What changed in this filing

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Item 1. Business

2024-07-01 compared with 2023-07-31 · 187 added, 198 removed, 275 unchanged (58% of the section changed)

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Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April.

“Fiscal 2024” means the 52 weeks ended April 27, 2024,“Fiscal 2023” means the 52 weeks ended April 29, 2023, “Fiscal 2022” means the 52 weeks ended April 30, 2022, and “Fiscal 2021” means the 52 weeks ended May 1, 2021.

“Fiscal 2024” means the 52 weeks ended April 27, 2024,“Fiscal 2023” means the 52 weeks ended April 29, 2023, and “Fiscal 2022” means the 52 weeks ended April 30, 2022.

Barnes & Noble Education, Inc.

(“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States.

We are also one of the largest textbook wholesalers, inventory management hardware and software providers, and a leading provider of digital education solutions.

We operate 1,366 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content, tools and general merchandise items within a dynamic omnichannel retail environment.

We are also one of the largest textbook wholesalers and inventory management hardware and software providers.

We operate 1,245 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.

The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands.

We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes.

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

The BNC First Day discounted price is offered as a course fee or included in tuition.

During Fiscal 2023, BNC First Day total revenue increased 48% from the prior year period.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our stores by Fiscal 2025, with continued relative adoption of this model thereafter.

We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc.

(“Fanatics”) and Fanatics Lids College, Inc.

D/B/A "Lids" (“Lids”) (collectively referred to herein as the “F/L Partnership”), win new accounts, and expand our strategic opportunities through acquisitions and partnerships.

We expect gross general merchandise sales to continue to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through our F/L Partnership.

Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business.

During Fiscal 2023, Retail Gross Comparable Store general merchandise sales increased by 8.6%.

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

During the 52 weeks ended April 27, 2024, BNC First Day total revenue increased by $127 million, or 37%, to $474 million compared to $347 million during the prior year period.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results.

In Fiscal 2024, the growth of our BNC First Day programs offset the declines in a la carte courseware sales and closed store sales.

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc.

D/B/A “Lids” (“Lids”) (collectively referred to herein as the “F/L Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships.

We expect gross comparable store general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship.

Fanatics and Lids, acting on our behalf as our service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business.

The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States.

Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.

We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance.

During the fourth quarter of Fiscal 2023, assets related to our Digital Student Solutions ("DSS") Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment.

On May 31, 2023, subsequent to the end of Fiscal 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $20 million, net of certain transaction fees, severance costs, escrow, and other considerations.

During the first quarter of Fiscal 2024, we expect to record a Gain on Sale of Business in the range of $2.5 million to $4.5 million.

Net cash proceeds from the sale was used for debt repayment and provided additional funds for working capital needs under our Credit Facility.

Financing Arrangements

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, to substantially deleverage our consolidated balance sheet.

These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

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We have two reportable segments:

Retail and Wholesale.

Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to any specific reporting segment and continue to be presented as “Corporate Services”.

Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to a specific reporting segment and continue to be presented as “Corporate Services”.

The following discussion provides information regarding the two segments.

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The Retail Segment operates 1,245 college, university, and K-12 school bookstores, comprised of 707 physical bookstores and 538 virtual bookstores.

Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products.

The majority of the physical campus bookstores have school-branded e-commerce websites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials, school supplies, technology items, student essentials, and affinity products, including emblematic apparel and gifts.

Our bookstores typically operate under agreements with the colleges, universities, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products.

The majority of the physical campus bookstores have school-branded e-commerce websites, which we operate independently or along with our merchant service providers, and which offer students access to required and recommended course materials and affinity products, including emblematic apparel and gifts.

The Retail Segment offers existing and prospective clients the flexibility of physical, virtual or custom store solutions.

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At certain institutions, students also have the flexibility of using financial aid, and proprietary campus debit cards for their course material purchases.

The Retail Segment also offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

The BNC First Day discounted price is offered as a course fee or included in tuition.

The Retail Segment offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate, directly by the institution as a course charge or included in tuition.

We have entered into several agreements with major publishers, including Cengage Learning, McGraw-Hill Education and Pearson Education, to distribute their digital content through BNC First Day .

