The business stories that matter, by Fortune's Colin Barr
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March 3, 2008, 4:48 pm

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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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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