Barnes and Noble 2011 Annual Report Download - page 21

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Cost of Sales and Occupancy
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
B&N Retail $ 699,916 69.2% $ 730,725 69.2%
B&N.com 73,575 79.0% 77,190 77.0%
Total 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 off set 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. The increase or (decrease) by segment
is as follows:
• B&N Retail cost of sales and occupancy remained fl at as
a percentage of sales at 69.2% during the 13 weeks ended
May 2, 2009 and the 13 weeks ended May 3, 2008.
• B&N.com cost of sales and occupancy increased as a
percentage of sales to 79.0% during the 13 weeks ended
May 2, 2009 from 77.0% during the 13 weeks ended May
3, 2008. This increase was primarily due to deleveraging
of fi xed costs on the decrease in sales.
Selling and Administrative Expenses
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
B&N Retail $ 259,440 25.6% $ 270,484 25.6%
B&N.com 27,114 29.1% 33,379 33.3%
Total 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. The
increase or (decrease) by segment is as follows:
• B&N Retail selling and administrative expenses remained
fl at as a percentage of sales at 25.6% during the 13 weeks
ended May 2, 2009 and the 13 weeks ended May 3, 2008.
• B&N.com selling and administrative expenses decreased
as a percentage of sales to 29.1% during the 13 weeks
ended May 2, 2009 from 33.3% during the 13 weeks
ended May 3, 2008. This decrease was primarily due to an
$8.3 million charge incurred during the 13 weeks ended
May 3, 2008 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.
Depreciation and Amortization
13 weeks ended
Dollars in thousands May 2, 2009 % Sales May 3, 2008 % Sales
B&N Retail $ 41,246 4.1% $ 36,504 3.5%
B&N.com 4,633 5.0% 4,810 4.8%
Total 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
B&N Retail $ 2,472 0.2% $ 4,537 0.4%
B&N.com — 0.0% — 0.0%
Total 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
B&N Retail $ 9,003 0.9% $ 13,378 1.3%
B&N.com (12,247) (13.2%) (15,125) (15.1%)
Total 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.
2011 Annual Report 19