- CFO Joseph Lombardi is cautious but guardedly optimistic about sales in the all-important fourth quarter, saying that “the hardcover book business has improved” but there have been “some recent mixed retail sales reports.”
- Following a slow second quarter, the third quarter saw a turnaround in sales. CEO Steve Riggio said that the increase in sales began with Bob Dylan’s new CD, Modern Times.
- Diane Setterfield’s The 13th Tale was “one of the most successful new hardcovers… The wonderful ghostly tale was our number one bestseller the first day it went on sale, and the book went on to break all previous Barnes & Noble sales records for a first-time novelist. Almost 60 days after publication, the book is still one of our top-selling titles, due to its word-of-mouth appeal.”
- Fiction bestsellers for the quarter were Mitch Albom’s For One More Day, Stephen King’s Lisey’s Story, Nicholas Sparks’ Dear John, David Baldacci’s The Collectors, and “rising fiction star” Vince Flynn’s Act of Treason.
- On the nonfiction side, the bestsellers were John Grisham’s The Innocent Man, Bob Woodward’s State of Denial, Nora Ephron’s I Feel Bad About My Neck, and Richard Dawkin’s The God Delusion
- Looking at the fourth quarter, “Among the season’s best gift books, the standout is clearly Annie Leibovitz’s A Photographer’s Life, but Martha Stewart’s Homekeeping Handbook is off to a great start, as is the magnificent coffee table book called Rainforest.”
- In October, Barnes & Noble upped its discounts for shoppers who belong to its member program. The company expects this to help sales, but its inability to say just how the numbers might work out made investors nervous, the issue being that this plan could put a serious dent in the bookseller’s profit margin.
- Having said that, Barnes & Noble also noted that “margins continue to benefit from lower purchasing from book wholesalers, increased sales of our own publications, and an overall more efficient supply chain.” – i.e. those books published by Barnes & Noble are quite lucrative for the company.
As we have every quarter for the last several, we’re looking at Barnes & Noble’s recent quarterly report to gauge the trends that are impacting the book industry – which books were big over the last few months and what’s expected for the months ahead.
Sales dipped by -5% from a year ago for the quarter ended August 1st, consistent with the declines seen in prior quarters. “Store traffic was down throughout the quarter,” according to CFO Joseph Lombardi.
As has been the case as the company has focused more on the tough economy and other aspects of the business, there wasn’t much discussion of individual titles this year.
What follows are insights gleaned from Lombardi and Barnes and Noble CEO Steve Riggio’s comments on the conference call discussing Q1 results.
Lombardi pointed out that the same quarter a year ago had big sellers in Stephanie Meyers The Host, Barbara Walters Audition, and Randy Pausch’s The Last Lecture, while sales from “bestsellers were lower this year.”
According to Lombardi, “the fall lineup looks fairly strong, with Dan Brown’s The Lost Symbol being the big third quarter title.”
Barnes and Noble is pushing hard to get on the ebook bandwagon. Riggio said, “The most important development of the quarter was the launch of our e-bookstore on July 20th,” adding that the company had the “top two most downloaded apps in the iTunes store… our e-reader app, which continues to be the number one book app, and the Barnes & Noble bookstore app, which enables customers to browse, search, and snap photos of… covers of products and to buy them with ease.”
Riggio also outlined efforts to get more titles into the e-bookstore, along with a selection of newspapers and magazines, the unmentioned target being the Amazon Kindle store which has surged to a big lead in offering a large number of titles.
