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HenryTo
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 Posted: Tue Nov 28, 2006 11:11 am Post subject: Barnes & Noble (BKS) |
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Word is that executives from B&N have been dispatched to the Netherlands to check out the RFID system being used by Selexyz:
http://www.mmh.com/article/CA6335587.html
Selexyz claims that the store that has implemented this has been seeing 25% higher sales and that it expects overall profits to increase by 40% by the time this system is implemented company-wide.
Last edited by HenryTo on Sun Jan 04, 2009 10:49 am; edited 1 time in total |
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HenryTo
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| Posted: Mon Apr 30, 2012 11:18 am Post subject: |
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Morningstar on the BKS-MSFT strategic partnership.
| Quote: | We are placing Barnes & Noble BKS under review following Monday's announcement that the firm has reached an agreement with Microsoft MSFT to form a strategic partnership. The company will host a conference call this morning, after which we will digest the news and revisit our fair value estimate. Shares are up sharply in premarket trading (roughly 80%), and we believe investors are focused on three key takeaways from the release.
First, the formation of "Newco" allows Barnes & Noble to side with a substantially larger and financially stable partner; Microsoft has nearly $50 billion in net cash and equivalents. We have long said that Barnes & Noble faces an uphill battle on its own and that a capital injection could be needed to support its near-term growth ambition. Today's news theoretically fills that void, at least for now. Under the agreement, Newco and Microsoft will share revenue, while Microsoft will invest $60 million annually for the first three years as well as fund Newco's research and development, to the tune of $25 million each year for the first five years.
Second, the relationship with Microsoft provides a tremendous opportunity for Barnes & Noble's Nook software to gain preferred placement on the Windows operating system. Although the Nook applications currently can be downloaded and accessed through Windows, Android, and Apple AAPL platforms, we think the pending launch of a new Windows-based touch-screen operating system tablet later this year could prompt consumers to consider Barnes & Noble as a method of content delivery, over competing Kindle (Amazon AMZN) or Apple devices/platforms.
Third, the company mentioned t hat Newco will blend the digital and college bookstore platform, which we view as an interesting move for both parties. It's important for Microsoft in that the company hasn't had much of an e-book presence to date and is late to the party. By targeting education, Microsoft can enter this vast and growing marketplace while differentiating its offering slightly (and not becoming a me-too in digital trade books). For Barnes & Noble, this is a clear win, as it has looked to evolve its mature college booksellers business into a more proactive and technology-based platform.
We still think Barnes & Noble is an important player in bookselling, and its management and merchandising teams have executed well in a difficult industry. However, as we wrote last month, our structural thesis on the company (and industry), which bakes in an increasingly competitive marketplace and diminishing fundamentals, remains intact, and we see few near-term catalysts outside of a renewed interes t from Liberty Media to warrant a more optimistic outlook.
Although the Nook is capturing headlines this morning, we appreciate the underlying value in the brick-and-mortar business, though uncertainty surrounding the strategic path of the digital Nook business (not to mention its drag on profitability) has clearly weighed on shares and our fundamental outlook. As we have stated previously, both the brick-and-mortar and college segments generate operating profits and, in a sum-of-the-parts analysis, there is an upside scenario in which shares would look attractive (provided the free cash flow produced from these segments actually flowed to shareholders). Today, the market appears to be pricing in this upside scenario, which is likely due in part to short covering. There will undoubtedly be questions surrounding where this leaves Liberty Media and the other Schedule 13 holders--including insiders, who collectively own more than 30% of the firm's shares--but we view tod ay's announcement as an incremental positive. |
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HenryTo
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| Posted: Thu Dec 01, 2011 5:25 pm Post subject: |
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Morningstar on BKS' fiscal 2Q earnings.
