EmailBarnes & Noble (BKS $9.92 -3.63) announced digital content sales also grew during the same nine-week period, increasing 113% on a comparable basis. Content sales are defined to include digital books, digital newsstand, and the rapidly growing apps business. The company expects fiscal 2012 digital content sales to be approximately $450 million. By fiscal 2012 year-end, based upon forecasted device sales, the co expects annualized U.S. digital content sales will achieve a run-rate of approximately $700-$750 million. Due to the increased significance of the NOOK business platform, the Company is evaluating its reporting segments.
The evaluation is expected to be complete by the end of this fiscal year, which may result in reporting NOOK as a separate operating segment. In order to capitalize on the rapid growth of the NOOK digital business, and its favorable leadership position in the expanding market for digital content, the Company has decided to pursue strategic exploratory work to separate the NOOK business. The company also said that it is in discussions with strategic partners including publishers, retailers, and technology companies in international markets that may lead to expansion of the NOOK business abroad.
During the nine-week holiday period, Barnes & Noble store sales increased 2.5% over the prior year period to $1.2 billion. Comparable store sales increased 3.4%, on top of a 9.7% increase last year. Barnes & Noble continues to benefit from a consolidating physical book market. The Company benefited from the closure of Borders stores during the holiday season and now expects the sales lift to be in a range of $200 million to $230 million in fiscal 2012. The Company reinvested the Borders upside in its digital business. The company lowered guidance for fiscal year 2012 with an EPS loss of ($1.40)-(1.10) from ($0.50-$0.10) previous guidance, excluding non-recurring items, versus the ($0.55) consensus and revenues of $7.0 billion to $7.2 billion versus $7.4 bln previous guidance versus $7.32 bln Capital IQ Consensus Estimate.