Every three months I’ve been looking at Barnes & Noble’s quarterly conference call to get some insight into recent book industry trends and to see which books were the big sellers over the past few months and which are expected to be big in the coming months. Barnes & Noble’s second quarter ended August 4th. Almost certainly, it’ll be the last time that the bookstore chain will experience the rush of sales generated by Harry Potter, and the company made the most of it, riding the Boy Wizard to results that came in at the high end of its forecast and meeting Wall Street estimates that had been padded with high expectations for the final Potter installment. With Potter coming out late in the quarter, however, the vaunted “Potter effect” was only in play for the final two weeks of the period.Here are the highlights from CEO Steve Riggio on the Q2 conference call (courtesy Seeking Alpha):Harry Potter drove sales higher but knocked Barnes & Noble’s profit margin lower thanks to “significant discounting.” The book was marked down 40% instead of the usual 30%.More Harry – selling well but tailing off: “The book sold even better than our expectations in its first days on sale, but in the following weeks, sales of the book tailed off quite a bit, as it was available in abundant quantity in a large number of mass merchants and non-book store retailers. Nevertheless, Harry Potter and the Deathly Hallows continues to sell well. It remains our number one best selling hard cover title, and we expect to sell hundreds of thousands of copies through the end of the year.”But perhaps the Potter party isn’t over yet: “We believe that sales of the entire series are going to continue to dominate children’s bestseller lists for many, many years. While the Harry Potter cycle may be complete for those who have read the entire series, it is yet to be discovered by millions of readers now and in the years ahead.”Moving beyond Potter, Barnes & Noble saw “a mix of expected bestsellers from brand name writers and the emergence of a few sleepers.” The expected: Khaled Hosseini’s A Thousand Splendid Suns, Janet Evanovich’s Lean Mean Thirteen and James Patterson’s two books, The Quickie and The 6th Target. The sleepers: Conn and Hal Iggulden’s The Dangerous Book for Boys. Thomas Cathcart’s Plato and A Platypus Walked Into a Bar, Denise Jackson’s It’s All About Him, and Elin Hilderbrand’s Barefoot. The fourth Barnes & Noble Recommends selection, Paulette Giles’ Stormy Weather also saw “strong sales.”Riggio also mentioned a recently published book, Eclipse by Stephenie Meyer. Apparently vampires never go out of style because according to Riggio, the book has “catapulted Stephanie Meyer into the ranks of mega bestselling authors. It outsold Harry Potter, toppled it from the bestseller list and it actually became the fastest-selling teen novel in our history.”And finally, Riggio previewed third quarter releases that are expected to be big: Bill Clinton’s Giving, Alan Greenspan’s The Age of Turbulence, the late David Halberstam’s final book, The Coldest Winter, John Grisham’s Playing for Pizza, Alice Sebold’s The Almost Moon, and the tie-in book for the Ken Burns WWII PBS documentary airing this fall.
I was reading about the recent second-quarter earnings report for Barnes & Noble as part of my day job and I realized how much insight the company’s quarterly conference call provides in terms of current trends in the book industry, as well as which books will be are most likely to be the headline-grabbing titles over the next few months. I may do this each quarter from now on, as I think it’s an interesting proxy for what’s going on in the book industry at a given point in time.The big trend so far this year is a lack of blockbuster titles as compared to years past. From Steve Riggio, Barnes & Noble CEO, on the Q2 conference call (courtesy Seeking Alpha):We look back at the first half of this year as one of the softest periods in recent memory for the book industry in terms of hardcover new releases. There were simply very few new hardcover books that generated media buzz or sustained sales by word-of-mouth recommendations.The lack of blockbusters is thrown into particularly stark light when compared to a year ago, when Harry Potter and the Half-Blood Prince came out. Overall, sales were actually down from last year.Riggio called The Memory Keeper’s Daughter by Kim Edwards “one of the fastest-selling trade paperbacks in our history.”Barnes & Noble also looked ahead to the books that they anticipate will be big in the third quarter of this year. In fiction, Frederick Forsyth, Anna Quinlan, Robert Harris, David Baldacci, Janet Evanovich, and Robert Parker have new books on the way. The company also singled out Mitch Albom’s For One More Day (Riggio said that Albom’s previous book, The Five People You Meet in Heaven, “was the second-largest selling fiction book in our history”) and Charles Frazier’s 13 Moons, while The Thirteenth Tale by Diane Setterfield and The Interpretation of Murder by Jed Rubenfeld “are getting a lot of buzz.”In non-fiction, Barnes & Noble is anticipating big sales from Faith and Politics by Senator John Danforth, The Greatest Story Ever Sold: The Decline and Fall of Truth from 9/11 to Katrina by Frank Rich, Never Again: Securing America and Restoring Justice by John Ashcroft, The Confession by James McGreevey and Inside Bush’s White House, the Second Term by Bob Woodward “continuing his take on the Bush administration and the war.” Riggio also called John Grisham’s first non-fiction book, The Innocent Man: Murder and Injustice in a Small Town, “one of the most eagerly-awaited books we have seen in a very long time.”The company also highlighted several upcoming biographies and memoirs: Bob Newhart, Sandy Weil, Carly Fiorina, Ellen Burstyn and David Crosby. There’s also a “major new biography” on Andrew Carnegie and “the definitive book” on U2.Riggio said it “looks like a very strong season for cookbooks,” with the 75th edition of the Joy of Cooking, a new edition of The Bon Apetit Cookbook and new titles from Paula Dean, Rachel Ray, Emeril Lagasse and the Barefoot Contessa.
