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. With a recession threatening, Borders faltering, and some even suggesting a merger between the two big book chains, 2008 is shaping up to be a rocky year for the book retailers.Barnes & Noble’s fourth quarter (which ended on February 2nd) was slightly worse than what analysts had expected, but the stock hasn’t been punished on Wall Street. Here are the highlights from CFO Joseph J. Lombardi from the March 20th, Q4 conference call (courtesy Seeking Alpha):”Fiction and the genres had a strong quarter, especially graphic novels and romance. Hardcover sales were driven by a host of familiar names, including Sue Grafton, Dean Koontz, Ken Follett, Stephen King, and a holdover from the spring, Khaled Hosseini’s A Thousand Splendid Suns.”“Both John Grisham and James Patterson had two bestsellers; Grisham with Playing with Pizza and The Appeal, and Patterson with Quickie and Double Cross. Trade paper fiction was driven primarily by movie tie-ins and selections from Oprah Winfrey. Movie tie-ins included The Kite Runner, Atonement, and I Am Legend, and the Oprah recommendations for Pillars of the Earth and Love in the Time of Cholera drove the sales of those titles.” Pretty amazing that Grisham’s The Appeal was a bestseller when it came out only five days before the quarter ended. Meanwhile, Oprah continues to move books.“In non-fiction, areas of strength included biography, humor, health and diet books, as well as the continuing success of Rhonda Byrne’s The Secret. Other key hardcover titles included Stephen Colbert’s I Am America, Tom Brokaw’s Boom!, The Dangerous Book for Boys and its sequel, The Daring Book for Girls, and Michael Pollan’s In Defense of Food. Non-fiction movie tie-ins also included in non-fiction were Into The Wild and Charlie Wilson’s War.” The continued success of The Secret is somewhat disheartening.Aggressive discounts associated with Barnes & Noble’s membership programs continue to eat into the chain’s gross margins, but interestingly, so did “bestseller markdowns associated with the seventh and final Harry Potter book,” though to a lesser extent.In 2008, Barnes & Noble expects to face a double whammy of “recessionary pressures in this uncertain economic environment” and very challenging comparisons against the final Harry Potter book and improved hardcover sales last year.
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.