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In addition to BNC First Day programs, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open education resources (“OER”) course material.

In Fiscal 2023, in the Retail Segment, we signed contracts for 66 new physical and virtual bookstores for estimated first year annual sales of approximately $53 million, which is generally fully achieved as if the store becomes fully-operational in their first full year of operations.

In Fiscal 2023, we closed 127 stores in the Retail Segment, with estimated annual sales of $82 million as we pruned some under-performing, less profitable stores, satellite stores, and certain other contracts were awarded to competitors.

We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our stores by Fiscal 2025, with continued relative adoption of this model thereafter.

In Fiscal 2024, in the Retail Segment, we signed contracts for 46 new physical and virtual bookstores for estimated first year annual sales of approximately $35 million, which is generally fully achieved as the store becomes fully-operational in their first full year of operations.

In Fiscal 2024, we closed 167 stores in the Retail Segment, with estimated annual sales of $109 million.

The Company’s strategic initiative is to close under-performing and less profitable stores.

Many institutions have adopted First Day Complete in Fiscal 2024 and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines as the growth of our BNC First Day programs offsets declines in a la carte courseware sales and closed store sales.

Currently, we estimate that approximately 27% of college and university affiliated bookstores in the United States are operated by their respective institutions.

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Our ability to offer existing and prospective clients physical, virtual and custom store solutions is a key element of our competitive strategy.

Our business was significantly negatively impacted by the COVID-19 pandemic, as many schools adjusted their learning models and on-campus activities.

The impact of COVID-19 store closings during Fiscal 2021 to Fiscal 2022 resulted in the loss of cash flow and increased borrowings that we would not otherwise have expected to incur.

In Fiscal 2023, on campus traffic grew from increased campus events and activities, as compared to the last two years.

See our Part II - Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion on the impact of the COVID-19 pandemic on our business.

BNC First Day Equitable and Inclusive Access Programs

The BNC First Day discounted price is offered as a course fee or included in tuition.

• First Day Complete is adopted by an institution and includes all undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials.

• First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials.

The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.

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Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter.

For the 2023 Spring Term, 116 campus stores adopted our First Day Complete course materials delivery program, representing approximately 580,000 in total undergraduate student enrollment (as reported by National Center for Education Statistics), compared to 76 campus stores representing approximately 380,000 in total undergraduate student enrollment for the 2022 Spring Term.

During the 52 weeks ended April 29, 2023, First Day Complete sales increased by $93 million to $198 million, or 88%, as compared to $105 million in the prior year period.

Partnership with Fanatics and Lids

In December 2020, we entered into the F/L Partnership.

Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform.

Offering course materials through our equitable and inclusive access First Day Complete and First Day models is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

In Fiscal 2024, the growth of our BNC First Day programs offset the declines in a la carte courseware sales and closed store sales.

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

The following table summarizes our BNC First Day sales for the 52 weeks ended April 27, 2024 and April 29, 2023:

Dollars in millions 52 weeks ended

April 27, 2024 April 29, 2023 $ Increase

First Day Complete Sales

$ 292.7 $ 197.8 $ 94.9 48%

First Day Sales

$ 181.2 $ 148.9 $ 32.3 22%

Total BNC First Day Sales

$ 473.9 $ 346.7 $ 127.2 37%

First Day Complete Spring 2024 Spring 2023 # Increase

Number of campus stores 160 116 44 38%

Estimated enrollment (a)

805,000 580,000 225,000 39%

(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of October 26, 2023.

Relationship with Fanatics and Lids

In December 2020, we entered into the F/L Relationship.

Fanatics operates as our service provider, including processing consumer personal information on our behalf, using their cutting-edge e-commerce and technology expertise to offer our campus store websites expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform.

Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.

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Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.

Through the pending installation of Lids "Custom Zones" at certain stores, our stores will offer a differentiated shopping experience, that lets students, parents, alumni, fans, and campus clubs personalize school merchandise that’s sold in the store.

These Custom Zones will drive incremental foot traffic, increases in-store dwell time, and grows sales opportunities.