As we have every quarter for the last several, we’re looking at Barnes & Noble’s recent quarterly report to gauge the trends that are impacting the book industry – which books were big over the last few months and what’s expected for the months ahead.This quarter has been rather dramatic for the big chains. In March, Borders took an emergency cash infusion (with many strings attached) from a large hedge fund shareholder just to stay afloat. This came on the heels of a new strategy initiative from the chain, which we dubbed “The Froot Loop Gambit,” leading to some great discussion and a follow-up post about “knowledge products.” Two months on, Borders is out of the woods for the short term, but appears unlikely to survive as a standalone company in the long term. Right now, most are speculating that Borders will be swallowed up by Barnes and Noble.As such, our regular look at Barnes and Noble quarterly updates may offer an even broader view of the book industry as soon as next quarter. Interesting times. In the meantime, what follows are insights gleaned from Barnes and Noble CEO Steve Riggio’s comments on the quarterly conference call for the quarter ended May 5th. (Transcript provided by Seeking Alpha.) Interestingly, this quarter was much lighter on the discussion of individual books that have done well recently or that are expected to do well in current and future quarters. It’s hard to know what to make of this change in tone other than the fact that there appears to be paucity of blockbusters this year compared to the Potter-mania, political memoirs, and self-help tomes that fueled sales in 2007.First quarter numbers compared unfavorably to a year ago when Oprah-backed positive thinking pablum The Secret was a massive seller.Looking ahead, the second quarter will face very tough comparisons to Q2 2007 thanks to the huge sales of Harry Potter a year ago. “the quarter should end with some excitement with the publication of Breaking Dawn by Stephanie Meyer and we think that’s the most anticipated book of this year, if not actually in a couple of years. Even though it’s a teen book, it has wide appeal.”April was difficult but May started out better: “We had a number of big books in the first couple weeks, including Barbara Walters’ Audition, the Stephanie Meyer adult fiction book The Host and the continued strength of the Last Lecture.”As for Riggio’s answer to the Borders question: “We’ve put together a team of senior management people and financial advisors to study the feasibility of a transaction with Borders. We’ll provide no further comments about any discussions we may or may not have.”
Every three months I’ve been looking at Barnes & Noble’s quarterly conference call to get some insight into recent book industry trends and to see which books the retailer expects to be “big” in the coming months. Here are the highlights from CEO Steve Riggio on the Q4 conference call (courtesy Seeking Alpha):One of the big stories for book retailers this year was a lack of blockbuster titles to get shoppers into stores. “It was a year that produced two titles that garnered significant media attention. But while the lack of traffic producing new releases didn’t help our top line, what’s important is that our core booklist was solid.” I’m not sure which titles he’s referring to there – which says something about last year’s lack of blockbusters – but I’m guessing one of them was Barack Obama’s The Audacity of Hope.Riggio also noted how customer loyalty programs have made for “a vastly different environment than just three years ago,” and he alluded specifically to Amazon Prime, the online retailer’s popular shipping offer.Riggio said the chain has high expectations for new books by Lisa Scottoline (Daddy’s Girl), Jonathan Kellerman (Obsession), Mary Higgins-Clark (I Heard That Song Before), David Baldacci (Simple Genius), Michael Chabon (The Yiddish Policemen’s Union), and Khaled Hosseini’s follow-up to Kite Runner, A Thousand Splendid Suns.”The Oprah effect on books continues.” Oprah helped make YOU: On A Diet, Bob Greene’s Best Life Diet, and The Measure of a Man by Sidney Poitier. But the really big seller – much to the chagrin of many – was The Secret by Ronda Burn, which Riggio called “probably one of the fastest non-fiction selling books we’ve had in recent memory.”B&N is also looking forward to some new non-fiction titles: Einstein by Walter Isaacson, Where Have All the Leaders Gone? by Lee Iococca, Animal, Vegetable, Miracle: A Year of Food Life by Barbara Kingsolver, and Paula Dean’s memoir, It Ain’t All About the Cooking.Finally, “we are just beginning to see a wave of books about politics and those related to the 2008 Presidential election at this time and by far, Barak Obama’s The Audacity of Hope leads the pack.”Previously: Barnes & Noble’s third quarter.