Flat year ahead for Barnes & Noble
Barnes & Noble (BKS) shares sank 4% in late trading after the bookseller projected that 2008 earnings will be flat with 2007 levels. The New York-based company said it expects to make $1.70 to $1.90 a share for the year, well below the $2.13-a-share Wall Street analyst consensus estimate. “The company believes that recessionary pressures in this uncertain economic environment will make 2008 an especially challenging retail year,” Barnes & Noble said. “The company’s post-holiday sales trends have continued into the first quarter of 2008 and the bookselling environment remains very competitive.”
The weak 2008 forecast comes just two months after weaker-than-expected holiday sales forced Barnes & Noble to cut its fourth-quarter earnings guidance. The company said Monday that it remains well positioned, with a strong balance sheet, to buy back stock, though shareholders might think twice about whether that’s what they really want. Barnes & Noble bought back $248 million worth of stock during 2007 at an average price of $35.94 - more than 30% above the stock’s recent price. Maybe the company should have waited for the clearance sale.
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