Although the Borders Group will hit its fiscal fourth-quarter company guidance by posting earnings per share in the range of $1.61-$1.62 on total sales of $1.37 million, the company said it was disapp
Although the Borders Group will hit its fiscal fourth-quarter company guidance by posting earnings per share in the range of $1.61-$1.62 on total sales of $1.37 million, the company said it was disappointed in music sales and will reduce the category in its stores.
In a conference call with Wall Street analysts this morning (Feb. 9), Borders chairman/president/CEO Gregory P. Josefowicz said the chain's music sales declined in the fourth quarter, which ended Jan. 23, and all of last year, even though overall music industry sales were up. "We were behind the music industry, and that's because of the kind of music we sell," he said.
The company expects a further decline in music sales this year, which is why "we will continue to reduce music in our stores," senior VP/CFO Edward W. Wilhelm said.
In fact, the reduction in music will be accelerated as the company remodels superstores this year, he said.
Multimedia was up slightly in the fourth quarter, with strong DVD sales offsetting the music declines, Josefowicz said. In contrast, he said, "we feel encouraged" by a 2% comparable-store increase in books, outperforming the overall book market.
Borders expectes profits this year to be up 8% from 2003's $1.50 per share. Meanwhile, overall fourth-quarter sales were up 4.3%.
Borders shares dropped 29 cents to $36.01 in mid-day trading.