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Bookseller Barnes & Noble, Inc. (BKS) reported a decline in profit for the second quarter, hurt mainly by lower sales at its Barnes & Noble stores, the books division, due to weak retail traffic. Further, the New York-based Fortune 500 company said it expects a drop in third-quarter comparable store sales, but maintained its fiscal 2009 forecast for comparable store sales decline. Investors seem to be relatively even on the announcement, as the stock remains around the $20.50, where it has been most of the month.

Online Bookseller Amazon.com Inc. (AMZN) in late July reported a 10% decline in its second-quarter profit to $142 million or $0.32 per share, mainly hurt by a settlement with Toysrus.com. The Seattle, Washington-based company's net sales increased 14% to $4.65 billion from $4.06 billion last year, while excluding the negative impact from foreign exchange rates, net sales would have grown 20%. The company was trading well in the $90s when its earnings brought the stock back to earth. It flirted with $80 before settling in around $85.

Books-A-Million Inc. (BAMM), meanwhile was trading in the $11 range when its earnings announcement catapulted the stock to nearly $15, while Borders Group, Inc. (BGP) has plummetted post-earnings from nearly $3.75 to under $3 at some points.

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Commenting on the second-quarter results, Steve Riggio, chief executive officer of Barnes & Noble, stated, "Due to strong expense management and improved gross margins we achieved earnings per share near the high-end of guidance. While the decline in retail traffic continues to be the principal impediment to our top line, we do offer our customers the ability to shop with us online, where sales were slightly above last year."

Net income attributable to the company was $12.267 million or $0.21 per share, compared to $15.411 million or $0.27 per share in the same quarter of last year.

Among peers, online retailer Amazon.com Inc. (AMZN) in late July reported a 10% decline in its second-quarter profit to $142 million or $0.32 per share, mainly hurt by a settlement with Toysrus.com. The Seattle, Washington-based company's net sales increased 14% to $4.65 billion from $4.06 billion last year, while excluding the negative impact from foreign exchange rates, net sales would have grown 20%.

Smaller rivals Books-A-Million Inc. (BAMM) is slated to release its second quarter results on Thursday, while Borders Group, Inc. (BGP) would come out with its second-quarter results on Tuesday, August 25

BKS noted that the latest quarter results included a cash benefit of $4 million or $0.07 per share, resulting from an insurance settlement.

Excluding the benefit, second-quarter net earnings would have been $0.14 per share, in the higher end of the company's guidance of $0.05 to $0.15 per share.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly sales dropped 5% to $1.16 billion from $1.22 billion in the prior year quarter, however, was in line with Wall Street analysts' estimate of $1.16 billion.

In Barnes & Noble store, the company's books division, sales decreased 5% to $1.0 billion, with a 6.9% drop in comparable store sales, within the forecast range of a decline of 5% to 7%. Barnes & Noble.com sales were $102 million for the quarter, a 2% increase compared to the prior year.

During the quarter, the company said, its bestselling titles included Janet Evanovich's Finger Lickin' Fifteen, Kathryn Stockett's The Help, Daniel Silva's The Defector, Sophie Kinsella's Twenties Girl, and Dick Morris's Catastrophe.

Second-quarter gross profit declined to $355.86 million from last year's $374.40 million, while the company said its gross margin was better than expected.

During the second quarter, the company opened one Barnes & Noble store and closed three Barnes & Noble store and one B. Dalton store. As of August 1, 2009, the company operated 724 Barnes & Noble stores and 50 B. Dalton stores.

In the preceding first quarter, Barnes & Noble had reported a wider net loss attributable to Barnes & Noble of $2.7 million or $0.05 per share, as book sales declined from the year-ago quarter. Net loss from continuing operations was $2.04 million or $0.04 per share, compared to a loss of $566 thousand or $0.01 per share a year ago. Quarterly sales dipped 4% year-over-year to $1.11 billion, and Barnes & Noble store sales decreased 3.5% to $989 million, with comparable store sales declining 5.7%.

For the first six months of fiscal 2009, Barnes & Noble's net income attributable to the company fell to $9.57 million or $0.17 per share from $13.19 million or $0.22 per share in the previous year. Net income from continuing operations attributable to Barnes & Noble was $10.23 million or $0.18 per share, lower than prior year's $16.21 million or $0.27 per share a year earlier. First-half sales fell to $2.26 billion from $2.38 billion last year.

In addition, the company also announced that its Board has declared a quarterly cash dividend of $0.25 per share payable on September 30, 2009 to stockholders of record on September 9, 2009.

Looking ahead, for the third quarter, Barnes & Noble expects comparable store sales at Barnes & Noble stores to decline 1% to 3%. The company continues to expect full-year comparable store sales to decline 3% to 5%.

Riggio added, "We remain focused on working capital management, which resulted in solid free cash flow and no borrowings on our credit facility for the second quarter."

Further, Barnes & Noble said it plans to issue updated guidance for the balance of the year at the time of the completion of its recently announced acquisition of Barnes & Noble College Booksellers, which is expected on or about October 1, 2009.

BKS is currently trading at $21.13, up $0.18 or 0.86%.

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