Barnes & Noble, Inc. (BKS - Snapshot Report) was left for dead by investors a few years ago on fears that the retail-store book business was collapsing. But this Zacks Rank #1 (Strong Buy) is expected to grow earnings by 142% in fiscal 2014 proving that it may be down, but it's not out.

Barnes & Noble operates 658 Barnes & Noble bookstores in 50 states and its website BN.com. It also operates a NOOK Media LLC subsidiary which specializes in digital reading and education. Barnes & Noble College Booksellers operates 705 bookstores nationwide, servicing 5 million students and faculty members at colleges across the country.

Big Beat in Fiscal Q1 2015

On Sep 9, Barnes & Noble reported first quarter fiscal 2015 results and beat the Zacks Consensus by 10 cents. It still saw a loss of $0.56 however.

Total revenue fell 7% to $1.2 billion with retail revenue, its largest division, falling 5.3%. Same store sales fell 5.1%.

But retail had some bright spots.

Gross margins improved to 29.9% and Toys & Games saw sales rise 19.5%.

The company has a new website set to launch after the holidays and is partnering with Google Shopping to offer same day delivery services in 3 cities.

Analysts Are Bullish

There are reasons for the analysts to be upbeat on the company now. Retail, while still seeing losses, appears to be stabilizing. Nook has also reduced its losses.

Barnes & Noble College business is also stable. Sales were flat in the quarter but at least it isn't a losing segment.

The company is separating the retail division from Nook Media in the first calendar quarter of 2015.

Fiscal 2015 and fiscal 2016 earnings estimates have been rising.

In the last 30 days, the fiscal 2015 Zacks Consensus Estimate jumped to $0.18 from a loss of $0.22. If the company is profitable in fiscal 2015, it would be the first time since 2010, when it made $0.32.

Analysts are also expecting a profit in fiscal 2018 of $0.88.

Shares Rallied

Shares are well off their lows but are volatile.

But the days of getting a deal are over. Barnes & Noble has a sky-high forward P/E of 109.

Barnes & Noble has managed to be the last man standing in the book business. It is finding a way to go head-to-head with Amazon.

For investors looking for a turnaround retail play, Barnes & Noble should be on the short list.

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