BASKING RIDGE, N.J--(BUSINESS WIRE)--Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today reported sales and earnings for the first quarter of fiscal year 2021, which ended on August 1, 2020.

The first quarter is historically a low revenue period for the Company, and its fiscal 2021 first quarter results were significantly impacted by the COVID-19 pandemic. As many schools shifted from an on-campus to a remote learning model, the Company was able to serve students through its Custom Store Solutions (“CSS”) model, school branded eCommerce sites, virtual bookstores and digital offerings to ensure students were equipped with their course materials to continue their education, wherever they may be. The COVID-19 impact on higher education remains a fluid situation, and BNED is committed to supporting its campus partners through its flexible offerings and its ability to quickly pivot to ensure uninterrupted service as institutions manage the safety of their campuses.

Financial highlights for the first quarter 2021:

• Consolidated first quarter sales of $204.0 million decreased 36.2%, as compared to the prior year period.
• Consolidated first quarter GAAP net loss of $(46.7) million, compared to a GAAP net loss of $(32.2) million in the prior year period. Consolidated first quarter non-GAAP Adjusted Earnings of $(41.7) million, compared to non-GAAP Adjusted Earnings of $(30.1) million in the prior year period.
• Consolidated first quarter non-GAAP Adjusted EBITDA of $(38.0) million, compared to non-GAAP Adjusted EBITDA of $(25.1) million in the prior year period.

Operational highlights for the first quarter 2021:

• Bartleby® subscribers for the quarter tripled as compared to the prior year, with revenue increasing 100%. Peak spring traffic increased over 10x year-over-year and almost 3x versus peak fall traffic, demonstrating strong student demand for the bartleby ecosystem.
• Expanded its existing strategic partnership with VitalSource® to provide students with increased access to additional learning opportunities through a unique bundle of its bartleby homework help services, bartleby learn™ and bartleby write™. The VitalSource direct-to-student channel will now offer students unique access to the bartleby study bundle™ with the purchase of a qualifying VitalSource eBook.
• Continued roll-out of the Company’s next generation eCommerce platform; expected further roll-out throughout fiscal year 2021 to grow high-margin general merchandise sales.
• Online sales of general merchandise nearly doubled over last year and accounted for 55% of total general merchandise sales, as compared to 9% a year ago.
• BNC First Day® year-over-year revenue increased 156%, benefitting from the accelerated move to digital courseware.
• Increased adoption of BNC First Day Complete, with twelve campus partners utilizing the complete access model in the Fall Term 2020, increasing 3x over last year, with more schools expected to transition to First Day Complete in Spring Term 2021.
• Wholesale revenues increased 11%, benefiting from the shift to the CSS model and lower returns and allowances due to sales mix.
• Supported campus partners in navigating the start of the ongoing fall term, implementing additional safety measures in stores to protect employees and customers and launching new programs such as curbside pickup to enhance the shopping experience.

“As our campus partners continue to navigate the ongoing impacts of the COVID-19 pandemic, the investments we have made in each of our businesses have enabled us to provide valuable solutions to our campus partners during a very challenging time. While our first quarter performance was significantly impacted by COVID-19 related campus store closures, the strategic investments we have made to transform BNED’s platforms and offerings to digital, enabled us to pivot quickly and offer flexible solutions to our campus partners. Increased and immediate demand for these solutions resulted in growth in our BNC Virtual, MBS Wholesale and DSS businesses,” said Michael P. Huseby, Chief Executive Officer and Chairman, BNED. “In particular, with the increased emphasis on digital learning this summer, we saw strong growth in the demand for our bartleby self-study offerings, which experienced increases in subscribers, revenue and traffic. We also leveraged our custom store solutions, virtual bookstore and digital offerings to provide course materials to students utilizing remote learning. This was all made possible by the strategy we are executing, including the related investments we’ve made during the past three years to support our digital growth initiatives. Going forward, and in light of the current environment, we will continue to prudently allocate our capital to maintain the momentum of our growth initiatives, while simultaneously managing our liquidity carefully during this very fluid period.”

“As students begin their fall term, we are exploring new ways to expand distribution of the bartleby ecosystem outside the BNED footprint, as we have done with our recent VitalSource partnership, to ensure all students have access to the on-demand learning support they will need in the upcoming semester,” Mr. Huseby continued. “We have worked closely with our campus partners over the past few months as they have had to make many difficult, yet necessary decisions regarding their campus reopening plans. Whether they bring students back to campus, implement remote learning or a hybrid model, as a result of the investments we have made, we have never been better positioned to serve them through our stores, eCommerce and digital offerings.”

First Quarter Results for 2021

Results for the 13 weeks of fiscal 2021 and fiscal 2020 are as follows:

The Company has three reportable segments: Retail, Wholesale and Digital Student Solutions (“DSS”). Unallocated shared-service costs, which include various corporate level expenses and other governance functions, continue to be presented as Corporate Services. All material intercompany accounts and transactions have been eliminated in consolidation.

Retail Segment Results

Retail sales decreased by $115.9 million, or 42.2%, as compared to the prior year period. Comparable store sales in the Retail segment decreased 42.8% for the quarter representing approximately $106.6 million in revenue. As the majority of campus bookstores remain closed during the quarter and students shifted to remote learning, physical textbook sales declines were partially mitigated by the shift to digital textbook products. BNC’s First Day offering, which offers digital textbooks, grew 156% to $9.1 million during the quarter. The Company’s general merchandise business, which includes clothing and food products, was significantly impacted by the store closures and absence of students on campus, which was somewhat offset by the growth of its online sales.

To mitigate the impact of the sales decline, the Company reduced expenses by $26.8 million, or 32.0%, through furloughs and other cost reduction initiatives.

Retail non-GAAP Adjusted EBITDA for the quarter declined $19.1 million to $(40.6) million, as compared to non-GAAP Adjusted EBITDA of $(21.5) million in the prior year period.

Wholesale Segment Results

Wholesale first quarter sales of $80.3 million increased $8.0 million, or 11.0%, as compared to the prior year period. Sales benefitted from the pivot of more than 300 stores to the MBS Custom Store Solutions model to fill student orders through the MBS warehouse while campus bookstores were closed, as well as fewer returns and allowances resulting from the sales mix.

Wholesale non-GAAP Adjusted EBITDA for the quarter grew to $13.0 million, as compared to non-GAAP Adjusted EBITDA of $10.2 million in the prior year, benefitting from higher sales and lower expenses.

DSS Segment Results

DSS first quarter sales of $5.9 million increased $0.5 million, or 9.3%, as compared to the prior year period. Bartleby subscription revenue increased 100% to $1.4 million, while Student Brands revenue declined 3.9% to $4.5 million.

DSS non-GAAP Adjusted EBITDA was $1.7 million for the quarter, compared to non-GAAP Adjusted EBITDA of $1.0 million in the prior year period, benefitting from sales growth and lower expenses.

Other

Selling and administrative expenses for Corporate Services, which includes unallocated shared-service costs, such as various corporate level expenses and other governance functions, were $5.2 million for the quarter, compared to $5.0 million in the prior period.

Intercompany gross margin eliminations of $6.8 million for the quarter were reflected in non-GAAP Adjusted EBITDA, compared to non-GAAP Adjusted EBITDA of $9.8 million in the prior year period.

ABOUT BARNES & NOBLE EDUCATION, INC.

Barnes & Noble Education, Inc. (NYSE: BNED) is a leading solutions provider for the education industry, driving affordability, access and achievement at hundreds of academic institutions nationwide and ensuring millions of students are equipped for success in the classroom and beyond. Through its family of brands, BNED offers campus retail services and academic solutions, a digital direct-to-student learning ecosystem, wholesale capabilities and more. BNED is a company serving all who work to elevate their lives through education, supporting students, faculty and institutions as they make tomorrow a better, more inclusive and smarter world. For more information, visit www.bned.com.