Can Barnes & Noble Count on the Nook?

Comparatively, Barnes and Noble’s retail book sales are on a downswing. Overall revenue fell 2.9 percent to $996 million, pushed down by flat same-store sales and decreasing online sales. Even revenue from its college bookstore chain was muted, increasing only 0.4 percent from the year-ago quarter.

While Barnes & Noble showed some weaknesses, the results are a significant improvement from the year-ago quarter. For the three-month period, the company reported income of $2.2 million compared to a loss of $6.6 million a year ago.

CHEAT SHEET Analysis: Are These Earnings a Positive Catalyst for Barnes & Noble’s Stock?

One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’ stock. Concerns over the Nook’s future profitability caused shares to fall 11.15 percent, to $14.26, after the report was released. “Barnes & Noble is holding on to market share at the expense of profit,” Morningstar analyst Peter Wahlstrom told Reuters. “The investments to keep pace with rivals will make it hard for the Nook unit to turn a profit.”

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