| Quote: | | Barnes & Noble BKS reported fiscal second-quarter sales and profitability that came in below consensus expectations, though the loss per share ($0.11) was much closer to our own internal forecast ($0.14). The gross margin gains in the quarter were impressive, but management now expects full-year EBITDA to come in at the lower end of the prior guidance range as the firm continues to aggressively invest in its digital platform. There is no change to our fair value estimate, as near-term gyrations haven't altered our long-term thesis. Total sales ticked up 1% to $1.9 billion, as higher Nook sales and incremental sales from closed Borders stores helped offset a continued slide in physical book sales. Retail comparable-store sales dipped 0.6%, College comps inched up 0 .4%, and BN.com total sales increased 17% to $205 million, further indication that the firm is weathering the current macro headwinds fairly well. Gross margins increased 130 basis points, to 24.9%, largely attributable to gains in the .com business, which reported 15% gross margins in the quarter (up from 6.4% in the prior year period). However, consistent with our thesis, the firm aggressively invested in its digital platform, which resulted in higher selling, general, and administrative expenses and led to a slight operating loss in the quarter. The company reported a net loss of $0.11 per share (excluding $0.06 associated with the preferred stock dividend), in line with our implied estimate of a $0.14 loss. Following a 40% run in the shares over the past two months, Barnes & Noble looks fairly valued to us. We believe profitability is still likely at least another year away (May 2013), supported by management's updated full-year outlook, which now assumes that EBITDA wil l come in at the "lower end" of the prior ($210 million-$250 million) range. We see few catalysts to get us terribly excited about potential near-term upside. The firm faces increased pressure from online/digital competitors such as Apple AAPL and Amazon AMZN, among others, and although we believe the physical bookselling business ultimately has a fairly long tail, and it is still early in the digital book/reader movement, we continue to have some long-range concerns about the firm's positioning in a competitive book market (both physical and digital). As such, we would advise investors to seek a wider margin of safety before adding to positions. |
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HenryTo
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HenryTo
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Aug 30, 2011 12:47 pm Post subject: |
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Morningstar on BKS' fiscal 1Q earnings:
| Quote: | | Barnes & Noble BKS reported a fiscal first-quarter operating loss, as expected, for the period ended July 30 and offered a full-year outlook that was in line with our forecast. Near-term disruption related to the Borders Group liquidation partially offset continued gains in the e-book and e-reader business. We expect to adjust our financial model assumptions, and we still expect to decrease our fair value estimate modestly to account for a higher share count due to Liberty Media's recent convertible preferred stock purchase and the 7.75% annual dividend. Total revenue rose 2% year over year to $1.4 billion, and although comparable-store sales fell 1.6% in the quarter (due in part to Borders' liquidation), management said it expects to realize an incremental $150 million-$200 million in sales following the complete liquidation of its former rival. Bn.com sales were $198 million, up 37% year over year, an encouraging sign of continued momentum as the business looks to reinvent itself as a growth enterprise (still a tall order, in our view). Expenses were in line with our projections, and ongoing investments in the dot-com business have yet to lead to profitability (dot-com segment EBITDA margin was negative 29.4% in the quarter). The company reported a net loss of $0.99 per share during the quarter, in line with our implied estimate of a $1.00 loss. With a full Liberty Media takeover now off the table, Barnes & Noble management must refocus on its day-to-day operations and the growth potential of the Nook franchise. We view the shares as modestly undervalued from a fundamental perspective, but with profitability probably at least another year away (May 2013), we see few catalysts to get us excited about potential near-term upside. The firm faces increased pressure from online/digital competitors such as Apple AAPL and Amazon AMZN, among others, and although we believe the physical bookselling business ultimately has a fairly long tail and it is still early in the digital book/reader movement, we continue to have some long-range concerns about the firm's positioning in a competitive book market (both physical and digital). We would advise investors to seek a wider margin of safety before adding to positions. |
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HenryTo
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| Posted: Fri Aug 19, 2011 3:41 pm Post subject: |
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Morningstar on BKS' $204 million convertible offering to Liberty Media:
