Borders Sees Deeper Loss

Borders Group(BGP), hurt by sagging sales across all of its store formats, warned that its third-quarter loss will be deeper than expected and withdrew its guidance for the rest of the year.

The book retailer now expects a third-quarter loss of 16 cents to 20 cents a share, wider than the loss of 8 cents to 12 cents a share it previously projected. The forecast includes 2 cents to 3 cents a share in charges. Analysts polled by Thomson First Call currently predict a loss of 10 cents a share for the quarter ending Oct. 22.

For the quarter to date, same-store sales have dropped 0.7% at Borders' namesake chain and 5.4% at the company's Waldenbooks division. The Ann Arbor, Mich., company had previously projected that comp sales would be flat to up slightly at Borders superstores, with Waldenbooks same-store sales expected to be flat to down in the low single-digit percentage.

International sales have risen 5.8%, a slower rate than the company's forecast of 9% to 12%. Borders attributed the shortfall to weak results in the U.K., where same-store sales are down in the midsingle digits.

In August, Borders projected fourth-quarter earnings per share of $1.80 to $1.90, including anticipated costs of roughly 4 cents. For the full year, Borders predicted a profit of $1.60 to $1.70 a share, with charges of 9 cents to 11 cents. Analysts, on average, project fourth-quarter and full-year earnings per share of $1.81 and $1.63, respectively.

Borders said it would update its fourth-quarter and full-year outlook when it reports its full third-quarter results Nov. 15.

Borders' shares recently dropped 6.6%, or $1.39, in after-hours trading to $19.70.

>To order reprints of this article, click here: Reprints