Dive Brief:

• Barnes & Noble on Tuesday reported that second quarter total sales fell 2.5% year over year as store comps fell 1.4%, its best quarterly performance since the fourth quarter of fiscal 2016, according to a company press release.

• There were improvements in other measures as well. Thanks to cost cuts, the retailer's consolidated operating loss in the quarter shrank to $26.8 million from $52.2 million in the year-ago quarter, and its loss in consolidated earnings before interest, tax, depreciation and amortization shrank significantly to $2.3 million from last year's $25 million loss.

• The bookseller's consolidated net loss in the quarter reached $27.4 million from last year's $30.1 million loss as gross profit fell to $225.3 million, with Nook gross profit undermining the retail side's gross profit rise.

Dive Insight:

Barnes & Noble's comp sales achievement offers "some small crumbs of comfort," according to GlobalData Retail Managing Director Neil Saunders.

"This is a poor set of numbers from Barnes & Noble which reflects the company's inability to come up with a proposition that delivers what consumers want," he said in comments emailed to Retail Dive. "As challenging as the business model might be, we are very critical of Barnes & Noble for doing little to help itself. While the business has taken some steps to evolve its offer, it has been rather static and unwilling to try bold new things. Everyday execution is also poor, which puts it at a major disadvantage."

Barnes & Noble founder Leonard Riggio is back at the helm after the bookseller in July let go yet another chief executive, Demos Parneros, who was fired for allegedly violating company policy, a claim Parneros has gone to court to deny. The company has now had five chief executives in as many years. 

In his statement on Tuesday, Riggio highlighted the company's "significant" same-store sales improvement and offered a careful view of the coming holiday quarter. "While we cannot predict the outcome of the holiday, we are putting our full effort behind our holiday plans, including launching a new ad campaign," he said. "We expect this to lead to continued sales improvement during the holiday period."

That campaign, "Nobody Knows Books Like We Do," centers on the company's core proposition, something of a departure from recent seasons when it touted its non-book offerings like music and coloring books. The ads started Nov. 9, slated for 14 major media markets including Boston, New York, San Diego, St. Louis and more, and attached to showings of the movies Fantastic Beasts: The Crimes of Grindelwald, Robin Hood, Spider-Man: Into the Spider-Verse and Mary Poppins Returns, according to another release, which was emailed to Retail Dive.

But its wide assortment remains, and it's taking up room and dragging profits, Saunders warned. "[T]he approach of adding categories like gifts, toys and simple gadgets to stores...should provide a sensible counterpoint to book sales, where the company remains under pressure from the rise of online," he said. "However, merchandising is poor and all too often the company simply throws items onto shelves with little thought to the presentation. As a result, Barnes & Noble's perception as a place with things to offer other than books remains weak."

Its Starbucks partnership is similarly unhelpful. And its dedication to its Nook e-book device and business is mysterious, Saunders also said. "Sales are still declining and profit remains elusive, yet Barnes & Noble still clings to the vestiges of this failed initiative," he said of the Nook. "We see very little future for this part of the business and maintain our view that it needs to be shut."

The company has "a lot to prove" over the holidays, Saunders warned, adding that drastic measures may be warranted. "Over the medium term, we believe a sale of the business or moves to take it private may materialize," he said. "These won't solve the underlying issues, but they may breath[e] fresh impetus into a rather sluggish business."