Corporate sales trip up revenue gains at Barnes & Noble.com

Third quarter sales at Barnes & Noble.com rose 5.9% to $102.6 million, the company reported today. Sales to consumers rose 13.1% to $95.5 million from $84.4 million a year ago, but slower-than-expected implementation of sales to corporate customers stemming from its acquisition of Fatbrain.com depressed overall growth.

The company said its gross profit margin for all sales improved to 24% from 21.9%. The improvement resulted primarily from an increase in its internal fulfillment rate, which allowed it to rely less on wholesalers. It also said it has benefited from a more efficient use of shipping providers. Total operating expenses declined 30% in the quarter, for a 55% improvement in its operating loss to $17.8 million from $39.6 million.

The company said its Q3 net loss improved by 54%, to $17.5 million from $38.3 million. Its EBITDA (earnings before interest, taxes, depreciation and amortization) loss improved by 68% to $9.3 million from $28.8 million.

"We are pleased with our third quarter results, which reflect strong sales momentum coupled with significant efficiency gains that enabled us to reduce our losses more quickly than we had originally forecast," CEO Marie Toulantis said. "I believe we are well-positioned to reach our goal of a break-even or slightly positive EBITDA in 2003."

"Barnes & Noble Inc. and Bertelsmann AG have recently announced their intention to purchase stock of the company in the open market, as both major shareholders are fully committed to the long-term success of Barnes & Noble.com," said Chairman Leonard Riggio.

For the full year, Barnes & Noble.com projects net sales in the range of $400 million to $420 million.