Financial Trading Blog
Stock of the day 22/06/2016 – Barnes & Noble Inc
Barnes & Nobles had a horrorshow end to 2015; revealing that its long-term debt had tripled to $192 million in the space of a year the company plunged over 20% in early December, causing the stock to hit lows not seen since the mid-2011. The start of 2016 saw it continue its decline, at one point dipping to $7.43 at the start of February.
(Source: IT-Finance.com 22/06/2016)
From that nadir things did begin to improve for Barnes & Noble, its rise seemingly sparked by the company’s third quarter update at the start of March. A 12.5% fall in online sales across Q3 (an improvement on the 22% plunge seen in the previous quarter) was joined by a 1.2% drop in general retail sales to $1.379 billion and a 33.3% fall in sales from the company’s ostensible Kindle-rival Nook. Yet a 0.2% increase in like-for-like sales across the quarter alongside the decision to shut down its Nook App Store restored a bit of investor confidence in Barnes & Noble, sending the stock to $12.20, a level not seen since its December decline.
However Barnes & Noble struggled to capitalise on that post-update momentum after the initial surge. Hovering above $12 for the rest of March and most of April the stock started to slip at the end of the latter month as CEO and founder Leonard Riggio would be retiring in September. Accelerating losses across the fortnight of May eventually saw the stock dip to a 2 and a half month low of $10.44, though since then Barnes & Noble has seen a slight recovery, sitting at a current trading price of $11.23 (IT-Finance.com, 22/06/2016).
In terms of Barnes & Noble’s fourth quarter figures things look set to be rather mixed. On the positive side analysts are expecting the bookseller to shrink its losses from 37 cents to 26 cents per share year-on-year; however, revenue-wise the company is forecast to see a 26% slide in revenue from the $1.2 billion seen in Q4 2015 to $889.2 million for the past quarter.
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