For the quarter, ended Jan. 26, the company reported a loss of $6.1 million compared with earnings of $52 million in the prior year. Revenue decreased 8.8% to $2.22 billion. Shares also saw a decrease, with net losses at $0.18 per share as compared to net earnings of $0.71 per share a year ago.
The struggling Nook segment losses were $190 million for the third quarter, as compared to $83 million a year ago, primarily resulting from sales shortfall, inventory charges, and higher operating expenses, Barnes and Noble claims. The company also recorded $21 million of incremental channel partner returns given the holiday sales shortfall, as well as $15 million of promotional allowances to optimize future sales opportunities.
“In terms of the NOOK Media business, we’ve taken significant actions to begin to right size our cost structure in the NOOK segment, while also taking a large markdown on NOOK devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters,” said William Lynch, Chief Executive Officer of Barnes & Noble. “NOOK Media has been financing itself since October of 2012 due to the strong investment partners we’ve been able to attract in Microsoft and Pearson. Coming off the holiday shortfall, we’re in the process of making some adjustments to our strategy as we continue to pursue the exciting growth opportunities ahead for us in the consumer and digital education content markets.”
Mr. Lynch also said that going forward NOOK Media still remains committed to its Tablet and e-Reader business. And, he reiterated that NOOK and Barnes & Noble bookstores will continue to have a close relationship, countering news earlier this week that the company could shutter the Nook division.
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