Barnes & Noble Education (BNED) investor relations material

Executive summary

• Revenue for the 13 weeks ended January 31, 2026 increased 11.3% year-over-year to $515.1 million, with gross comparable store sales up 7.2%, driven by growth in BNC First Day® programs and a net increase in physical and virtual locations.

• BNC First Day program revenue surged 32.1% year-over-year to $293.6 million, with institutional adoption expanding to 237 campus stores and 1.25 million students.

• Net income for the quarter was $6.7 million, down from $17.9 million in the prior year due to absence of prior period one-time gains; net income for the 39 weeks ended January 31, 2026 was $13.4 million, a significant improvement from a net loss of $42.8 million in the prior year.

• Adjusted EBITDA for the quarter was $23.6 million, down 4.7% year-over-year, and $61.9 million for the 39-week period, up 5.5% year-over-year.

• The company completed a major recapitalization, including a rights offering, private equity investment, term loan conversion, and credit facility refinancing, substantially deleveraging the balance sheet.

Financial highlights

• Product sales and other for the quarter rose 12.4% to $471.8 million; rental income was flat at $43.3 million.

• Gross margin for the quarter was 18.7%, down from 20.3% in the prior year, primarily due to lower margin rates and higher markdowns.

• Adjusted net income for Q3 2026 was $8.2 million, compared to $15.9 million in Q3 2025.

• Adjusted free cash flow for Q3 2026 was negative $38.3 million, compared to negative $49.4 million in Q3 2025.

• Capital expenditures for Q3 2026 were $3.8 million, with $11.9 million spent in the first nine months.

Outlook and guidance

• Fiscal 2026 outlook reiterated: expects adjusted EBITDA of $65–$75 million, year-over-year growth, and a material reduction in interest expense.

• Fiscal 2027 targets adjusted EBITDA growth of 15–20% or more, with meaningful opportunities to improve gross margins.

• Management expects continued growth in BNC First Day® programs, further expansion of e-commerce capabilities, and ongoing cost savings from operational streamlining.

• The company anticipates improved predictability of results and profitability as more institutions adopt affordable access course material models.

• Approximately $18 million in capital expenditures anticipated for fiscal 2026.