The installation of traffic counters at certain stores provides comprehensive store analytics that help us optimize the customer experience and business outcomes, by better aligning staffing with peak traffic hours, identifying opportunities to increase conversion, or assessing promotional effectiveness.

On April 4, 2021, as contemplated by the F/L Partnership's merchandising agreement, we sold our logo and emblematic general merchandise inventory to Lids, which was finalized during the first quarter of Fiscal 2022.

As contemplated by the F/L Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products during the first quarter of Fiscal 2022.

As the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis prior to April 2021.

In December 2020, Fanatics, Inc.

and Lids Holdings, Inc.

jointly made a $15 million strategic equity investment in BNED.

In addition to its equity investment, on June 7, 2022, we entered into a $30 million term loan credit agreement with TopLids LendCo, LLC and Vital Fundco, LLC, another strategic partner.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data .

Physical and Custom Campus Bookstore Solutions

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In addition, we have the non-exclusive right to sell all items typically sold in a college bookstore both in-store and online.

We also have the ability to integrate the store's systems with the colleges and university’s systems in order to accept student financial

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aid, university debit cards and other forms of payment.

have the ability to integrate the store's systems with the colleges and university’s systems in order to accept student financial aid, university debit cards and other forms of payment.

Our decentralized management structure empowers local teams to make decisions based on the local campus needs and fosters collaborative working relationships with our partners.

We also offer “Custom Store Solutions”, where an institution has a physical on-campus store for general merchandise sales, but course materials are offered virtually and fulfilled direct-to-student (either to an individual address or a central campus pick-up point).

Additionally, our virtual-only solutions, discussed below, also have the ability to offer ship-to-campus options.

For those on-campus stores with a limited store footprint, we also offer solutions for institutions to provide general merchandise products at the physical on-campus store, with course materials offered virtually and fulfilled direct-to-student (either to an individual address or a central campus pick-up point).

The physical bookstore management contracts with colleges and universities typically include five-year terms with renewal options and are typically cancellable by either party without penalty with 90 to 120 days' notice.

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From Fiscal 2021 through Fiscal 2024, approximately 82% of these contracts were renewed or extended, often before their termination dates.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter, accordingly, going forward the percentage of contracts that are renewed or extended may decline in the future.

Virtual Campus Bookstore Solutions

We operate 538 virtual campus bookstores.

Our virtual bookstores operate under a contract with the school as the exclusive online seller of course materials.

We operate as the institution’s official source of course materials with exclusive rights to book lists and access to online programs that link course materials to the courses offered by the school.

Our virtual bookstores generally operate under a contract as the institution’s official source of course materials with exclusive rights to book lists and access to online programs that link course materials to the courses offered by the school.

Our virtual-only solutions typically ship course materials directly to students, but also have the ability to offer ship-to-campus options.

Virtual bookstore agreements typically have a term that ranges between three to five years, with automatic renewal periods.

For the past three years, we have retained over 90% of our contracts annually, with the majority of the contracts being automatically renewed as per the contract terms or renewed before their expiration dates.

Virtual bookstore agreements typically have terms between three and five years, with automatic renewal periods.

For the past three years, we have retained approximately 90% of our contracts annually, with the majority of the contracts automatically renewed as per the contract terms or renewed before their expiration dates.

We pay the school a percentage of sales for the right to be the official college or university bookstore.

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Additionally, our physical campus stores are social and academic hubs through which students can access affordable course materials, along with emblematic apparel and gifts, trade books, technology, school supplies, café offerings, convenience food and beverages, and graduation products.

The majority of physical campus stores also have school-branded e-commerce sites which we operate independently or along with our merchant partners, and which offer the same products as the on campus stores plus additional items.

The majority of physical campus stores also have school-branded e-commerce sites which we operate independently or along with our merchant service providers, and which offer the same products as the on campus stores plus additional items.

Product and service offerings include:

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• Equitable and Inclusive Access.

As discussed above, we offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the first day

As discussed above, we offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

We have contracted with VitalSource Technologies, Inc.

