Barnes & Noble Education Reports $1.61 Billion in Sales for Fiscal Year 2025

Barnes & Noble Education, Inc. (BNED) reported total sales of $1.61 billion for the fiscal year ended May 3, 2025, a 2.7% increase compared to $1.57 billion in the prior fiscal year. This growth was primarily driven by improved comparable store sales, fueled by the expansion of the BNC First Day programs and increased general merchandise sales, which offset declines in a la carte course material sales and lower sales due to store closures. Product sales and other revenue increased by 2.3% to $1.46 billion, while rental income rose by 7.5% to $146.9 million. The company operated 1,146 physical and virtual bookstores as of the end of the fiscal year.

The company's gross profit decreased by 2.1% to $337.8 million, representing a gross margin of 21.0%, compared to $344.9 million and a 22.0% margin in the previous year. This decline in gross margin was attributed to lower margin rates in product sales, particularly in non-logo general merchandise, and an unfavorable shrink reserve, which was partially offset by lower contract costs as a percentage of sales due to the shift to digital and First Day models. Selling and administrative expenses decreased by 8.9% to $283.8 million, reflecting the impact of ongoing cost-saving initiatives. The company reported an operating income of $15.9 million, a significant improvement from the operating loss of $33.8 million in the prior year.

Strategic developments during the fiscal year included the completion of several transactions on June 10, 2024, aimed at deleveraging the balance sheet. These included a $95 million equity infusion through a private equity investment and a rights offering, the conversion of approximately $34 million of term loan debt into common stock, and the refinancing of the existing credit facility with a new $325 million facility maturing in 2028. The company also entered into two at-the-market (ATM) sales agreements with BTIG, LLC, selling the maximum of $40 million of common stock under each agreement, generating net proceeds of $39.2 million per agreement. These transactions were intended to provide additional capital for debt repayment, working capital, and strategic investments, particularly in the growth of the First Day Complete program.

Operationally, BNED continued to expand its BNC First Day affordable access course material programs, with total revenue increasing by 25.3% to $593.8 million. First Day Complete sales increased by 29% to $376.3 million, while First Day sales increased by 20% to $217.5 million. The number of campus stores adopting First Day Complete increased by 19% to 191, covering an estimated enrollment of 957,000 students. The company also continued to develop its relationship with Fanatics and Lids, leveraging their e-commerce capabilities and product assortment to drive growth in general merchandise sales. However, the company closed 155 physical and virtual stores during the year, with an estimated net annual sales impact of negative $53.5 million, as part of its strategy to focus on profitability.

Looking ahead, BNED expects to continue introducing scalable solutions focused on the student experience, expanding e-commerce capabilities, winning new accounts, and growing revenue through strategic relationships. The company also anticipates long-term growth in gross comparable store general merchandise sales, driven by evolving consumer trends and enhanced merchandising strategies. However, the company acknowledges that its future performance is subject to various risks and uncertainties, including its ability to satisfy future capital and liquidity requirements, access credit and capital markets, maintain compliance with SEC reporting requirements and NYSE continued listing rules, and manage its relationships with strategic service providers.