OPERATOR: Good day, everyone and welcome this Barnes & Noble fourth quarter 2008 earnings results conference call. As a reminder, today's conference is being recorded.
At this time for opening remarks and introductions, I would like to turn the call over to, the Chief Financial Officer, Mr. Joseph Lombardi. Please go ahead, sir.
JOSEPH LOMBARDI, CFO, BARNES AND NOBLE: Good morning and welcome to Barnes & Noble fourth quarter and year end 2008 earnings conference call. Joining us today are Steve Riggio, Mitchell Klipper, William Lynch and other members of the Senior Management team. Before I begin, I would like to remind you that this call is covered by the Safe Harbor disclosure contained in our public documents and is the property of Barnes & Noble. It is not for rebroadcast or use by any other party without the prior written consent of Barnes & Noble.
This morning before the marked opened we released our results for the fourth quarter and full year ended January 31st, 2009. Consolidated sales totaled $1.632 billion for the quarter and $5.122 billion for the full year. Full year consolidated sales decreased 3% compared to last year's 4.6% increase. Sales at Barnes $ Noble stores were $4.525 billion for the year, down 2.7% over a year ago. Comparable store sales declined 7.3% for the quarter in line with guidance and slightly better than the negative 7.7% reported in our holiday release. Store traffic was down throughout the quarter continuing to trend from the third quarter and was the driving factor in our comparable stores sales performance. Our average ticket declined moderately. For the full year, comparable sales of Barnes & Nobles stores declined 5.4% in line with guidance.
Sales at barnesandnobleinc.com were $466 million for the year, a 1.3% comparable decline compared to last year's 13.4% increase. The negative 11% comparable store sales decline reported for the holiday season improved to negative 10.4% for the full quarter. Despite the comparable store sales decline and deleveraging against fixed occupancy cost, gross margins were flat in the fourth quarter as those declines were offset by lower distribution costs and reduced markdowns. For the full year, gross margins increased 50 basis points despite a negative 5.4% comparable store sales decline. Selling and administrative expenses declined slightly compared to last year's fourth quarter. For the full year, selling and administrative expenses increased only 1.4% excluding a sales tax settlement recorded in the first quarter.
As we noted in our third quarter conference call, in this retail environment we have been managing those parts of our business we can control with the focus toward maintaining an excellent and sound financial condition. For example the gross margin improvement this year was due to our continuous pursuit of supply chain efficiencies and promoting profitable top line sales. Controlling and cutting expenses where appropriate was a priority for 2008 and also for 2009 given the sales environment. What is noteworthy is how our entire store organization maintained and controlled store expenses particularly store payroll. As many of you know, our stores are staffed with a sales per hour target. Even with the sales decline in the second half of this year, our stores hit their original targeted payroll goals. This was a primary factor in essentially flat expenses this quarter despite 13 net new store openings year-over-year.
As previously announced and also noted in today's release, we had two fourth quarter charges for severance payments and a write down of our investment in Calendar Club, which is ultimately sold after the year end. Both the minimal earnings of Calendar Club and the write down of our investment have been classified as discontinued operations on our financial statements. Excluding those two charges, for the full year the Company reported earnings per share of $1.54 in line with our guidance which called for an earnings range of $1.30 to $1.60 per share. At quarter end, the Company's balance sheet and financial condition remain in excellent shape. Inventories declined $155 million or 11% compared to last year despite the sales shortfall and 13 net new stores. As a result of the better than expected working capitol performance, the Company generated operating free cash flows of $150 million, higher than our forecast for $50 million to $75 million. Company's capital expenditures for 2008 were $192 million in line with guidance. We began the year with about $335 million in cash. During the first part of the year we acquired 6.6 million shares of BKS for $201 million, we issued $52 million in dividends and we ended the year with $280 million in cash and no debt.
And now for 2009 guidance. While it is difficult to forecast sales with any certainty in the current retail environment, based upon current trends, the Company …