(“VitalSource”) to use their technology to power our BNC First

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of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

We have partnered with VitalSource ® , to use their technology to power our BNC First Day inclusive access platform, for digitally formatted courseware, from all major publishers, including Cengage Learning, McGraw-Hill Education and Pearson, allowing us to accelerate and optimize BNC First Day implementations.

Day inclusive access platform, for digitally formatted courseware, from all major publishers, including Cengage Learning, McGraw-Hill Education and Pearson Education, allowing us to accelerate and optimize BNC First Day implementations.

The seamless delivery is made possible by our BNC First Day technology and publishers' technology integrations with campus systems.

These initiatives provide students, faculty and institutions greater access to more affordable course materials.

First Day is offered on a class-by-class basis, as adopted by the individual instructors on a campus, as compared to First Day Complete , an institution adopts the program for all undergraduate (and on occasion graduate) courses.

First Day is offered on a class-by-class basis, as adopted by the individual instructors on a campus, as compared to First Day Complete , an institution adopts the program for all or the vast majority of undergraduate (and on occasion graduate) courses.

In Fiscal 2024, BNC First Day programs' total sales increased by 37% from the prior year.

First Day Complete offers the delivery of both digital and physical course materials priced at substantial discounts compared to traditional individual student sales offerings.

Offering course materials through our equitable and inclusive access programs is a key and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students while, at the same time, increasing our market share, revenue and relative gross margins of course materials sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

First Day Complete offers the delivery of both digital and physical course materials priced at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte).

Offering course materials through our equitable and inclusive access programs is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students while, at the same time, increasing our market share, revenue and relative gross margins of course materials sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

• eTextbooks.

We have partnered with VitalSource ® , a global leader in building, enhancing and delivering digital content, on our digital reading platform and digital content catalog.

The partnership with VitalSource allows us to use its technology to power our BNC First Day platform, for digitally formatted course materials, allowing us to accelerate and optimize BNC First Day implementations.

We have contracted with VitalSource, a global leader in building, enhancing and delivering digital content, on our digital reading platform and digital content catalog.

The strategic relationship with VitalSource allows us to use its technology to power our BNC First Day platform, as well as our a la carte digital course material platform and catalog, for digitally formatted course materials, allowing us to accelerate and optimize BNC First Day implementations.

• General Merchandise .

For our physical campus bookstores and custom store solutions, we drive general merchandise sales through both in-store and online channels and feature collegiate and athletic apparel, other custom-branded school spirit products, lifestyle and wellness products, technology products, supplies, graduation products and convenience items.

We continue to see significant growth in general merchandise sales, which has been further bolstered through our F/L Partnership, as discussed above.

We continue to see growth in general merchandise sales, which has been further bolstered through our F/L Relationship, as discussed above.

We continue to enhance the user experience and product mix offered through our next generation e-commerce platform.

In Fiscal 2024, Retail Gross Comparable Store Sales for general merchandise increased by $6.6 million, or 1.2%.

We operate 47 True Spirit apparel and spirit shop e-commerce websites, through our F/L Partnership, which are virtual stores that appeal specifically to the alumni and sports fan base.

We operate 48 True Spirit apparel and spirit shop e-commerce websites, through our F/L Relationship, which are virtual stores that appeal specifically to the alumni and sports fan base.

We also operate pop-up retail locations at major sporting events, such as football and basketball games, for our partner colleges and universities.

The True Spirit e-commerce websites for athletic branded merchandise and the physical pop-up retail locations continue to build our partner schools’ brands through alumni and athletics, fostering school spirit and capturing the excitement of collegiate sports.

We utilize event driven direct marketing strategies for events, such as tournament playoffs or homecoming events, to target an online population of students, alumni and sports fans, with emails and search engine marketing.

The True Spirit e-commerce websites for athletic branded merchandise and the physical pop-up retail locations build our partner schools’ brands through alumni and athletics, fostering school spirit and capturing the excitement of collegiate sports.

We utilize event driven direct marketing strategies for events, such as tournaments and playoffs or homecoming events, to target an online population of students, alumni and sports fans, with emails, social media posts, and search engine marketing.

• Cafés and Convenience Stores.

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As market needs change, we are adapting our model to include more grab-and-go pre-packed fresh food items, simplified menus to reduce food waste and new technology to reduce operating complexity and make the customer experience more efficient.

