Barnes & Noble Reports Q4 Numbers: How Does the Stock Look Now?

Posted Jun 29th 2010 9:00AM by Steven Mallas
Filed under: Earnings Reports, Amazon.com (AMZN)

Barnes & Noble (BKS) disappointed investors when it reported fourth-quarter numbers on Monday after the bell. The stock fell nearly 8% in premarket trading Tuesday.

As far as I'm concerned, that feels like the correct reaction to the story; I certainly would be in no rush to buy the company. The bookseller lost an adjusted 89 cents per share. Analysts were counting on a loss of only 81 cents per share.

Besides missing expectations, same-store sales at the company's regular brick-and-mortar asset decreased over 3% even as comps at its college bookstores experienced an increase of 2.9% during the quarter.

The shares fell below the 52-week low of $15.40. The one-year chart almost seems to imply that, after the next pullback, the stock has a fair shot of rising again.

I don't want to play that game with Barnes & Noble. I don't think the fundamentals are too impressive here, and besides, if you want a retailer that sells books, what about online juggernaut Amazon (AMZN)? I would look at Amazon before I would look at Barnes & Noble. And going back to the preview piece, Trey Thoelcke mentioned concerns over pricing for the Nook, as well as the long-term growth rate.

Yeah, I have to take a pass on this one, even though I do think we may witness a bounce in the stock. It can bounce all it wants; for me, it's simply too risky.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: amazon, AMZN, barnes and noble, BKS, featured, inthenews, retail

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Reader Comments (Page 1 of 1)

6-29-2010 @ 10:25AM

Dan Barnett said...

"The bookseller lost an adjusted 89 cents per share. Analysts were counting on a loss of only 81 cents per share."

ONLY?

The company lost about 5% of it's value THIS QUARTER. Whether 81 or 89 cents is not really material. It's bleeding money. I'll bet that BKS isn't here two years from now. Amazon or Netflicks is a much better bet; 'cause right now BKS looks about as safe as getting that $38 million from the widow of Mobutu of Zaire.