Barnes & Noble Education, Inc. (NYSE:BNED), one of
the largest contract operators of bookstores on college and
university campuses across the United States and a leading provider
of digital education services, today reported sales and earnings
for the second quarter for fiscal 2017.
Financial highlights for the second quarter 2017 and fiscal
year to date 2017:
- Second quarter sales of $770.7 million
increased 2.0%, as compared to the prior year period; year to date
sales of $1,009.9 million increased 1.5% as compared to the prior
year period.
- Both second quarter and year to date
comparable store sales decreased 2.9%.
- Second quarter GAAP net income of $29.3
million, as compared to $33.4 million in the prior year period;
year to date net income of $1.4 million, as compared to $6.5
million in the prior year period.
- Second quarter non-GAAP Adjusted EBITDA
of $70.4 million, a decrease of $2.3 million, as compared to the
prior year period; year to date non-GAAP Adjusted EBITDA of $33.9
million, a decrease of $3.6 million, as compared to the prior year
period.
- Second quarter non-GAAP Adjusted
Earnings of $29.7 million, as compared to $33.4 million in the
prior year period; year to date non-GAAP Adjusted Earnings of $3.8
million, as compared to $6.5 million in the prior year period.
Operational highlights for the second quarter 2017:
- Opened 1 new store in the quarter,
bringing the total year to date new store openings to 34. The
Company now operates 771 locations as of October 29, 2016. The
Company expects to open 2 additional stores in the second half of
the year bringing the total estimated annual sales of new stores to
$118 million.
- Established price matching program in
over 400 stores.
- Launched Barnes & Noble Education
Courseware, making it easier for faculty to use Open Educational
Resources (OER) and helping to ensure access to the most affordable
course materials for students. Offering includes 10 digital general
education courses through campus bookstores and the LoudCloud
platform.
“Though our new business wins enabled us to grow total sales,
comparable store sales declined as a result of lower enrollments
and a softer retail environment,” said Max J. Roberts, Chief
Executive Officer, Barnes & Noble Education. “Since we
experienced lower textbook and general merchandise sales on our
campuses, we are continuing the roll out of our price matching
program and adjusting our promotional strategy in a targeted and
disciplined manner to reflect current market conditions, and are
continuing our cost management initiatives across the company.
Consistent with this performance, we have revised our financial
guidance to reflect the possibility that general merchandise sales
remain softer than expected this fiscal year.”
Mr. Roberts continued, “In the second quarter, we successfully
opened a number of campus bookstores for fall rush, and our
recently launched price matching program resulted in more student
engagement, helping to mitigate the impact of the anticipated
negative enrollment trends in higher education. We are expanding
the program and expect to have price match in almost all of our
stores by spring rush. As schools continue to outsource bookstore
operations, we remain well-positioned to deepen our partnerships
and expand market share through our complete offering of
affordable, accessible textbooks and course materials, including
our recently launched digital courseware and analytic
solutions.”
Second Quarter 2017 Results
Results for the 13 and 26 weeks of fiscal 2017 and fiscal 2016
are as follows:
$ in millions 13 and 26 Weeks Selected Data
(unaudited)
13 WeeksQ2
2017
13 WeeksQ2
2016
26
Weeks2017
26 Weeks
2016
Total Sales $770.7 $755.9 $1,009.9 $994.8 Net Income $29.3 $33.4
$1.4 $6.5
Non-GAAP(1)
Adjusted EBITDA $70.4 $72.7 $33.9 $37.5 Adjusted Earnings $29.7
$33.4 $3.8 $6.5
(1) These non-GAAP financial measures have been reconciled in
the attached schedules to the most directly comparable GAAP measure
as required under SEC rules regarding the use of non-GAAP financial
measures.
Second quarter sales of $770.7 million increased $14.8 million,
or 2.0%, as compared to the prior year period. This increase was
attributable to new store growth.
