Barnes & Noble Education(BNED) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total sales for Q4 2019 were $334.4 million, a decrease of$ 23.3 million or 6.5% compared to the prior year [45] - Consolidated gross margin rate for the quarter was 35.1%, down from 35.9% in the prior year [48] - Selling and administrative expenses in Q4 decreased by $7.6 million or 7.2% compared to the prior year [50] - The company recognized a non-cash goodwill impairment loss of$ 49.3 million due to the carrying values exceeding fair values [52] Business Line Data and Key Metrics Changes - Retail segment sales decreased by $15.2 million, while wholesale segment sales decreased by$ 5.8 million in Q4 [45] - Comparable store sales in the retail segment increased by 0.9% in Q4, compared to a 2.0% increase in the prior year [46] - DSS sales were $5.5 million in Q4, slightly down from$ 5.6 million in the prior year [48] Market Data and Key Metrics Changes - The wholesale segment's net sales for Q4 were $14.1 million, a decrease of 5.8% [47] - The wholesale segment experienced a full-year decline of 13.5%, primarily due to lower demand [47] Company Strategy and Development Direction - The company is focusing on a digital pivot, with significant investments in digital offerings such as bartleby [7][11] - A new courseware adoption and insights portal is set to enhance institutional sales capabilities [10][30] - The company aims to grow its general merchandise business and improve e-commerce capabilities [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new unified sales teams and their impact on net new store sales [17] - The company anticipates continued growth in bartleby subscriptions and general merchandise sales [36] - Management acknowledged challenges in the retail environment but remains confident in the company's unique assets and strategic model [41][42] Other Important Information - The company operates 1,448 college and university bookstores, with plans to open 78 additional stores in fiscal 2020 [58] - Fiscal 2020 adjusted EBITDA is expected to be between$ 90 million and $100 million [59] Q&A Session Summary Question: Outlook for next year and revenue guidance - Management decided not to provide revenue guidance due to significant changes in the business model and focus on margin and cash flow instead [62] Question: Growth trajectory for bartleby - Management is optimistic about content coverage and subscriber growth, with plans to leverage the upcoming freshman class [64][67] Question: Retention and utilization of bartleby subscribers - Typical usage patterns have emerged, with engagement peaking during midterms and finals [71] Question: Competitive positioning of new retail operating segment - The company has expanded its sales team and is taking a proactive approach to target new business [72][75] Question: Store openings and market environment - There is a combination of self-operated bookstores seeking solutions and competitive wins contributing to store openings [81]