• Brand Partnerships.

Through our unique relationship with students, colleges and universities, and our premier position on campus and online, we operate as a media channel for brands looking to target the college demographic, and derive revenue from these marketing programs.

• Brand Marketing Programs.

Through our unique relationship with students, colleges and universities, and our premier locations on campus and online, we operate as a media channel for brands looking to target the college demographic, and derive revenue from these marketing programs.

We also focus on promoting lifestyle products to students and faculty by promoting various brands to connect on a much more personal level.

We create strategic, integrated campaigns which include research, email, social media, display advertising, on-campus events, signage, and sampling.

Our client list includes brands such as College Ave, Comcast-Xfinity, Dell, Hewlett-Packard, New York Times, Peacock, Verizon, Wall Street Journal, and Zip.

Our client list includes brands such as Clinique, College Ave, Dell, DoorDash, HelloFresh, Hewlett-Packard, and Wall Street Journal.

Revenue from these services have high margin rates due to the relatively low incremental cost structure to provide these services.

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Our wholesale business significantly increases our textbook supply at competitive prices, as well as our ability to liquidate non-returnable inventory.

Through this close inventory management, we consolidate textbook units from multiple Retail Segment stores and other non-traditional wholesale sources into fewer, but larger, store shipments, reducing our shipping expenses and providing for efficiency of store handling, which puts our books on the store's shelves faster.

Our broad wholesale distribution channel and warehousing systems also drive inventory efficiencies by using real-time information regarding title availability, edition status and market prices, allowing the Retail Segment to optimize its course material sourcing and purchasing processes.

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Students typically receive up to 50% of the price they originally paid for the book if it has been adopted for a future class or the current wholesale price if it has not.

In Fiscal 2022 and Fiscal 2021, during the COVID-19 pandemic, the impact of fewer students on campus and the increase in digital textbook usage, significantly impacted our on-campus buyback programs which supplies Wholesale’s used textbook inventory for future selling periods.

As more students continue returning to campus in Fiscal 2023, returns of previously rented textbooks and buybacks of new and used textbooks have increased, but are still not at pre-COVID-19 levels, mainly attributed to the continued growth of digital textbooks and courseware products.

The larger physical bookstores feature an expanded selection of trade books (general reading).

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General Merchandise

General merchandise vendors and product selection is driven by our central merchant organization that is responsible for curating the overall product assortment, as well as in partnership with Lids and Fanatics for logo and emblematic general merchandise assortment in-store and online, respectively.

General merchandise vendors and product selection is driven by our central merchant organization that is responsible for curating the overall product assortment, as well as in conjunction with Fanatics and Lids through our F/L Relationship for logo and emblematic general merchandise assortment in-store and online, respectively.

Benchmarks are established across school type, region and the demographics of each of our schools to allow for store level insights and customization for a product assortment that is unique to address the needs of each school that we serve.

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Our Barnes & Noble College Insights ® platform, which gives us the ability to reach approximately 7 million active students, parents, and alumni via email, and our on-campus activities and opportunities with students and faculty, help to guide and inform our strategies and direction.

In addition, we expect to benefit from the F/L Partnership for insights on logo and emblematic merchandise, brand selection and style preferences, as Lids may be able to identify certain retail trends for similar age demographics at their 1,100 Lids retail locations.

In addition, we expect to benefit from the F/L Relationship for insights on logo and emblematic merchandise, brand selection and style preferences, as Lids may be able to identify certain retail trends for similar age demographics at their more than 1,100 Lids retail locations.

We believe Lids has its finger on the pulse of the buyer behavior of the 12-20 year old student consumer to identify and act on trends prior to other retailers.

Our customizable technology delivers a seamless experience providing students and faculty with the ability to research, locate and purchase the most affordable course materials.

Our platforms include single sign-on (“SSO”), student information system integration, registration integration, learning management system integration, real-time financial aid platform, point of

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sale platform and course fee solutions.

Our platforms include single sign-on (“SSO”), student information system integration, registration integration, learning management system integration, real-time financial aid platform, point of sale platform and course fee solutions.

