PORTLAND, Ore. – Bookseller Borders Group Inc. said Tuesday that it narrowed its losses and slashed its
debt during the second quarter, but continued to see sales slow as consumers limited their discretionary spending.
The Ann Arbor, Mich.-based company said it lost $9.2 million, or 15 cents a share, for the quarter ending Aug. 2. That compares with a loss of $25.1 million, or 43 cents a share for the same quarter of last year.
“We’re very pleased,” Borders Group CEO George Jones told The Associated Press. “We feel like we’ve been managing our business very well and cutting expenses.”
Investors greeted the results with optimism, sending Borders’ shares up more than 7 percent in after-hours trading.
The company, which has been restructuring and selling some business units, said that it lost $11.3 million, or 19 cents a share, from its continuing operations, compared with a loss of $18.1 million, or 31 cents a share, last year.
Analysts polled by Thomson Reuters had anticipated a second-quarter loss of 29 cents per share, on average.
Total revenue fell to $758.5 million from $812.4 million. Borders said comparable-store sales for the quarter fell 8.9 percent, due in part to the release of a book in the Harry Potter series last year and current declines in music sales.
Excluding Harry Potter and music sales, comparable-store sales fell by 3 percent for the quarter.
Borders did benefit during the quarter from some big-title releases and the sale of its business unit for Australia, New Zealand and Singapore, which was valued at $87.9 million. The company recorded an after-tax gain of $2.6 million from the sale.
The company said it used the sale of the foreign business unit to help reduce its debt by 37 percent, or $272.7 million for the quarter. The company also took a number of inventory and cost-control steps during the quarter, improving its operating cash flow by $195.7 million.
Borders made several other changes during the quarter as part of its restructuring, including opening four new Borders superstores in the U.S. and bringing its Web site, which generated $7.4 million in sales during the quarter, in house.
“It’s a really tough retail environment out there, but we managed to improve our results,” Jones said.
The company is scheduled to hold a conference call Wednesday to discuss the results with investors.