Comparable store sales decreased 2.9% for the quarter
representing approximately $22.4 million in revenue. The decrease
is primarily attributable to textbook sales, which were down 3.3%
compared with a decrease of 4.2% in the prior year period and a
decrease in general merchandise sales of 1.3% compared with an
increase of 1.3% in the prior year period.
Second quarter net income was $29.3 million, or $0.63 per
diluted share, compared to net income of $33.4 million, or $0.69
per diluted share, in the prior year period. The current year’s
fiscal quarter has 46.6 million diluted shares outstanding, while
the prior year period had 48.6 million diluted shares outstanding.
The Company reported non-GAAP Adjusted Earnings of $29.7 million
during the quarter, compared with $33.4 million in the prior year
period.
The Company’s Adjusted EBITDA was $70.4 million for the quarter,
as compared to $72.7 million in the prior year period, due
primarily to lower comparable store sales.
Outlook
For fiscal year 2017, the Company expects total sales to grow by
3.0% to 4.0%, while comparable store sales are expected to decrease
by 2.0% to 3.0% compared to the prior year. The Company expects
Adjusted EBITDA to increase on a percentage basis in the mid-single
digits compared with the prior year and expects capital
expenditures to be approximately $40 million.
Conference Call
A conference call with Barnes & Noble Education, Inc. senior
management will be webcast at 10:00 a.m. Eastern Time on Tuesday,
December 6, 2016 and can be accessed at the Barnes & Noble
Education, Inc. corporate website at www.bned.com.
Barnes & Noble Education, Inc. expects to report fiscal 2017
third quarter results on or about March 7, 2017.
ABOUT BARNES & NOBLE EDUCATION, INC.
Barnes & Noble Education, Inc. (NYSE: BNED), one of
the largest contract operators of bookstores on college and
university campuses across the United States and a leading provider
of digital education services, enhances the academic and social
purpose of educational institutions. Through its Barnes & Noble
College subsidiary, Barnes & Noble Education serves more than 5
million college students and their faculty through its 771 stores
on campuses nationwide, delivering essential educational content
and tools within a dynamic retail environment. Through its Digital
Education subsidiary, Barnes & Noble Education offers a suite
of digital software, content and services that include a
sophisticated digital learning management platform that has
competency-based features, analytics capabilities, courseware
offerings and a digital eTextbook reading product. Barnes &
Noble Education acts as a strategic partner to drive student
success; provide value and support to students and faculty; and
create loyalty and improve retention, all while supporting the
financial goals of college and university partners.
General information on Barnes & Noble Education, Inc. can be
obtained by visiting the Company's corporate website:
www.bned.com.
Forward-Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 and information relating to Barnes & Noble Education
and its business that are based on the beliefs of the management of
Barnes & Noble Education as well as assumptions made by and
information currently available to the management of Barnes &
Noble Education. When used in this communication, the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“will,” “forecasts,” “projections,” and similar expressions, as
they relate to Barnes & Noble Education or the management of
Barnes & Noble Education, identify forward-looking statements.
Moreover, Barnes & Noble Education operates in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for the management of Barnes &
Noble Education to predict all risks, nor can Barnes & Noble
Education assess the impact of all factors on its business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements Barnes & Noble Education may make.
In light of these risks, uncertainties and assumptions, the future
events and trends discussed in this press release may not occur and
actual results could differ materially and adversely from those
anticipated or implied in the forward-looking statements.
