Barnes and Noble 2011 Annual Report Download - page 20

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Income taxes were $8.4 million in fi scal 2010 compared
with $55.6 million in fi scal 2008. The Company’s eff ective
tax rate in fi scal 2010 decreased to 18.6% compared with
39.4% during fi scal 2008. The decrease in the eff ective
tax rate was due primarily to the recognition of previ-
ously unrecognized tax benefi ts for years settled with the
applicable tax authorities. This benefi t was partially off set
by additional accruals for subsequent years’ unrecognized
tax benefi ts.
Loss from Discontinued Operations
On February 25, 2009, the Company sold its interest in
Calendar Club to Calendar Club and its chief executive offi -
cer for $7.0 million, which was comprised of $1.0 million in
cash and $6.0 million in notes. Calendar Club is no longer a
subsidiary of the Company and the results of Calendar Club
have been classifi ed as discontinued operations in all peri-
ods presented. Accordingly, the Company reported a $9.5
million loss from discontinued operations for the 52 weeks
ended January 31, 2009. During fi scal 2011, the Company
received the $6.0 million note payment from Calendar
Club. The note was received prior to its scheduled due date.
Net Loss Attributable to Noncontrolling Interests
Net loss attributable to noncontrolling interests was $0.03
million during fi scal 2010 and fi scal 2008, and relates to
the 50% outside interest in Begin Smart LLC.
Net Earnings Attributable to Barnes & Noble, Inc.
52 weeks ended
Dollars in thousands
May 1,
2010
Diluted
EPS
January
31, 2009 Diluted EPS
Net Earnings
Attributable
to Barnes & Noble, Inc. $ 36,676 $ 0.63 $ 75,920 $ 1.29
As a result of the factors discussed above, the Company
reported consolidated net earnings of $36.7 million (or
$0.63 per diluted share) during fi scal 2010, compared with
consolidated net earnings of $75.9 million (or $1.29 per
diluted share) during fi scal 2008.
13 WEEKS ENDED MAY 2, 2009 COMPARED WITH
13 WEEKS ENDED MAY 3, 2008
Sales
The following table summarizes the Company’s sales for the
13 weeks ended May 2, 2009 and May 3, 2008:
13 weeks ended
Dollars in thousands May 2, 2009 % Total May 3, 2008 % Total
B&N Retail $ 1,012,077 91.6% $ 1,055,628 91.3%
B&N.com 93,075 8.4% 100,254 8.7%
Total Sales $ 1,105,152 100.0% $ 1,155,882 100.0%
During the 13 weeks ended May 2, 2009, the Company’s
sales decreased $50.7 million, or 4.4%, to $1.11 billion from
$1.16 billion during the 13 weeks ended May 3, 2008. This
decrease was primarily attributable to the following:
• Barnes & Noble store sales for the 13 weeks ended May 2,
2009 decreased $43.6 million, or 4.1%, to $1.01 billion
from $1.06 billion during the 13 weeks ended May 3,
2008, and accounted for 91.6% of total Company sales.
The 4.1% decrease in Barnes & Noble store sales was
primarily attributable to a 4.9% decrease in transaction
volume driven by a decline in traffi c stemming from
general economic conditions, which resulted in a 5.7%
decrease in comparable store sales or $54.6 million, and
closed stores that decreased sales by $28.7 million, off set
by new Barnes & Noble store sales of $42.2 million.
The 5.7% decrease in comparable store sales was also
attributable to the decrease in comparable music and
audio department sales caused by industry trends toward
electronic downloads.
• Barnes & Noble.com sales decreased $7.2 million, or
7.2%, to $93.1 million during the 13 weeks ended May
2, 2009 from $100.3 million during the 13 weeks ended
May 3, 2008. This decrease was primarily due to lower
conversion ratio, which measures the ratio of online
orders to visits. The decrease was also due to lower aver-
age online order values.
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 fi fty states and the District of
Columbia.
18 Barnes & Noble, Inc. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued