Barnes & Noble‘s (BKS) latest earnings weren’t good, with an 18 cents a share loss and a 10% fall in overall revenue spurred by a 26% drop in revenue at its Nook business. But while the stock fell immediately after the results, it’s currently up about 7.5%.
Part of that may be because there’s one part of the business that’s seemingly holding up: Retail stores. While retail sales fell 10%, the unit’s Ebitda rose 7.3%, notes WSJ DealJournal’s David Benoit. As David remarks, no wonder Chairman Leonard Riggio wants to buy the retail business and exclude the Nook part.
But as this Reuters brief notes, the company said today that 95% of its stores are profitable and it doesn’t plan for any closings. Back to David:
Gross margin at that unit rose to 33.2% from 30.9%, as Barnes and Noble cut costs in retail. And even the retail sales were hurt by the Nook. Same-store sales in the unit fell 7.3%, but a metric without the Nook dropped only 2.2%.
The board reiterated Thursday that it has formed a special committee to evaluate his proposal and said it�wouldn�t�comment further until there is news. Riggio may want to move fast.
In the latest quarter, the retail unit’s Ebitda was $212 million, while the entire company’s enterprise value is $1.45 billion, even including today’s rise. It could well be that the expectation of an imminent sale coupled with realizing the retail unit is doing rather well is what’s boosting the stock’s price — suggesting as it does that Riggio will have to pay a fairly hearty sum for the business.
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