Borders Group Meets Adjusted Third-Quarter Expectations; <BR>Borders' Segment Sales Up 5.1%, Net Income Jumps 58%20 Nov, 2001 By: Hive News
Ann Arbor, Mich.-headquartered Borders Group Inc. on Tuesday reported results for the third quarter of 2001 ended Oct. 28, with performance in line with the company's updated guidance provided Oct. 8. Total sales for Borders superstores were $480.6 million for the third quarter, a 5.1% increase over superstore sales the prior year. Net income for the Borders segment was $4.1 million for the quarter, up 58% over third quarter a year ago. Comparable sales for Borders stores were -.2%.
"While store traffic at Borders and Waldenbooks was clearly slowed by world events, transaction size was higher than average and we continued to gain market share," said Borders Group president and c.e.o. Greg Josefowicz.
Consolidated sales, including the Borders segment, International and Waldenbooks, were $713.7 million, an increase of 1.8% for the quarter compared to 2000. Loss from continuing operations was $3.1 million, compared to a loss of $2.6 million last year. Gross margin for the third quarter was 25.2% compared to 25.3% last year. SG&A as a percent of sales was 24.9%, which is flat compared to the year prior. Consolidated earnings per share improved over third quarter last year to a loss of four cents versus the six-cent loss in 2000, according to a company press statement.
While sales for the total segment -- including the prior year for Borders.com -- increased 3.5% to $480.6 million, Borders superstore sales specifically increased by 5.1% over last year. Net income was $4.1 million, compared to $2.6 million one year ago, an increase of 58%. At -.2%, comparable store sales in Borders superstores were in line with the company's projections for the quarter, and as expected, were heavily influenced by world events, said the company.
The company projects Borders superstore comparable store sales to range from -1% to a 2% increase for the fourth quarter. Waldenbooks stores are expected to generate comparable store sales figures of -5% to -4% for the quarter.
"Predicting consumer behavior in these uncertain times is challenging and our wider-than-normal guidance range reflects this uncertainty," Josefowicz said.
"Certainly, we will continue marketing efforts to drive traffic and build upon positive trends we've seen in spending across several book categories, DVD and sidelines, that represent attractive, affordable gift options appropriate in any circumstance. At the same time, our success at cost management combined with solid cash flow gives us confidence in total company performance within the range of guidance provided," he said.
Borders Group operates over 360 Borders domestic superstores, 21 international Borders stores, 33 Books etc. locations and approximately 850 Waldenbooks stores. Teamed with Amazon.com , the company also offers online shopping through Borders.com (www.borders.com ).