Through our fully-integrated purchasing process, students can purchase their course materials in-store, online, or when registering for classes.

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Faculty and School Administrators

We support faculty and academic leadership with our proprietary online platform which allows for seamless content research, discovery and course material adoption, enabling them to offer course materials that are both relevant and affordable for their students.

Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters.

Revenue from the rental of physical textbooks is deferred and recognized over the rental period commencing at point of sale.

Revenue from the rental of digital textbooks is recognized at time of sale.

Our retail business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters.

Our quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, the revenue impact of accounting principles with respect to the recognition of revenue associated with our equitable and inclusive access programs, the ability to secure inventory on a timely basis, as well as shifts in our fiscal calendar dates.

These shifts in timing may affect the comparability of our results across periods.

Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product revenue in our consolidated financial statements.

Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our consolidated financial statements.

Depending on the product mix offered under the BNC First Day offerings, revenue recognized is consistent with our policies for product, digital and rental sales, net of an anticipated opt-out or return provision.

Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the student drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

As a higher percentage of our sales shift to BNC First Day equitable and inclusive access offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and schools with cash inflows collected from schools, including modifying payment terms in existing and future school contracts.

When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution’s drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to:

(i) the rental of physical textbook where revenue is recognized over the rental period, and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

WHOLESALE SEGMENT

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Additionally, through our Wholesale Segment, we sell hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 325 college bookstores.

Our Wholesale business provides a competitive advantage for our First Day Complete program, relative to other equitable access programs in the industry, as we are able to source used physical textbooks for our First Day Complete program directly from our Wholesale segment at a lower cost.

Additionally, our Wholesale Segment serves as a key consolidation and staging platform of individual student orders, pre-timed shipping for bulk deliveries and store handling and student pick up efficiencies.

Our Wholesale business provides a competitive advantage for our First Day Complete program, relative to other equitable access programs in the industry, as we are able to source more used physical textbooks for our First Day Complete program directly from our Wholesale Segment at a lower cost.

Additionally, our Wholesale Segment serves as a key consolidation and staging platform for individual student orders or First Day Complete local distribution, pre-timed shipping for bulk deliveries and direct-to-customer fulfillment for our Retail Segment bookstores' orders where the bookstore cannot fulfill the order locally.

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Product and Service Offerings

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• Wholesale Textbook Distribution.

Our large inventory of used textbooks consists of approximately 264,000 textbook titles in stock, and utilizes a highly automated distribution facility that is capable of processing over 21 million textbooks annually.

Our large inventory of used textbooks consists of approximately 235,000 unique textbook titles in stock, and utilizes a highly automated distribution facility that is capable of processing over 21 million textbooks annually.

Additionally, we are a national distributor for rental textbooks offered through McGraw-Hill Education's consignment rental program (which includes approximately 1,136 titles) and Pearson Education’s consignment rental program (which includes approximately 922 titles).

Through our centrally located, advanced distribution center, we offer the seamless integration of these consignment rental programs and centralized administration and distribution to 1,576 stores, including the Retail Segment stores.

Through our centrally located, advanced distribution center, we offer seamless integration of these consignment rental programs and centralized administration and distribution to 1,450 stores, including the Retail Segment stores.

These consignment rental programs are available to our wholesale customers, including institutionally run and contract managed campus bookstores, as well as our physical and virtual bookstores.

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The cost savings and ease of deployment ensure clients get the most out of their management systems and create strong customer loyalty.

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Supply Chain Management

Our Wholesale Segment serves as the hub of BNED’s physical book ecosystem.

Since the demand for used textbooks has historically been greater than the available supply, our financial results are highly dependent upon Wholesale’s ability to build its textbook inventory from suppliers in advance of the selling season.

Our relationships with institutional bookstores, other bookstore operators, book dealers, publishers, and other distributors and wholesalers secures a supply of high demand new and used textbooks, which is critical to the success of the wholesale business.

The products that we sell originate from a wide variety of domestic and international vendors.

Our ability to source new and used textbooks is also impacted by the broader macro-economic global supply chain.

A primary supplier of used textbooks are students, through the return of previously rented and purchased books to their campus bookstore.

