The Borders Group on Wednesday (Nov. 15) reported a $14.1 million net loss, or 20 cents per share, on sales of $840 million for the company's fiscal third quarter, ended Oct. 22.

The Borders Group on Wednesday (Nov. 15) reported a $14.1 million net loss, or 20 cents per share, on sales of $840 million for the company's fiscal third quarter, ended Oct. 22.

That compares with a loss of $1.1 million, or one cent per share, on sales of $838.6 million that the company produced last year in the corresponding period.

The company attributed the loss to lower than expected sales across all business segments, except books, and the cost of strategic investments.

During the quarter, U.S. superstores experienced a 0.2% comparable-store decline while Waldenbooks were down 5.2%. Also impacting profitability, gross margin declined to 23.8% of sales from 25.6% in the corresponding period in the prior year. Also, selling, general and administrative expenses increased to 25.9% from 25.3%.

While sales were weak in most product lines, the company pointed out that book sales were solid, up 3% on a comparable-store basis in U.S. superstores. Book sales strength was in backlist titles. Music sales, however, declined by 15% on a comparable-store basis.

The company took a 2 cent per share after-tax charge, writing off costs and accelerated depreciation related to store remodels. During the quarter, the company remodeled 55 superstores, for a total of 100 locations during the year. Those stores outperformed the rest of the chain by a 2% comparable-store gain, the company reported.

"As we look forward, with this year's remodel activities behind us, a solid inventory position in our stores and a promotional program in place, we are prepared for the upcoming holiday season," Borders Group CEO Greg Josefowicz said in a statement.

The company announced its results after the close of trading yesterday. The stock closed at $19.70, down 64 cents from the previous day close.

Questions? Comments? Let us know: @billboardbiz

Print