Barnes & Noble Education has performed so poorly that an uptick in profits for their fiscal second quarter — even as college bookstore and textbook sales comps fell — has lifted the stock. With net income for the back-to-school quarter of $48.4 million, compared to $29.3 million, the stock rose almost 25 percent in early trading on Tuesday. Even with that, shares are still down by about a third for the year, and after spending $58.5 million for Student Brands and $174 million for MBS Textbook Exchange during the year, the improved market cap is still only about $365 million.
Barnes & Noble College store sales comps were down 4.4 percent, mostly because textbook sales comps were down 5 percent. Sales of $887 million were up $116 million — which sounds good except that the MBS and Student Brands acquisitions contributed $139.4 million in sales. All of the earnings gain and then some ($21.6 in EBITDA) also came from the acquisitions.