Barnes & Noble finished the fiscal year with sales of $3.89 billion, a decline of 6.5% from fiscal 2016. Despite the decrease in sales, operating income in fiscal 2017, which ended April 29, jumped to $54.3 million, up from $14.6 million.
The retailer was able to improve its bottom line largely by reducing its losses in its Nook division, where the operating loss was cut to $36.4 million. B&N endured a loss of $98.6 million, thanks to the division, in fiscal 2016. While Nook’s losses fell in the year, so did its sales; Nook sales dropped 23.4%, to $146.5 million.
In its core retail business, B&N’s sales for the year fell 6.0%, to $3.78 billion, while operating income fell to $90.7 million, from $113.3 million in fiscal 2016. B&N attributed the lower retail earnings to the drop in store sales.
The decline in retail revenue was due in part to the 6.3% decline in same store sales for the year. Online sales rose 3.7%.
Demos Parneros, who was named CEO of the chain in April, acknowledged that fiscal 2017 was a “challenging year” for the company. However, he noted the retailer’s performance was not without bright notes, pointing to B&N’s ability to lower costs, which in turn improved profitability.
In fiscal 2018, Parneros said, B&N’s focus will be on “ways to improve the business and reignite sales through an aggressive test and learn process.” He added that a “companywide simplification process will take out costs.”
B&N’s sales turnaround will take some time, though. It said it expects comp store sales to fall in the lower single digits in fiscal 2018.
During the conference call with analysts, B&N execs said they expect to open and close roughly the same number of outlets as they did in fiscal 2017 when B&N opened three stores and closed 10. B&N considers the outlets it opened last year to be test stores in which the company will explore which new ideas work and which don’t.
B&N finished fiscal 2017 with 633 stores.