Books-A-Million, Inc. (BAMM)

NetscribeRetail (53.57) Submitted: 6/06/07 1:21 AM : Start Price: $13.23 BAMM Score: -41.23

Driven by an improving media environment which is highlighted by recent Oprah's endorsement of The Secret, Books-A-Million is showing signs of improvement. Company’s several categories performed well in recent past with new age, teen, graphic novels and hardcover fiction showing particular strength.





Net sales for the recent quarter surged by 2.1% to $116.3 million, but comparable store sales weakened by 0.5%, which is still an improvement over the fourth quarter. Net profit rose by 40% to $2.11 million on account of leveraging of cost of sales, selling and administrative expenses, lower depreciation charges in addition to interest income. Besides the management has declared a regular quarterly cash dividend of $0.09, which ensures its concern in regard to shareholder’s wealth creation.





The company recently reported opening of a location in Colonial Pinnacle Craft Farms in Gulf Shores, Alabama, and a location in Colonial Promenade in Fultondale, Alabama. This will help the company to expand its operation and thereby support the top-line. The nation’s leading book retailers did not provide any guidance for the future but as it enters the second quarter, it expects a strong summer movie lineup as well as the publication of Harry Potter and The Deathly Hallows. Its recent performance has not been very convincing and has already hampered the share price significantly. Its price to earning multiple is way below the industry level which proves that the prior results are already discounted and the company can now look forward to the future and reap the sowings.

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