Barnes and Noble 2015 Annual Report Download - page 21

include Toys & Games, Gift, Café and other items. Core
sales trends benefitted from a strong line-up of bestsell-
ing book titles, merchandising initiatives and a holiday
advertising campaign. The Company’s management
believes this campaign created greater awareness of the
in-store shopping experience and expanded depth and
breadth of product offerings.
tB&N College sales decreased . million, or .,
to . billion during the  weeks ended May , 
from . billion during the  weeks ended April ,
, and accounted for . of total Company sales.
The inclusion of the rd week contributed . million
in additional sales in fiscal . Excluding the rd
week, sales decreased . million, or ., for the
year. Comparable sales dollars decreased sales by .
million, or ., for the year. Recognition of previously
deferred rental revenues increased sales by . million
for the year. Closed stores decreased sales by . mil-
lion, offset by new store openings, which increased sales
by . million.
The comparable store sales decline of . was attribut-
able to lower textbook sales, which decreased sales by
. million, partially offset by higher textbook rent-
als, which increased sales by . million and higher
general merchandise sales, which increased sales by
. million. While comparable store sales percentages
were adjusted for the impact of textbook rentals, sales
dollars were negatively impacted by the continued growth
of textbook rentals, which have a lower price than new or
used textbooks, and a portion of rental sales are deferred
over the rental period. As B&N College expanded its
textbook rental offerings, its consumers have been
shifting away from higher priced textbook purchases to
lower priced rental options. General merchandise sales
have continued to increase as B&N College continues to
expand its product offerings in its stores.
tNOOK sales decreased . million, or . , to
. million during the  weeks ended May , 
from . million during the  weeks ended April ,
. The inclusion of the rd week contributed .
million in additional sales in fiscal . Device and
accessories sales decreased . million, or ., to
. million during the  weeks ended May , 
on lower device unit volume and lower average selling
prices. Two new tablet products were launched in fiscal
 versus one new e-Ink product in fiscal , as the
Company sold through most of its existing device inven-
tories at reduced prices. Digital content sales decreased
. million, or ., to . million during the 
weeks ended May , . The digital content decrease
was primarily due to lower device unit volume through-
out the year, lower average selling prices and compari-
sons to the Fifty Shades and Hunger Games trilogies in the
prior year. Excluding the impact of these two trilogies,
digital content sales decreased . during the 
weeks ended May , .
tThe elimination represents sales from NOOK to B&N
Retail and B&N College on a sell-through basis. The
decrease versus prior year was due to the lower device
sales at B&N Retail. NOOK sales, net of this elimination,
accounted for . of total Company sales.
In fiscal , the Company opened three and closed 
Barnes & Noble stores, bringing its total number of B&N
Retail stores to  with . million square feet. In fiscal
, the Company added  B&N College stores and closed
, ending the period with  B&N College stores. As of
May , , the Company operated , stores in the 
states and the District of Columbia.
Cost of Sales and Occupancy
53 Weeks Ended 52 Weeks Ended
Dollars in thousands
May 3,
2014 % Sales
April 27,
2013 % Sales
B&N Retail $2,956,821 68.8% $ 3,168,520 69.4%
B&N College 1,310,673 75.0% 1,358,172 77.0%
NOOK 423,585 83.7% 902,726 115.7%
Elimination (167,657) (33.1)% (272,919) (35.0)%
Total Cost of Sales
and Occupancy $4,523,422 70.9% $ 5,156,499 75.4%
The Company’s cost of sales and occupancy includes costs
such as merchandise costs, distribution center costs
(including payroll, freight, supplies, depreciation and
other operating expenses), rental expense, management
service agreement costs with schools, common area main-
tenance and real estate taxes, partially offset by landlord
tenant allowances amortized over the life of the lease.
Cost of sales and occupancy decreased . million, or
., to . billion in fiscal  from . billion
in fiscal . Cost of sales and occupancy decreased as a
percentage of sales to . in fiscal  from . in
fiscal . The decrease by segment is as follows:
tB&N Retail cost of sales and occupancy decreased as a
percentage of sales to . in fiscal  from .
in fiscal . This decrease was attributable to a higher
2015 Annual Report 19