The Retail segment, which consists of the Barnes & Noble bookstores and BN.com businesses, had revenues of $996 million for the quarter, decreasing approximately 3% over the prior year due to flat comparable store sales, store closures and lower BN.com sales. During the quarter, the company began to cycle against the favorable impact of the Borders liquidation a year ago. Core comparable bookstore sales, which exclude sales of NOOK products, increased 1.8% for the quarter as compared to the prior year.
Retail earnings before interest, taxes, depreciation and amortization (EBITDA) increased from $14 million to $28 million during the second quarter, a 101% increase, led by a higher mix of higher margin core products. In addition, the quarter also included the reversal of $4.7 million of accrued legal costs recorded in fiscal 2012, resulting from the final settlement of the litigation related to the company’s 2009 acquisition of Barnes & Noble College.
CollegeThe College segment, which consists of the Barnes & Noble College bookstores business, had revenues of $773 million, increasing 0.4% as compared to a year ago, led by new store growth. Comparable College store sales decreased 0.5% for the quarter, as compared to the prior year period. College comparable store sales reflect the retail selling price of a new or used textbook when rented, rather than solely the rental fee received and amortized over the rental period. College EBITDA decreased $5 million during the quarter as compared to a year ago to $88 million, resulting from a higher revenue deferral on increased textbook rental volumes and continued investments in digital education. NOOK The NOOK segment, which consists of the company’s digital business (including Readers, digital content and accessories), had revenues of $160 million for the quarter, increasing 6% as compared to a year ago. Digital content sales increased 38% for the second quarter over the second quarter in the prior year. Digital content sales are defined to include digital books, digital newsstand, and the apps business. The two new NOOK devices, NOOK HD and NOOK HD+, began shipping after the close of the company’s fiscal second quarter, and sales from the launch of those products will be reflected in the current fiscal third quarter and subsequent quarters.
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