| Quote: | | Barnes & Noble BKS announced Thursday that instead of purchasing the company outright, Liberty Media will invest an aggregate of $204 million through a convertible preferred stock purchase. With rumors swirling over the past few days and the shares off 24% in just the past week, the change in Liberty's stance didn't come as a complete surprise. As we rework our financial model to account for this development, we plan to decrease our fair value estimate slightly to account for a higher share count above the $17 convert price and the 7.75% annual dividend (to be paid quarterly). Barnes & Noble chairman Len Riggio indicated that he views the investment as a "strong endorsement" of the business, but investors might not be terribly pleased, given that the $17 all-cash bid previously offered by Liberty Media is now off the table. It's important that Barnes & Noble secured the $200 million-plus investment, but it comes with a steep price (high dividend and relatively low convert price), it probably only provides the firm with roughly a year of funding as its annual digital investment run rate is likely to exceed $150 million, and the alternative (a full buyout) would have been viewed as superior. We haven't yet adjusted any revenue or expense drivers in our model, though the capital infusion could theoretically accelerate (increase) each of these items. We still believe Barnes & Noble faces several headwinds in its brick-and-mortar segment (though the firm has arguably performed relatively well) as well as its digital push, as it competes with the likes of megacap companies like Apple AAPL and Amazon AMZN. We still believe that it will take another year or so for the firm to return to profitability, which is likely to dissuade investors. Shares are trading at a discount to our fair value estimate, but we would wait for a more opportunistic entry point before investing. The near-term market volatility associated with the ongoing liquidation of Borders stores, not to mention the general concern surrounding the U.S. economic recovery, has us taking a more cautious stance and looking for a greater margin of safety. |
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HenryTo
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| Posted: Tue Jun 21, 2011 11:44 am Post subject: |
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Morningstar on BKS' fiscal 4Q earnings:
| Quote: | | Barnes & Noble BKS posted fiscal fourth-quarter (April 30, 2011) sales growth and an operating loss which were slightly ahead of our expectations. Near-term disruption surrounding Borders Group was partially offset by encouraging revenue growth in the e-book and e-reader space. We expect to adjust our financial model assumptions. While the company hasn't provided a full-year statement of cash flows, our revised outlook is unlikely to result in a fair value change. Barnes & Noble experienced several highs and lows during fiscal 2011, and fourth quarter results reflected the recent swings. Total company revenue was up 4% year-over-year, to $1.4 billion, and while Barnes & Noble comparable store sales dipped 2.9% in the quarter (due in large part to disruption surrou nding the liquidation of certain Borders stores), management noted that it has picked up incremental sales in those markets. Bn.com sales growth accelerated to 78% year-over-year, as this segment continues to exhibit solid momentum, and even the college business saw a lift (2.8% comp sales increase) in the seasonally soft quarter. Overall, expenses were slightly below our projections, but ongoing investments in the dot-com business have yet to lead to profitability (its dot-com segment EBITDA margin was 26.3% in the quarter). The company reported a loss of $1.04 per share during the quarter, ahead of our implied estimate of a $1.27 loss. Looking ahead, management is rightfully excited about the traction its NOOK franchise has achieved in the marketplace. This is an encouraging step, as the firm looks to re-establish itself as a growth business, which is arguably a tall order. However, with profitability likely at least another year away (May 2013), we see few catalysts--outside of the current Liberty Media all-cash bid of $17 per share--to get us excited about potential near-term upside. We view the shares as modestly overvalued from a fundamental perspective, though we acknowledge that $17-$22 per share appears to be a reasonable takeout range for the stock. While we believe that the physical bookselling business ultimately has a fairly long tail, and it is still early in the digital book/reader movement, we continue to have some long-range concerns surrounding the firm's positioning in a competitive book market (both physical and digital). As such, we would advise investors to seek a more attractive entry point before adding to positions. |
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HenryTo
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| Posted: Thu May 05, 2011 1:46 am Post subject: |
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Morningstar's latest comments on BKS:
| Quote: | | On Monday, Barnes & Noble BKS announced that it had amended and extended its existing $1 billion credit facility, which should reduce annual interest expense by more than $10 million. We plan to adjust our financial model assumptions on the back of this release, but the impact will not be great enough to alter our fair value estimate. We still believe Barnes & Noble has enough financial flexibility to meet its regular purchase obligations and the company is in good standing with publishers and its suppliers. Although it is encouraging that the firm continues to find ways to squeeze costs out of its model, the savings will undoubtedly be invested back into the business, specifically the digital platform. Although we don't expect Barnes & Noble to generate a profit until fiscal 2013 (May), the company is in our view still acting prudently by reinvesting its incremental cash into growth initiatives. Meanwhile, competitor Borders Group, which filed for Chapter 11 bankruptcy protection in February, is still having difficulty treading water. According to filings posted last week, Borders posted a $36.8 million operating loss (including reorganization charges) on $331 million in sales for the two-month period ended March 26. Barnes & Noble is in a stronger relative position (compared with Borders) and its shares trade below our fair value estimate, but we still have some long-range concerns surrounding the firm's positioning in a competitive book market, both physical and digital. We see few catalysts, outside of the ongoing review of strategic alternatives, to get us excited about potential near-term upside in Barnes & Noble shares, and we expect a few quarters of choppy results. |
