Barnes and Noble 2010 Annual Report Download - page 19

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During the 13 weeks ended May 2, 2009, the Company
opened six Barnes & Noble stores and closed six, bringing
its total number of Barnes & Noble stores to 726 with 18.8
million square feet. The Company closed one B. Dalton
store, ending the period with 51 B. Dalton stores and
0.2 million square feet. As of May 2, 2009, the Company
operated 777 stores in the fifty states and the District of
Columbia.
Cost of Sales and Occupancy
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
Cost of Sales and
Occupancy $ 773,491 70.0% $ 807,915 69.9%
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 and common
area maintenance, partially offset by landlord tenant allow-
ances amortized over the life of the lease.
During the 13 weeks ended May 2, 2009, cost of sales and
occupancy decreased $34.4 million, or 4.3%, to $773.5
million from $807.9 million during the 13 weeks ended
May 3, 2008. As a percentage of sales, cost of sales and
occupancy increased slightly to 70.0% from 69.9% the same
period one year ago. This increase was primarily attribut-
able to the deleveraging of fixed occupancy costs on the
negative comparable store sales, partially offset by lower
distribution expenses as well as merchandising and supply
chain initiatives.
Selling and Administrative Expenses
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
Selling and
Administrative
Expenses $ 286,554 25.9% $ 303,863 26.3%
Selling and administrative expenses decreased $17.3
million, or 5.7%, to $286.6 million during the 13 weeks
ended May 2, 2009 from $303.9 million during the 13
weeks ended May 3, 2008. During the 13 weeks ended May
2, 2009, selling and administrative expenses decreased as
a percentage of sales to 25.9% from 26.3% during the prior
year period. During the 13 weeks ended May 3, 2008, the
Company incurred an $8.3 million charge for a settlement
with the State of California regarding the collection of sales
and use taxes on sales made by Barnes & Noble.com from
1999 to 2005. Excluding this charge, selling and adminis-
trative expenses increased as a percentage of sales to 25.9%
from 25.6% the same period one year ago. This increase
was primarily due to the deleveraging of fixed expenses
with the negative comparable store sales, offset in part by
planned cost reductions.
Depreciation and Amortization
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
Depreciation and
Amortization $ 45,879 4.2% $ 41,314 3.6%
During the 13 weeks ended May 2, 2009, depreciation and
amortization increased $4.6 million, or 11.0%, to $45.9
million from $41.3 million during the 13 weeks ended May
3, 2008. This increase was primarily due to depreciation on
additional capital expenditures for existing store mainte-
nance, technology investments and new store openings.
Pre-opening Expenses
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
Pre-opening Expenses $ 2,472 0.2% $ 4,537 0.4%
Pre-opening expenses decreased $2.1 million, or 45.5%,
to $2.5 million during the 13 weeks ended May 2, 2009
from $4.5 million for the 13 weeks ended May 3, 2008. This
decrease was primarily the result of the timing and volume
of new store openings.
Operating Loss
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
Operating Loss $ (3,244) (0.3%) $ (1,747) (0.2)%
The Company’s consolidated operating loss increased $1.5
million, or 85.7%, to $3.2 million during the 13 weeks
ended May 2, 2009 from $1.7 million during the 13 weeks
ended May 3, 2008. This increase was primarily due to
the negative comparable store sales, as well as the matters
discussed above.
Interest Income (Expense), Net and Amortization
of Deferred Financing Fees
13 weeks ended
Dollars in thousands May 2, 2009 May 3, 2008 % of Change
Interest Income
(Expense), Net and
Amortization of
Deferred Financing
Fees $ (199) $ 807 (124.7%)
2010 Annual Report 17