Such statements reflect the current views of Barnes & Noble
Education with respect to future events, the outcome of which is
subject to certain risks, including, among others: general
competitive conditions, including actions the Company’s competitors
may take to grow their businesses; a decline in college enrollment
or decreased funding available for students; decisions by colleges
and universities to outsource their bookstore operations or change
the operation of their bookstores; the general economic environment
and consumer spending patterns; decreased consumer demand for the
Company’s products, low growth or declining sales; restructuring of
the Company’s digital strategy may not result in the expected
growth in the Company’s digital sales and/or profitability; risk
that digital sales growth does not exceed the rate of investment
spend; the performance of the Company’s online, digital and other
initiatives, integration of and deployment of, additional products
and services, and further enhancements to Yuzu® and any future
higher education digital products, and the inability to achieve the
expected cost savings; the Company’s ability to successfully
implement the Company’s strategic initiatives including the
Company’s ability to identify and execute upon additional
acquisitions and strategic investments; technological changes; the
Company’s international expansion could result in additional risks;
the Company’s ability to attract and retain employees; changes to
payment terms, return policies, the discount or margin on products
or other terms with the Company’s suppliers; risks associated with
data privacy, information security and intellectual property;
trends and challenges to the Company’s business and in the
locations in which the Company has stores; non-renewal of contracts
and higher-than-anticipated store closings; disruptions to the
Company’s computer systems, data lines, telephone systems or supply
chain, including the loss of suppliers; work stoppages or increases
in labor costs; possible increases in shipping rates or
interruptions in shipping service, effects of competition; obsolete
or excessive inventory; product shortages; changes in law or
regulation; the amount of the Company’s indebtedness and ability to
comply with covenants applicable to any future debt financing; the
Company’s ability to satisfy future capital and liquidity
requirements; the Company’s ability to access the credit and
capital markets at the times and in the amounts needed and on
acceptable terms; adverse results from litigation, governmental
investigations or tax-related proceedings or audits; changes in
accounting standards; challenges to running the Company
independently from Barnes & Noble, Inc. following the Spin-Off;
the potential adverse impact on the Company’s business resulting
from the Spin-Off; and the other risks and uncertainties detailed
in the section titled “Risk Factors” in the Barnes & Noble
Education Annual Report on Form 10-K for the year ended April 30,
2016 filed with the Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent
written and oral forward-looking statements attributable to Barnes
& Noble Education or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this
paragraph. Barnes & Noble Education undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise after
the date of this press release.
EXPLANATORY NOTE
On February 26, 2015, Barnes & Noble, Inc.
(“Barnes & Noble”) announced plans for the complete legal and
structural separation of Barnes & Noble Education, Inc. (the
“Company”) from Barnes & Noble (the “Spin-Off”). Under the
Separation and Distribution Agreement between Barnes & Noble
and the Company, Barnes & Noble distributed all of its
equity interest in the Company, consisting of all of the
outstanding shares of the Company's Common Stock, to
Barnes & Noble’s stockholders on a pro rata basis.
On July 14, 2015, Barnes & Noble approved the final
distribution ratio and declared a pro rata dividend of the
outstanding shares of the Company's Common Stock, par value $0.01
per share ("Common Stock"), to Barnes & Noble’s existing
stockholders. The pro rata dividend was made on August 2, 2015 to
the Barnes & Noble stockholders of record (as of July 27,
2015). Each Barnes & Noble stockholder of record received a
distribution of 0.632 shares of the Company's Common Stock for each
share of Barnes & Noble common stock held on the record date.
Following the Spin-Off, Barnes & Noble does not own any
equity interest in the Company.
On August 2, 2015, the Company completed the legal separation
from Barnes & Noble, at which time the Company began to operate
as an independent publicly-traded company. The Company's Common
Stock began to trade on a “when-issued” basis on the NYSE under the
symbol “BNED WI” beginning on July 23, 2015. On August 3, 2015,
when-issued trading of the Company's Common Stock ended, the
Company's Common Stock began “regular-way” trading under the symbol
“BNED.”
The results of operations for the 13 weeks ended August 1, 2015
reflected in the Company's condensed consolidated financial
statements are presented on a stand-alone basis since the Company
was still part of Barnes & Noble, Inc. until the consummation
of the Spin-Off on August 2, 2015, and the results of operations
for the 13 and 26 weeks ended October 29, 2016 and the 13 weeks
ended October 31, 2015 reflected in the Company's condensed
consolidated financial statements are presented on a consolidated
basis as the Company became a separate consolidated entity.
BARNES & NOBLE EDUCATION, INC.
AND SUBSIDIARIESCondensed Consolidated Statements of
Operations(In thousands, except per share
data)(Unaudited)
13 weeks ended 26 weeks ended
October 29,2016
October 31,2015
October 29,2016
October 31,2015
Sales: Product sales and other $ 697,927 $ 684,006 $ 915,663 $
902,722 Rental income 72,744 71,858
94,245 92,125 Total sales
770,671 755,864 1,009,908
994,847 Cost of sales: Product and other cost of sales
554,498 537,380 732,492 712,289 Rental cost of sales 44,659
43,363 58,489 55,893
Total cost of sales 599,157 580,743
790,981 768,182 Gross profit
171,514 175,121 218,927
226,665 Selling and administrative expenses 101,767
102,439 187,231 189,123 Depreciation and amortization expense
12,987 13,169 25,908 26,269 Restructuring costs (a) —
— 1,790 — Operating
income 56,760 59,513 3,998 11,273 Interest expense, net 630
554 1,296 557
Income before income taxes 56,130 58,959 2,702 10,716 Income tax
expense 26,841 25,558 1,329
4,233 Net income $ 29,289 $ 33,401
$ 1,373 $ 6,483 Earnings per common
share: Basic $ 0.63 $ 0.69 $ 0.03 $ 0.14 Diluted $ 0.63 $ 0.69 $
0.03 $ 0.14 Weighted average common shares outstanding: Basic
46,170 48,207 46,259 44,816 Diluted 46,593 48,562 46,652 45,023
(a) For additional information, see Note (a) in the Non-GAAP
disclosure information of this Press Release.
Non-GAAP
Disclosures: (a) Adjusted Earnings $ 29,683 $ 33,401 $ 3,798 $
6,483 Adjusted EBITDA $ 70,391 $ 72,682 $ 33,867 $ 37,542
(a) For additional information, see the
Non-GAAP disclosure information of this Press Release.
13 weeks ended
26 weeks ended
October 29,2016
October 31,2015
October 29,2016
October 31,2015
Percentage of sales: Sales: Product sales and other 90.6 %
90.5 % 90.7 % 90.7 % Rental income 9.4 % 9.5 %
9.3 % 9.3 % Total sales 100.0 % 100.0 %
100.0 % 100.0 % Cost of sales: Product and other cost of
sales (a) 79.4 % 78.6 % 80.0 % 78.9 % Rental cost of sales (a)
61.4 % 60.3 % 62.1 % 60.7 % Total cost
of sales 77.7 % 76.8 % 78.3 % 77.2 %
Gross profit 22.3 % 23.2 % 21.7 % 22.8
% Selling and administrative expenses 13.2 % 13.6 % 18.5 % 19.0 %
Depreciation and amortization expense 1.7 % 1.7 % 2.6 % 2.6 %
Restructuring costs — % — % 0.2 % — %
Operating income 7.4 % 7.9 % 0.4 % 1.2 % Interest expense, net
0.1 % 0.1 % 0.1 % 0.1 % Income before
income taxes 7.3 % 7.8 % 0.3 % 1.1 % Income tax expense 3.5
% 3.4 % 0.1 % 0.4 % Net income 3.8 %
4.4 % 0.2 % 0.7 % (a) Represents the
percentage these costs bear to the related sales, instead of total
sales.
BARNES & NOBLE EDUCATION, INC.
