Barnes & Noble Q1 results show revenues up but flat Nook performance

Barnes & Noble reported Q1 financial figures today, and the outlook is mixed to say the least. Here are the headline details:

• Revenues were up slightly to $1.45bn, though this was slightly below analysts’ expectations of $1.48bn.

• The company reported a net loss of $41m for the quarter, which was a fair improvement over last year’s $57m.

• The Nook’s performance was flat, despite the launches of new Nook Tablet and front-lit Nook eReader devices.

Investors were generally satisfied with the results, and the company’s shares were up 3.6% in pre-hours trading. But when you look deeper, these aren’t the best figures and there are still a number of areas that cause concern. Put simply, B&N seems to be plodding along at a time when it should really be improving much faster.

Nook sales were arguably the most disappointing area. Including devices, accessories and digital content, sales were at $192m for the quarter, barely up from $191m last year. Considering the growth of the ebook market and the launch of various new devices, it’s hard to see those figures as anything other than a disappointment. New opportunities should spur growth, rather than simply shoring up last year’s figures. CEO William Lynch has described issues surrounding the Nook range as a “missed opportunity,” suggesting that he believes there’s still plenty of room for improvement.

B&N’s actual book sales were boosted by the success of titles such as the Fifty Shades of Grey series, but overall there’s a general sense of malaise. Meanwhile, the company continues to refer to the possibilities offered by its Newco operation with Microsoft, while remaining maddeningly vague on the details. If the Newco operation delivers as it should, B&N should be looking a lot better towards the end of the year. Otherwise, it’s a generally flat picture of a company that’s doing okay, but which doesn’t seem to be exploiting the market to its fullest potential.