Barnes & Noble's Second Quarter Call

Last Thursday morning, the executives of Barnes & Noble met on a conference call with the security analysts who follow their stock to discuss the 2nd Quarter results for 2008. I listened to the call from my desk at the university. I was particularly interested in hearing about the resignation of the CEO of B&N.com, who had quit a few days earlier.

According to last Tuesday's Publishers Weekly:

Marie Toulantis, who has been associated with Barnes & Noble.com since 1999 and has led the company for more than six years, has resigned as CEO. Barnes & Noble is not directly replacing Toulantis and her duties will be divided up between Tom Burke, who is executive v-p of e-commerce for B&N.com, and Kevin Frain, B&N.com CFO who has added the title of executive v-p of e-commerce operations.

Because of Toulantis' resignation, I listened to the entire call.

And no one mentioned her resignation once. Not Steve Riggio, the B&N CEO; not Joseph Lombardi, the CFO; and not any of the analysts asking questions.

To say I was torqued is an understatement.

There were some interesting points made. Publishers Lunch taught me last year that I could find the transcripts of these conference calls on Seeking Alpha here.

I've pulled some excerpts from the call that I found noteworthy. The speaker is Steve Riggio, the B&N CEO. In the first excerpt, he is talking about the growth of the B&N Internet business:

Our Internet sales were clearly a bright spot in the quarter with a 13.9% growth excluding the effect of Harry Potter. I will note that this is the seventh straight quarter of growth for our Internet business with double digit growth in 2007 and for the first half of 2008. Traffic to the site is up, conversions are up and we continue to enhance the site from usability as well as a content perspective.

[Note from Maya: But not a word about the resignation of the CEO of that business line. Grrrr]

We've also begun to expand our content offerings to include products offered only online enabling us to leverage the eCommerce infrastructure we have built.

If you look at all of the business that we transact in our stores and online, and you exclude the effect of Harry Potter, and the music business, our comp sales are actually up a freckle about .6% overall. So, all in all we're very pleased with the results of the quarter . . .

Riggio went on to talk about their membership program and the discounts associated with it:

Our member program is seven years old and we continue to experiment with a variety of different offers of different discounts at every level. So, is it typical of what we've been testing? Yes and we will continue to test. But, the message is that overall the amount of discounts that we give over and above the everyday discounts has been declining because we feel that we don't need to do that. Customers are coming back by the virtue of the fact that they're members . . .

Finally, Riggio talked about B&N's digital productions:

We began selling digital magazines earlier this year on the website. We're very encouraged by what we're seeing there and like with all new strategic developments of any type, we will announce it on the day that we launch but we can't really make any further comments on anything that we will be doing or might be doing, it's just so highly strategic . . .

There's the indication that we began selling digital magazines and the fact that we're very pleased with what we're seeing there points to a small slice of the arena. We do not believe that eBooks is the total universe of digital products that will be sold in the marketplace. It is a subset of a much larger arena of digital content in many ways. So, we're looking at the entire arena.

Seeking Alpha permits visitors to their site to quote up to 400 words as long as they give attribution and the link here. I've quoted 378 words.