NEW YORK - Barnes & Noble Inc. warned that "recessionary pressures" will make 2008 an especially challenging year and said its earnings per share would be well below what analysts were expecting.
Barnes & Noble stock falls 4.7%
A drop in after-hours trading came after the bookseller warns that 'recessionary pressures' will affect '08 profits.
The company, one of the world's largest booksellers, said post-holiday sales trends continued into the first quarter of 2008. Shares fell 4.7 percent in after-hours trading.
"The bookselling environment remains very competitive," the New York-based company said in a press release.
The company said it expects fourth-quarter earnings per share between $1.76 and $1.82, including 10 cents per share in benefits from property insurance and litigation settlements.
Previously, the company had predicted quarterly earnings of $1.57 to $1.76 per share.
Excluding the benefits, Barnes and Noble said its profit would be in the middle of the previous range, or about $1.67 per share.
Analysts polled by Thomson First Call expect earnings per share of $1.71. Analyst estimates typically exclude one-time charges and gains.
For the year, the company predicted profit of $1.99 to $2.05 per share, including 9 cents per share in one-time benefits.
Previously, the company expected earnings of $1.81 to $1.99 per share.
Excluding the gains, the company said it would earn about $1.90 per share. Analysts expect 2007 earnings of $1.88 per share.
The new guidance was based on fourth-quarter store sales growth of 3 percent to $1.5 million and full-year sales growth of 4 percent to $4.6 million. The company said its same-store sales, or sales at stores open at least a year, fell 0.5 percent in the quarter but rose 1.8 percent for the year.
Same-store sales is a key indicator of retailer performance because it measures growth at existing locations rather than newly opened ones.
The company said it is also facing difficult sales comparisons against last year's final Harry Potter series release.
Barnes & Noble shares rose 21 cents to close at $28.33 Monday, but dropped $1.33 in after-hours trading.
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