Barnes & Noble, Inc (BKS - Snapshot Report) is one of the newest additions to the Zacks Rank #1 (Strong Buy) list. With strong standing in our Style Scores system and favorable estimate revision activity, now may be the right time for investors to take a look at the bookseller.
Third Quarter Earnings
On March 3, Barnes & Noble reported fiscal 2016 third quarter financial results. The company saw earnings of $1.04 per share, surpassing the Zacks Consensus estimate of $1.03 per share. Consolidated net earnings from continuing operations were $80.3 million, compared to net earnings from continuing operations of $39.0 million, or $0.45 per share, in the prior year.
Total revenues for the quarter were $1.4 billion, missing the Zacks Consensus Estimate of $1.423 billion and reflecting a 1.8% decrease from the prior year.
Retail sales, which include Barnes & Noble stores and BN.com, were $1.4 billion, decreasing 1.2% due to lower online sales and store closures. Comparable store sales, however, increased 0.2% for the quarter. Excluding NOOK products, Core comparable store sales increased 1.3% for the quarter.
For fiscal year 2016, Barnes & Noble continues to expect comparable store sales to be approximately flat in comparison to the year ago period. Excluding NOOK products, Core comparable store sales are expected to increase approximately 1%.
Zacks Scores
Barnes & Noble currently has impressive grades in Zacks Style Scores system, with an “A” for Value, an “A” for Growth, and a “C” for Momentum. Its VGM score, which is a weighted combination of the Value, Growth, and Momentum scores, is a commendable “A.”
Estimate Revision Activity
Thanks to a solid showing in its third quarter, there have been two estimate revisions in the last 30 days for Barnes & Noble’s current quarter, one upwards and one downwards. Estimates currently sit at $-0.23 per share, but the company is forecast to see year-over-year growth of 37.84% for the time frame. For next quarter, Barnes & Noble has an even higher year-over-year growth estimate of 93.93%, with an estimate of $0.20 per share.
Bottom Line
It is clear that analysts are starting to become more bullish on Barnes & Noble, as the company’s attempts to turn its profits around are starting to pay off. Its recent earning beat shows that brick and mortar bookstores are not things of the past and are making a resurgence, despite constant competition from e-commerce giant Amazon.com Inc (AMZN - Analyst Report). For investors looking to add a retail stock to their portfolio, Barnes & Noble deserves consideration.
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