Barnes and Noble 2015 Annual Report Download - page 20

Income Taxes
52 Weeks Ended 53 Weeks Ended
Dollars in thousands
May 2,
2015
Effective
Rate
May 3,
2014
Effective
Rate
Income Taxes $ 78,687 68.3% $ 51,953 1,108.9%
The Company recorded an income tax provision in fiscal
 of . million compared with income tax provision
of . million in fiscal . The Company’s effective
tax rate decreased to . in fiscal  compared with
,. in fiscal . The lower effective tax rate in fiscal
 was due primarily to the impacts of loss allocations
within the Company’s NOOK Media joint venture and non-
deductible expenses, partly offset by valuation allowances,
R&D tax credits and changes to unrecognized tax benefits.
In accordance with accounting principles generally
accepted in the United States (GAAP) rules on accounting
for income taxes, the Company evaluates the realizability of
its deferred tax assets at each reporting date. The Company
records a valuation allowance when it determines that it
is more likely than not that all or a portion of a particular
deferred tax asset will not be realized. As part of this evalu-
ation, the Company reviews all evidence, both positive and
negative, to determine if a valuation allowance is needed.
The Company’s review of positive evidence included the
review of feasible tax planning strategies that may be
implemented and the reversal of temporary items. The
Company determined that there was sufficient negative
evidence to establish valuation allowances against cer-
tain deferred tax assets generated during this fiscal year,
totaling . million. The Company will monitor the need
for additional valuation allowances at each quarter in the
future and, if the negative evidence outweighs the positive
evidence, an allowance will be recorded.
Net Earnings (Loss)
52 Weeks Ended 53 Weeks Ended
Dollars in thousands
May 2,
2015
Diluted
EPS
May 3,
2014
Diluted
EPS
Net Income (Loss) $ 36,596 $ 0.21 $ (47,268) $ (1.12)
As a result of the factors discussed above, the Company
reported a consolidated net income of . million (or
. per diluted share) during fiscal , compared
with consolidated net loss of (.) million (or . per
diluted share) during fiscal .
53 WEEKS ENDED MAY 3, 2014 COMPARED WITH
52 WEEKS ENDED APRIL 27, 2013
Sales
The following table summarizes the Company’s sales for the
 weeks ended May ,  and  weeks ended April ,
:
53 Weeks Ended 52 Weeks Ended
Dollars in thousands
May 3,
2014 % Total
April 27,
2013 % Total
B&N Retail $ 4,295,110 67.3% $ 4,568,243 66.8%
B&N College 1,748,042 27.4% 1,763,248 25.8%
NOOK 505,862 7.9% 780,433 11.4%
Elimination (167,657) (2.6)% (272,919) (4.0)%
Total Sales $ 6,381,357 100.0% $ 6,839,005 100.0%
The Company’s sales decreased . million, or .,
during fiscal  to . billion from . billion dur-
ing fiscal . The decrease by segment is as follows:
tB&N Retail 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. The decrease was attributable to a . decrease in
comparable store sales, which decreased sales by .
million and lower online sales, which declined by .
million. Closed stores decreased sales by . million,
partially offset by new stores, which increased sales by
. million. B&N Retail also includes third-party sales
of Sterling Publishing, which declined . million, or
., versus the prior year.
Of the . million decrease in comparable store
sales, core comparable store sales, which exclude sales
of NOOK® products, decreased . million, or .,
as compared to the prior year, while sales of NOOK®
products at B&N Retail stores declined . million
on lower device unit volume and lower average sell-
ing prices. Core comparable sales were impacted by
comparisons to the strong sales of the Fifty Shades and
Hunger Games trilogies in the prior year. Excluding
these trilogies, core comparable store sales decreased
. million or .. Core comparable store sales were
impacted by lower physical book sales, which decreased
sales by . million and a decrease in non-book core
categories of . million. Non-book core categories
18 Barnes & Noble, Inc. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued