Results in the second quarter of fiscal 2025 ended October 26, 2024, at Barnes & Noble Education saw sales fall 1.4%, to $602.1 million, from the comparable period a year ago. However, net income jumped to $49.7 million from $24.2 million in the second quarter of fiscal 2024. The company attributed the revenue decline to the closing of 109 stores (to 1,162), many of which, the company said, were poor performers. Gross comparable store sales from remaining outlets rose 3.8%. Cutting the store count as well as other cost-saving measures were the two biggest factors behind the 105% increase in profits, B&NE reported.
The biggest driver of sales in the quarter, which is B&NE’s biggest period, was its First Day program, where revenue rose 18%, to $235.5 million, from $199.2 million a year earlier. A total of 183 campus stores used the First Day program in the quarter, and B&NE hopes to convert more stores to the model, which allows students to pay for course materials as part of tuition or another fee at a discounted price from buying materials individually. First Day accounted for about 55% of total course material sales in the quarter, up from 46% in last year’s second quarter as a la carte sales fell. General merchandise sales were also down, falling 5%.
Under the direction of Jonathan Shar, who took over as CEO in June, B&NE continues to consolidate its operations. Among its initiatives has been the creation of a “centralized management structure to support company-wide procurement, marketing and selling, delivery and customer service,” the company said in a filing. As part of the change, for financial reporting, B&NE has combined its wholesaling and retailing segment into a single segment, as the company’s wholesale business had gradually come to represent a smaller part of B&NE’s overall business. In its financial update, B&NE said that management “is working on simplifying its operations to better focus on its core physical and virtual bookstore businesses.”
Through the first half of fiscal 2025, revenue was down 1%, to $865.5 million, and the company had a net loss of $49.7 million, compared to a loss of $26.2 million last year. This year’s loss was largely due to a $55.2 million non-cash loss tied to extinguishing B&NE’s debt.
Shar said the second quarter performance “underscores the exciting progress we’re making in our business transformation.” The company also emphasized that moving forward it will remain focused on cutting cost and that its “budget goals” are for “material improvement” in its bottom line.
