ANN ARBOR, Mich., Aug. 24, 2001 -- Borders Group, Inc., (NYSE: BGP)
today reported results for the second quarter of 2001, which ended July 29.
Consolidated earnings per share were break even, which beat the company`s
previous guidance of a $.01 loss per share projected for the quarter. Total
sales within the Borders segment were in line with expectations at $511.1
million for the second quarter, a 10.1% gain and a comparable store sales
increase of 2.0%. Net income for the Borders segment was $8.4 million for the
quarter, up 25.4% over second quarter 2000.
"A consistent program of building on the strength of our core business
while exercising strong expense discipline will help Borders Group deliver
solid sales and earnings growth for 2001," said Greg Josefowicz, president and
chief executive officer of Borders Group.
Consolidated Results
Consolidated sales, including the Borders segment, International and
Waldenbooks, were $739.8 million, an increase of 5.9% for the quarter compared
to 2000. Income from continuing operations was $0.1 million, which is up
compared to the break even from the same period last year. Gross margin for
the second quarter was 25.2% compared to 25.8% last year as anticipated,
primarily reflecting higher occupancy costs as a percent of sales. SG&A as a
percent of sales improved to 24.3% compared with 25.1% the year prior due to
strong expense control across all segments.
Borders
Second-quarter sales in the Borders segment increased by 10.1% over last
year to $511.1 million. Net income was $8.4 million, compared to $6.7 million
one year ago, an increase of 25.4%. At 2.0%, comparable store sales in
Borders superstores were in line with the company`s projections for the
quarter, and as expected, were heavily influenced by comparisons to last
year`s July release of the fourth installment in the Harry Potter series.
Category management initiatives continued to bring about double-digit
comparable store sales increases in Gifts and Stationery and DVD. In
Children`s, overall sales were strong, yet same store sales suffered due to
Harry Potter comparisons. The presence of Title Sleuth computer search
stations in all Borders stores remained an influential factor in driving
Special Orders sales to a double-digit comparable store sales increase.
The company successfully re-launched its e-commerce site, Borders.com ,
which is now co-branded with Amazon.com . The new site brings customers the
continued convenience of an online shopping option with the benefits of
Amazon.com`s leading e-commerce platform. The new site features links to
BordersStores.com , a separate site operated by Borders. This site has been
completely redeveloped and now offers an online link to bricks and mortar
stores including an exclusive store inventory feature that gives customers the
option of checking availability of items in all Borders stores.
International
International sales for the second quarter were on target at $53.1
million, a 10.4% increase over the same period last year, generated primarily
by strong performance in the company`s U.K. locations. As expected, the
EBITDA loss of $1.1 million for the first six months of the fiscal year
improved approximately 50% compared to a year ago.
Waldenbooks
Total sales at Waldenbooks in the second quarter were $175.6 million, down
5.7% from the prior year. Comparable store sales for Waldenbooks were -5.5%
for the quarter, reflecting the cycling against last year`s Harry Potter
release as well as the decline in mall traffic. Loss from continuing
operations was $1.0 million compared to a profit of $0.3 million in the second
quarter of 2000.
About Borders Group
Borders Group, Inc., (NYSE: BGP) a FORTUNE 500 company, is a leading
global retailer of books, music, video and other information and entertainment
items with stores in the United States, United Kingdom, Australia, New
Zealand, Singapore, and the commonwealth of Puerto Rico. Headquartered in Ann
Arbor, Mich., Borders Group employs 30,000 people worldwide and operates over
345 Borders domestic superstores, 17 International Borders stores, 32 Books
etc. locations and approximately 860 Waldenbooks stores. Teamed with
Amazon.com , the company also offers online shopping through Borders.com.
Financial data is hosted on http://www.bordersgroupinc.com and information on Borders
stores is available through http://www.bordersstores.com.
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