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Barnes & Noble, Inc (NYSE:BKS) Shares Jump on Plans to Split Retail

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By on Consumer Staples

Barnes & Noble, Inc(NYSE:BKS) shares leapt in Wednesday’s pre-market session despite a wider-than-expected fiscal Q4 loss from the bookseller, as revenue topped Street expectations and company unveiled plans to separate its retail and NOOK media businesses into two separate companies. The company said its board authorized management to separate the retail and NOOK businesses, and is targeting a completion of the separation by the end of Q1 of calendar 2015. 

“We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” said CEO Michael P. Huseby. “We fully expect that our Retail and NOOK Media businesses will continue to have long-term, successful business relationships with each other after separation.” BKS was up 7.3% at $22.05 in recent pre-market trading, near its 52-week high of $22.41. 

For the 14 weeks ended May 3, 2014, the company posted a net loss of $36.7 million, or $0.72 per share, compared with a net loss of $114.8 million, or $2.04 per share, for the 13 weeks ended April 27, 2013. The average estimate of three analysts polled by Capital IQ was a loss of $0.49 per share. 

Sales rose 3.5% to $1.32 billion, topping the $1.2 billion expected on average by four analysts polled by Capital IQ. Sales rose 0.8% in the retail segment and 18% in the college segment, the company’s two biggest segments. NOOK sales tumbled 22%. 

For fiscal 2015, the company expects retail comparable-bookstore sales and core comparable-bookstore sales to decline in the low-single digits. College comparable-store sales are also expected to decline in the low-single digits. The company expects to continue to narrow its EBITDA losses in the NOOK segment. 

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