AND SUBSIDIARIESCondensed Consolidated Balance
Sheets(In thousands, except per share
data)(Unaudited)
October 29,2016
October 31,2015
ASSETS Current assets: Cash and cash equivalents $ 176,578 $ 88,649
Receivables, net 93,250 91,383 Merchandise inventories, net 401,338
431,023 Textbook rental inventories 86,704 83,846 Prepaid expenses
and other current assets 8,083 6,304 Total current
assets 765,953 701,205 Property and equipment, net
108,499 110,949 Intangible assets, net 194,562 193,113 Goodwill
281,350 274,070 Other noncurrent assets 38,226 46,335
Total assets $ 1,388,590 $ 1,325,672 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
439,746 $ 349,440 Accrued liabilities 140,779 137,412
Total current liabilities 580,525 486,852 Long-term
deferred taxes, net 25,743 39,557 Other long-term liabilities
75,962 69,585 Total liabilities 682,230
595,994 Commitments and contingencies — — Stockholders'
equity: Preferred stock, $0.01 par value; authorized, 5,000 shares;
issued and outstanding, none — —
Common stock, $0.01 par value; authorized,
200,000 shares; issued, 48,972 and 48,219
shares, respectively; outstanding, 46,276
and 48,217 shares, respectively
490 482 Additional paid-in-capital 703,966 695,816 Retained
earnings 28,375 33,401 Treasury stock, at cost (26,471 ) (21 )
Total stockholders' equity 706,360 729,678 Total
liabilities and stockholders' equity $ 1,388,590 $ 1,325,672
BARNES & NOBLE EDUCATION, INC.
AND SUBSIDIARIESEarnings (Loss) Per Share(In
thousands, except per share data)(Unaudited)
13 weeks ended 26 weeks ended
October 29,2016
October 31,2015
October 29,2016
October 31,2015
Numerator for basic earnings per share: Net income $ 29,289
$ 33,401 $ 1,373 $ 6,483 Less allocation of earnings to
participating securities (19 ) (22 ) (1 ) (26 ) Net income
available to common shareholders $ 29,270 $ 33,379 $
1,372 $ 6,457
Numerator for diluted
earnings per share: Net income available to common shareholders
$ 29,270 $ 33,379 $ 1,372 $ 6,457 Allocation of earnings to
participating securities 19 22 1 26 Less diluted allocation of
earnings to participating securities (19 ) (22 ) (1 ) (26 ) Net
income available to common shareholders $ 29,270 $ 33,379
$ 1,372 $ 6,457
Denominator for
basic earnings per share: Basic weighted average common shares
(a) 46,170 48,207 46,259 44,816
Denominator for diluted earnings per share: (a)(b)
Basic weighted average common shares 46,170 48,207 46,259 44,816
Average dilutive restricted stock units 364 355 339 178 Average
dilutive performance shares 35 — 24 — Average dilutive restricted
shares 24 — 30 — Average dilutive options — — —
29 Diluted weighted average common shares 46,593
48,562 46,652 45,023
Earnings
per common share: Basic $ 0.63 $ 0.69 $ 0.03 $ 0.14 Diluted $
0.63 $ 0.69 $ 0.03 $ 0.14 (a) For periods prior to
the Spin-Off from Barnes & Noble on August 2, 2015, Basic
earnings per share and weighted-average basic shares outstanding
are based on the number of shares of Barnes & Noble common
stock outstanding as of the end of the period, adjusted for an
assumed distribution ratio of 0.632 shares of the Company's Common
Stock for every one share of Barnes & Noble common stock held
on the record date for the Spin-Off. (b) For periods prior
to the Spin-Off from Barnes & Noble on August 2, 2015, Diluted
earnings per share and weighted-average diluted shares outstanding
reflect potential common shares from Barnes & Noble equity
plans in which the Company's employees participated based on the
distribution ratio.
BARNES & NOBLE EDUCATION, INC.
AND SUBSIDIARIESNon-GAAP Information(In
thousands)(Unaudited)
Adjusted Earnings 13 weeks ended
26 weeks ended
October 29,2016
October 31,2015
October 29,2016
October 31,2015
Net income $ 29,289 $ 33,401 $ 1,373 $ 6,483 Reconciling items,
after-tax (below) 394 — 2,425 — Adjusted
Earnings (Non-GAAP) $ 29,683 $ 33,401 $ 3,798
$ 6,483 Reconciling items, pre-tax Restructuring costs (a) $
— $ — $ 1,790 $ — Transaction costs (b) 644 — 2,171
— Reconciling items, pre-tax 644 — 3,961 — Less: Pro forma
income tax impact (c) 250 — 1,536 —
Reconciling items, after-tax $ 394 $ — $ 2,425
$ —
Adjusted EBITDA 13 weeks ended 26 weeks
ended
October 29,2016
October 31,2015
October 29,2016
October 31,2015
Net income $ 29,289 $ 33,401 $ 1,373 $ 6,483 Add: Depreciation and
amortization expense 12,987 13,169 25,908 26,269 Interest expense,
net 630 554 1,296 557 Income tax expense 26,841 25,558 1,329 4,233
Restructuring costs (a) — — 1,790 — Transaction costs (b) 644
— 2,171 — Adjusted EBITDA (Non-GAAP) $ 70,391
$ 72,682 $ 33,867 $ 37,542 (a)
In Fiscal 2016, the Company implemented a plan to restructure its
digital operations and announced a reduction in staff and closure
of the facilities in Mountain View, California, and Redmond,
Washington, that support the Yuzu® eTextbook platform. The Company
recorded restructuring costs of $8.8 million in Fiscal 2016
comprised of employee-related costs (including severance and
retention) and facility exit costs. During the 26 weeks ended
October 29, 2016, the Company recorded $1.8 million in additional
restructuring costs primarily for employee related costs (including
severance and retention). The majority of the restructuring related
to employee matters was completed in the first quarter of Fiscal
2017. (b) Transaction costs are costs incurred for business
development and acquisitions, and are included in selling and
administrative expenses in the condensed consolidated statement of
operations. (c) The amounts shown represent the projected
reduction in income tax expense based on the Company's current
combined federal and state aggregate income tax rate.
Use of Non-GAAP Financial Information - Adjusted Earnings and
Adjusted EBITDA
To supplement the Company’s condensed consolidated financial
statements presented in accordance with generally accepted
accounting principles (“GAAP”), in the Press Release attached
hereto as Exhibit 99.1, the Company uses the non-GAAP financial
measures of Adjusted Earnings (defined as Net Income adjusted for
certain reconciling items) and Adjusted EBITDA (defined by the
Company as earnings before interest, taxes, depreciation and
amortization, as adjusted for additional items subtracted from or
added to net income).
These non-GAAP financial measures are not intended as
substitutes for and should not be considered superior to measures
of financial performance prepared in accordance with GAAP. In
addition, the Company's use of these non-GAAP financial measures
may be different from similarly named measures used by other
companies, limiting their usefulness for comparison purposes. These
non-GAAP financial measures should not be considered as
alternatives to net income as an indicator of the Company's
performance or any other measures of performance derived in
accordance with GAAP.
The Company's management reviews these Non-GAAP financial
measures as internal measures to evaluate the Company's performance
and manage the Company's operations. The Company's management
believes that these measures are useful performance measures which
are used by the Company to facilitate a comparison of on-going
operating performance on a consistent basis from period-to-period.
The Company's management believes that these Non-GAAP financial
measures provide for a more complete understanding of factors and
trends affecting the Company's business than measures under GAAP
can provide alone, as it excludes certain items that do not reflect
the ordinary earnings of its operations. The Company's Board of
Directors and management also use Adjusted EBITDA as one of the
primary methods for planning and forecasting overall expected
performance, for evaluating on a quarterly and annual basis actual
results against such expectations, and as a measure for performance
incentive plans. The Company's management believes that the
inclusion of Adjusted EBITDA and Adjusted Earnings results provides
investors useful and important information regarding the Company's
operating results.
