The provider of textbooks and educational services is scoring double-digit revenue increases despite market headwinds, thanks largely to its stepped-up focus on digital sales.

Barnes & Noble Education Inc. is learning how to deal with an increasingly tough market where its customers are demanding more for their money.

Barnes & Noble Educatoin is dealing with an accelerating shift to digital.
Mike Huseby, chairman and CEO
Barnes & Noble Education Inc.

“There is an increasing emphasis on affordability and measurable achievement by our college partners, students, faculty and many state governmental agencies,” chairman and CEO Mike Huseby said on a conference call with stock analysts last month, according to a transcript from Seeking Alpha. “All are demanding higher value-to-cost ratio from providers of services and content.”

At the same time, he added, Barnes & Noble is dealing with an “accelerating shift to digital” and other less costly formats of delivering educational content, as demand declines for more traditional forms of textbooks.

Nonetheless, Barnes & Noble Education posted a 15.1% year-over-year increase in revenue for the fiscal 2018 second quarter ended Oct. 28, 2017, to $886.9 million. The company doesn’t break out e-commerce revenue, but that increase was driven by $134.9 million in revenue from MBS Textbook Exchange, which operates 706 online bookstores for colleges, universities and schools operating grades K-12. The MBS wholesale business supplies new and used textbooks to more than 3,700 brick-and-mortar college bookstores.

Barnes & Noble Education acquired MBS in 2016, but its sales were not reflected in Barnes & Noble Education’s financial results in the fiscal 2017 second quarter.


Barnes & Noble Education also operates Barnes & Noble College Booksellers LLC, which operates 777 brick-and-mortar stores on college campuses, most of which also operate associated school-branded e-commerce sites.

“We believe that the opportunity in our industry has never been greater for Barnes & Noble Education,” Huseby said. “We’re well-positioned to capture new market share and collaborate with the increasing number of schools and strategic partners.”

He added, “We’re focused on actively transforming our business, which means successfully pivoting from our historically total reliance on traditional bookstore management model to become a leading aggregator and distributor of both physical and digital educational content.”

For the fiscal second quarter ended Oct. 28, 2017, Barnes & Noble Education reported:

  • Sales of $886.86 million, up 15.1% from $770.67 a year earlier;
  • Gross profit of $216.56 million, up 26.3% from $171.51 million;
  • Net income of $48.395 million, up 65.2% from $29.289 million.

For the fiscal first half ended Oct. 28, the company reported:

  • Sales of $1.2426 billion, up 23.0% from $1.0099 billion a year earlier;
  • Gross profit of $281.27 million, up 28.5% from $218.93;
  • Net income of $13.61 million, up tenfold from $1.37 million.

Barnes & Noble Education spun off from retail chain Barnes & Noble Booksellers Inc. in August 2015, when Barnes & Noble Education became an independent, publicly traded company.

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