Borders Group reports continued losses in second quarter
Borders Group Inc. says it continued to lose money in its fiscal second quarter as a result of charges and declining sales at its bookstores.
The Ann Arbor-based bookseller also looked to trim inventory and reduce costs as shoppers continue to head online and to discount retailers for books.
Borders recorded a loss of $45.6 million, or 76 cents per basic share, for the period ended Aug. 1. That compares with a loss of $9.2 million, or 15 cents per basic share, in the same period a year ago.
Quarterly results included non-operating charges of $32.9 million, or 55 cents per basic share. Excluding the mainly non-cash charges, the company's loss was 21 cents per share in the latest quarter.
"The second quarter was a transitional one as we made significant space and inventory reductions to strategically position declining categories for profitability while further developing businesses that have potential," CEO Ron Marshall said in a statement.
Marshall said the actions hurt its sales in the near term, but added the chain is now in position for better sales during the second half of the year.
The company's performance was similar to that of its first quarter, when its results were weighed down by soft sales and some charges.
Borders managed to lower its second-quarter selling, general and administrative expenses to $168.9 million from $205.1 million in the prior-year period.
Sales slid 18 percent to $616.8 million from $749.2 million mostly on declines at its namesake bookstores and Waldenbooks specialty retail stores. International sales fell 5.6 percent to $28.7 million, pulled down by the stronger dollar.
Same-store sales for its Borders superstores dropped 17.9 percent, while Waldenbooks specialty retail stores reported a 10.8 percent same-store sales decline.
Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
Borders operates about 1,000 stores globally under the Borders and Waldenbooks brands.