Quarterly profit at Barnes & Noble missed estimates by analysts as the chain of bookstores invested in its business specializing in college books prior to its spinoff and paid more in taxes.
Barnes & Noble, which last month announced it would separate its college books business before August, saw its stock fall by 7.5% during Tuesday morning trading on Wall Street.
The largest chain of bookstores in the U.S. had planned earlier to spin off its growing as well as profitable business with its e-book and Nook tablets business.
On Tuesday, Barnes & Noble said it expects its comparable sales for its college business to be flat for the year, which ends April. That is better than its earlier forecast of a decline in the low-single digits.
Earnings prior to taxes, interest, amortization and depreciation declined 20% to end the third quarter at $28.1 million. The net income for the company was up 14% to just over $72.2 million equal to 93 cents a share, while revenue dropped by close to 2% ending at $1.96 billion.
On average, analysts were expecting B&N to earn a profit of $1.23 a share with revenue coming in at $1.92 billion.
Total comparable store sales dropped by 1%, which matches analyst’s estimates.
The college textbook part of the business posted $521 million in quarterly revenue, which was 7.2% higher than the same period one year ago.
Shares over the past year at B&N are flat despite a big selloff on Tuesday.
With the planned spinoff of its college unit, B&N could be taking away its growth driver. Revenue is projected to fall 5% for the year, which will put pressure on the ability of the company to hold down costs.