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HenryTo
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| Posted: Mon Dec 06, 2010 12:25 pm Post subject: |
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Morningstar on Ackman's proposed bid for Barnes & Noble:
| Quote: | | Reports surfaced this morning that Bill Ackman's Pershing Square Capital Management has offered to finance a Borders-backed buyout of competitor Barnes & Noble BKS, for around $900 million, or roughly $16 per share. While stranger things have certainly happened, we view this scenario as unlikely, unless the transaction price inches higher. Both firms face their own internal and external challenges, and the risk is that combining entities now, under these circumstances, could present more of a distraction than anything else. Barnes & Noble's board has been reviewing strategic alternatives since early August, the company recently endured a messy proxy contest with Ron Burkle and Althea, the digital push is costing more than previously anticipated, and the physical bookselling business remains under pressure. We think that investors who stuck with the stock this year may be unwilling to settle for $16 per share, especially given that they patiently tolerated a $0.25 per share quarterly dividend while Barnes & Noble's share price declined more than 30%. |
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rffrydr
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HenryTo
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| Posted: Sun Jan 04, 2009 7:57 pm Post subject: |
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That particular Borders store has no restrooms and a relatively small Cafe/reading area, although there are chairs scattered throughout the store. In general, the many Barnes & Nobles stores I have visited in Houston and Los Angeles are more comfy, have more reading areas, etc. Some of the Borders Stores, such as the those in Westwood, Century City, and on 610 South of Highway 59 in Houston are not too shappy though. I would say in general, they are rather interchangable, although I usually prefer B&N over Borders (I have a membership in both stores).
There are also no alternatives if you simply want to go and browse the latest works, or sit down and have a cup of coffee while doing it. Unfortunately for Borders, I only buy books from them whenever I get a 30% coupon off - and that's only when I need the books rather quickly. Otherwise, I just go through Amazon.com. |
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rffrydr
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| Posted: Sun Jan 04, 2009 11:32 am Post subject: |
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In my cursory experience these stores are far from interchangeable; they seemed almost of two different industries. I'll let you guess which one was for readers.
Perhaps it's their distribution across the smaller localities that'll give Barnes the real pickup.
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HenryTo
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| Posted: Sun Jan 04, 2009 10:55 am Post subject: |
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I just received this over email:
| Quote: | | On 1/10/2009 we will be closing our Borders store at Third Street Promenade. Clearance Sale. 40% off list price everything in the store! |
There is a Barnes & Noble on the same street that is walking distance. With Borders starting to close some of its stores (it closed one of its Sacramento stores yesterday), Barnes & Noble is starting to become a pretty attractive investment. Interestingly, someone with big pockets agrees with me as well:
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Burkle's Yucaipa buys Barnes & Noble shares
Friday January 2, 7:08 pm ET
NEW YORK (Reuters) - Yucaipa Cos, a private equity firm controlled by billionaire Ron Burkle, said on Friday it had acquired an 8.3 percent stake in bookseller Barnes & Noble Inc (NYSE:BKS - News), saying it believed the shares were undervalued.
The company's shares rose 4 percent after-hours to $15.99, after the announcement.
Yucaipa funds said it had bought about 4.58 million shares since November 24 for about $67.3 million, net of commissions, the company said in a filing with the U.S. Securities and Exchange Commission.
Yucaipa said it would hold the shares as an investment, but would "closely monitor the company's performance and may modify their plans in the future."
The company's stock sank to nearly $12 after reporting a bigger-than-expected quarterly loss and cutting its full year forecast on November 20.
Barnes & Noble follows its smaller rival, Borders Group Inc (NYSE:BGP - News) in attracting investment. Borders' largest shareholder is hedge fund Pershing Square Capital Management, led by William Ackman, and the company last year received $42.5 million in financing from the fund. |
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rffrydr
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| Posted: Tue Nov 28, 2006 11:28 am Post subject: |
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It's already on the cream-cheese--Philly brand, that is. To what purpose, I'm not sure.
Soon to be coming to $100dollar bills at an ATM near you. To what purpose I can well envision.
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