

Excluding two-year community colleges, comparable sales fell 1.3%, he added. Such colleges represent 24% of the company's revenue, with the rest coming from state schools, private schools and collegiate superstores.

For the year, the company lowered its comparable sales guidance to between flat and a decline of 2%, from its previous estimate for growth of about 1%. Barnes & Noble Education also cuts its capital spending outlook by $5 million and now projects roughly $50 million.

Overall, Barnes & Noble Education reported a profit of $33.4 million, or 69 cents a share, down from $37 million, or 95 cents a share, a year earlier. Revenue edged up 0.6% to $755.9 million.

Gross margin rose to 23.2% from 23.1%.

Barnes & Noble in February announced plans to separate its college stores, as the bookseller battled steep losses at its Nook digital unit, declining overall revenue amid store closings and ramped up competition from Amazon.com Inc. and other online retailers. After the split, Barnes & Noble kept the consumer stores, online business and Nook unit.

Last week, Barnes & Noble Inc. reported that it swung to a loss and reported a decline in sales in the first full quarter since the split.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

December 08, 2015 10:15 ET (15:15 GMT)

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