Barnes & Noble Education(BNED) - 2025 Q2 - Quarterly Report

Business Operations - Barnes & Noble Education operates 1,162 physical and virtual bookstores, serving over 5.7 million students[109]. - The number of campus stores increased to 183 from 157, representing a 17% growth[117]. - Estimated enrollment for the Fall 2024 semester is projected at 925,000, up 16% from 800,000 in Fall 2023[117]. - Enrollment trends showed an increase year-over-year in Fall 2023 and Spring 2024, particularly at community colleges[125]. - The company is focusing on scaling the number of schools adopting the First Day Complete strategy in Fiscal 2025 and beyond[128]. Financial Performance - Total sales for the 13 weeks ended October 26, 2024, were $602,122, a decrease of 1.9$610,379 for the same period in 2023[134]. - Gross profit for the 13 weeks ended October 26, 2024, was $137,643, an increase of 1.0$136,242 in the prior year[134]. - Net income from continuing operations for the 13 weeks ended October 26, 2024, was $49,735, compared to a net income of$24,854 for the same period in 2023[134]. - Adjusted EBITDA for the 13 weeks ended October 26, 2024, was $65,958, up from$51,080 in the same period last year[134]. - Total revenue for Q2 fiscal year 2025 decreased by 1.4%, or $8.3 million, to$602.1 million, primarily due to closures of underperforming stores[139]. - Year-to-date revenue for fiscal year 2025 decreased by $9.0 million, or 1.0$865.6 million, also driven by store closures[141]. - The company reported an operating loss of $(35.4) million for the 26 weeks ended October 26, 2024, compared to an operating loss of$(5.9) million in the same period of 2023[164]. Sales and Revenue Growth - The BNC First Day Complete program generated sales of $166.2 million for the 13 weeks ended October 26, 2024, a 22$136.4 million in the same period last year[117]. - Total BNC First Day sales reached $235.4 million for the 13 weeks ended October 26, 2024, an 18$199.2 million in the prior year[117]. - The First Day Complete model drives greater unit sales and sell-through for bookstores, addressing market demands for reduced pricing and improved student outcomes[116]. - The First Day Complete and First Day programs are expected to continue driving market share and revenue growth, with many institutions adopting these programs in Fiscal 2024[128]. - BNC First Day programs contributed to a $55.7 million, or 21$72,940 for the 13 weeks ended October 26, 2024, from $85,961 in the prior year[138]. - Selling and administrative expenses decreased by$13.0 million, or 15.1%, to $72.9 million for the 13 weeks ended October 26, 2024, primarily due to cost savings initiatives[157]. - Total cost of sales for the 13 weeks ended October 26, 2024, was$464.5 million, or 77.1% of sales, down from 77.7% in the prior year[153]. Liquidity and Financing - The company completed various financing transactions, including a $40 million At-the-Market sales agreement, to enhance liquidity and support growth initiatives[118]. - As of October 26, 2024, the company had$28.9 million in cash on hand, including $14.9 million of restricted cash[176]. - Cash flows used in operating activities from continuing operations were$(96.6) million for the 26 weeks ended October 26, 2024, compared to $(47.2) million for the same period in 2023, an increase of$49.4 million[179]. - Cash flows provided by financing activities were $102.7 million for the 26 weeks ended October 26, 2024, compared to$41.2 million in the prior year, a net change of $61.5 million[182]. - The company may need to raise additional funds through public or private financing if available funds are insufficient for future activities[176]. Market Challenges - The company is experiencing increased competition from alternative sources for course materials, impacting traditional distribution channels[126]. - The broader macro-economic global supply chain issues may impact the company's ability to source school supplies and general merchandise[126]. - The company closed 119 stores during the 26 weeks ended October 26, 2024, with an estimated net annual sales impact of$(67) million[144].