The non-GAAP measures included in the Press Release attached
hereto as Exhibit 99.1 has been reconciled to the comparable GAAP
measures as required under Securities and Exchange Commission (the
“SEC”) rules regarding the use of non-GAAP financial
measures. All of the items included in the reconciliations
below are either (i) non-cash items or (ii) items that
management does not consider in assessing the Company's on-going
operating performance. The Company urges investors to carefully
review the GAAP financial information included as part of the
Company’s Form 10-K dated April 30, 2016 filed with the SEC on June
29, 2016, which includes consolidated financial statements for each
of the three years for the period ended April 30, 2016 (Fiscal
2016, Fiscal 2015, and Fiscal 2014), the quarterly earnings release
for the period ended July 30, 2016 included as part of the
Company's Form 8-K dated September 8, 2016 and filed with the SEC
on that date, and the Company's Quarterly Report on Form 10-Q for
the period ended July 30, 2016 filed with the SEC on September 8,
2016.
BARNES & NOBLE EDUCATION, INC. AND
SUBSIDIARIESSales Information(In
millions)(Unaudited)
Total Sales
The components of the sales variances for
the 13 and 26 week periods are as follows:
13 weeks ended 26 weeks ended New
stores (a) $ 50.0 $ 58.5 Closed stores (a) (10.7 ) (12.5 )
Comparable stores (22.4 ) (28.6 ) Textbook rental deferral (3.6 )
(2.2 ) Other revenue (b) 2.3 2.4 Other (c) (0.8 )
(2.5 ) Total sales variance $ 14.8 $ 15.1 (a)
We added 34 new stores and closed 14 stores during the 26
weeks ended October 29, 2016, ending the period with a total of 771
stores. (b) Other revenue includes Promoversity, LoudCloud,
brand partnerships, shipping & handling and revenue from other
programs. (c) Other includes certain adjusting items related
to return reserves and other deferred items.
Comparable Sales
Comparable store sales variances by
category for the 13 and 26 week periods are as follows:
13 weeks ended 26 weeks ended October 29, 2016
October 31, 2015 October 29, 2016 October 31, 2015 Textbooks
$ (19.1 ) (3.3 )% $ (24.4 ) (4.2 )% $ (26.0 )
(3.8 )% $ (27.9 ) (4.1 )% General Merchandise (2.3 ) (1.3 )%
2.2 1.3 % (0.7 ) (0.2 )% 9.2 3.5 % Trade Books (0.8 ) (5.6 )% 0.3
1.8 % (1.5 ) (5.2 )% 0.4 1.4 % Other (0.2 ) (88.0 )%
(0.7 ) (72.4 )% (0.4 ) (88.7 )% (0.6 ) (51.8 )% Total
Comparable Store Sales $ (22.4 ) (2.9 )% $ (22.6 ) (3.0 )% $ (28.6
) (2.9 )% $ (18.9 ) (1.9 )% Effective for the first quarter
of Fiscal 2017, comparable store sales includes sales from stores
that have been open for an entire fiscal year period, does not
include sales from closed stores for all periods presented, and
digital agency sales are included on a gross basis. We believe the
current comparable store sales calculation method better reflects
the manner in which management views comparable sales, as well as
the seasonal nature of our business. For periods presented prior to
the first quarter of Fiscal 2017, comparable store sales includes
sales from stores that have been open for at least 15 months, does
not include sales from closed stores for all periods presented, and
includes digital agency sales on a net basis.
ABOUT BARNES & NOBLE EDUCATION, INC.
Barnes & Noble Education, Inc. (NYSE: BNED), one of
the largest contract operators of bookstores on college and
university campuses across the United States and a leading provider
of digital education services, enhances the academic and social
purpose of educational institutions. Through its Barnes & Noble
College subsidiary, Barnes & Noble Education serves more than 5
million college students and their faculty through its 771 stores
on campuses nationwide, delivering essential educational content
and tools within a dynamic retail environment. Through its Digital
Education subsidiary, Barnes & Noble Education offers a suite
of digital software, content and services that include a
sophisticated digital learning management platform that has
competency-based features, analytics capabilities, courseware
offerings and a digital eTextbook reading product. Barnes &
Noble Education acts as a strategic partner to drive student
success; provide value and support to students and faculty; and
create loyalty and improve retention, all while supporting the
financial goals of college and university partners.
