Barnes & Noble
shares rose 10% after the company posted a solid fourth quarter and issued strong guidance.
The New York-based bookseller earned $123 million, or $1.80 a share, in the quarter, compared with $115.6 million, or $1.60 a share, a year ago. Adjusted for a charge, earnings were $1.90 a share in the most recent quarter. Analysts surveyed by Thomson First Call were expecting earnings of $1.80 a share in the most recent quarter.
Fourth-quarter revenue rose 5.9% from a year ago to $1.8 billion. Analysts were expecting revenue of $1.7 billion in the most recent quarter.
For the first quarter and full year 2006, the company expects comparable store sales to increase in the low single digits.
The company expects first-quarter 2006 earnings of 10 cents a share to 14 cents a share and full year 2006 earnings of $2.20 cents a share to $2.30 a share, including expenses of 9 cents a share related to the conversion and transition plan for the company's new distribution center. The guidance includes stock compensation expense charge of 4 cents a share in the first quarter and 15 cents a share for the full year. Analysts were expecting earnings of 11 cents a share for the quarter and $2 a share for 2006.
Strong expense controls and expanding gross margins drove record earnings," the company said. "Our comparable stores sales grew 2.9% for the year without any advertising expenditures or additional coupon promotions. Tight management of inventories helped produce record operating cash flows, which we used to increase shareholder value by repurchasing shares and by initiating a quarterly dividend to stockholders."
Fourth-quarter gross profit rose 5.9% to $577.8 million. Gross margin remained flat at 33%. Operating profit rose 5.4% to $214.6 million. Operating margin remained flat at 12.2%.
Barnes and Noble store sales increased 6.0% from a year ago to $1.4 billion, with comparable store sales increasing 3.3% for the quarter. B.Dalton sales decreased 18% from a year ago to $50.1 million, due to store closings.
Comparable store sales at B. Dalton increased 3.8% for the quarter. Sales at Barnes and Noble.com increased 1% from a year ago to $152.6 million.
The stock jumped $4.52 to $47.74.
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