General information on Barnes & Noble Education, Inc. can be
obtained by visiting the Company's corporate website:
www.bned.com.
Forward-Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 and information relating to Barnes & Noble Education
and its business that are based on the beliefs of the management of
Barnes & Noble Education as well as assumptions made by and
information currently available to the management of Barnes &
Noble Education. When used in this communication, the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“will,” “forecasts,” “projections,” and similar expressions, as
they relate to Barnes & Noble Education or the management of
Barnes & Noble Education, identify forward-looking statements.
Moreover, Barnes & Noble Education operates in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for the management of Barnes &
Noble Education to predict all risks, nor can Barnes & Noble
Education assess the impact of all factors on its business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements Barnes & Noble Education may make.
In light of these risks, uncertainties and assumptions, the future
events and trends discussed in this press release may not occur and
actual results could differ materially and adversely from those
anticipated or implied in the forward-looking statements.
Such statements reflect the current views of Barnes & Noble
Education with respect to future events, the outcome of which is
subject to certain risks, including, among others: general
competitive conditions, including actions the Company’s competitors
may take to grow their businesses; a decline in college enrollment
or decreased funding available for students; decisions by colleges
and universities to outsource their bookstore operations or change
the operation of their bookstores; the general economic environment
and consumer spending patterns; decreased consumer demand for the
Company’s products, low growth or declining sales; restructuring of
the Company’s digital strategy may not result in the expected
growth in the Company’s digital sales and/or profitability; risk
that digital sales growth does not exceed the rate of investment
spend; the performance of the Company’s online, digital and other
initiatives, integration of and deployment of, additional products
and services, and further enhancements to Yuzu® and any future
higher education digital products, and the inability to achieve the
expected cost savings; the Company’s ability to successfully
implement the Company’s strategic initiatives including the
Company’s ability to identify and execute upon additional
acquisitions and strategic investments; technological changes; the
Company’s international expansion could result in additional risks;
the Company’s ability to attract and retain employees; changes to
payment terms, return policies, the discount or margin on products
or other terms with the Company’s suppliers; risks associated with
data privacy, information security and intellectual property;
trends and challenges to the Company’s business and in the
locations in which the Company has stores; non-renewal of contracts
and higher-than-anticipated store closings; disruptions to the
Company’s computer systems, data lines, telephone systems or supply
chain, including the loss of suppliers; work stoppages or increases
in labor costs; possible increases in shipping rates or
interruptions in shipping service, effects of competition; obsolete
or excessive inventory; product shortages; changes in law or
regulation; the amount of the Company’s indebtedness and ability to
comply with covenants applicable to any future debt financing; the
Company’s ability to satisfy future capital and liquidity
requirements; the Company’s ability to access the credit and
capital markets at the times and in the amounts needed and on
acceptable terms; adverse results from litigation, governmental
investigations or tax-related proceedings or audits; changes in
accounting standards; challenges to running the Company
independently from Barnes & Noble, Inc. following the Spin-Off;
the potential adverse impact on the Company’s business resulting
from the Spin-Off; and the other risks and uncertainties detailed
in the section titled “Risk Factors” in the Barnes & Noble
Education Annual Report on Form 10-K for the year ended April 30,
2016 filed with the Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent
written and oral forward-looking statements attributable to Barnes
& Noble Education or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this
paragraph. Barnes & Noble Education undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise after
the date of this press release.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161206005475/en/
Barnes & Noble Education, Inc.Media:Carolyn J. Brown, 908-991-2967Vice
PresidentCorporate Communicationscbrown@bned.comorInvestors:Thomas Donohue, 908-991-2966Vice
PresidentTreasurer and Investor Relationstdonohue@bned.com
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