Through our proprietary Database Buying Guide, we have access to the best maintained, most accurate, and most complete source of college textbook information available - a key asset that allows us to develop superior supply and demand insights and risk management capabilities.

In Fiscal 2022 and Fiscal 2021, during the COVID-19 pandemic, the impact of fewer students on campus significantly impacted our on-campus buyback programs which supply Wholesale’s used textbook inventory for future selling periods.

In Fiscal 2023, as more students returned to campus, returns of previously rented textbooks and buyback of new and used textbooks have increased, but still not at pre-COVID-19 levels.

Our ability to source new and used textbooks is also impacted by the broader macro-economic global supply chain.

Our broad wholesale distribution channel and warehousing systems also drives inventory efficiencies, allowing us to optimize our textbook sourcing, distribution and liquidation processes for BNC’s retail stores.

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As it relates to our full-service campus bookstore operations, Follett Corporation is the primary competitor for institutional contracts.

We also compete with other vendors, including eCampus, University Gear, Valore Campus, Textbook Brokers, Texas Book Company, Slingshot, Akademos, and on occasion, Ambassador Educational Solutions for virtual store operations.

We also compete with other vendors, including eCampus, BBA Solutions, University Gear Shop, Valore Campus, Textbook Brokers, Texas Book Company, BibliU, Slingshot, Akademos, and on occasion, Ambassador Educational Solutions for virtual store operations.

We also face competition from direct-to-student course material channels, including Amazon, Chegg.com, publishers (e.g., Cengage Learning, Pearson Education and McGraw-Hill Education) that bypass the retail distribution channel by selling directly to students and institutions and other third-party websites and/or local bookstores.

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Competitors for institutional contracts for our cafe and convenience general merchandise offerings include Sodexo and Aramark.

Our general merchandise business also faces competition from direct-to-student sales from Walmart, Amazon, Dick’s Sporting Goods, Fanatics, Lids, and other third-party online retailers, physical and online office supply stores and local and national retailers that offer college-themed and other general merchandise.

Competitors for our wholesale new and used textbook inventory and distribution include Amazon, Valore Books, and Texas Book Company.

Our general merchandise business also faces competition from direct-to-student sales from Walmart, Amazon, Dick’s

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Sporting Goods, Fanatics, Lids, and other third-party online retailers, physical and online office supply stores and local and national retailers that offer college-themed and other general merchandise.

Competitors for our wholesale new and used textbook inventory and distribution include Amazon, GoTextbooks, Valore Books, and Texas Book Company.

TRENDS AND OTHER BUSINESS CONDITIONS AFFECTING OUR BUSINESS

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The future availability of financing will depend on a variety of factors, such as economic and market conditions, and the availability of credit.

These factors have and could continue to materially

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adversely affect our costs of borrowing, and our financial position and results of operations would be adversely impacted.

These factors have and could continue to materially adversely affect our costs of borrowing, and our financial position and results of operations would be adversely impacted.

Volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions.

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The growth of our business depends on our ability to attract new customers and to increase the level of engagement by our current customers.

We continue to see downward enrollment trends.

In the Fall of 2023 and Spring of 2024, we observed increased year-over-year enrollment trends.

Enrollment trends, specifically at community colleges, generally correlate with changes in the economy and unemployment factors, e.g., low unemployment tends to lead to low enrollment and higher unemployment rates tend to lead to higher enrollment trends, as students generally enroll to obtain skills that are in demand in the workforce.

Additionally, enrollment trends are impacted by the dip in the United States birth rate resulting in fewer students at the traditional 18-24 year-old college age.

Online degree program enrollments continue to grow, even in the face of declining overall higher education enrollment.

Online degree program enrollments continue to grow, which impacts the level of in-store traffic for general merchandise sales, just as for cafe and convenience products.

• Increased Use of Open Educational Resources ("OER"), Online and Digital Platforms as Companions or Alternatives to Traditional Course Materials, Including Artificial Intelligence ("AI") Technologies.

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We are experiencing growing competition from alternative media and alternative sources of textbooks and other course materials.

In addition to the official physical or virtual campus bookstore, course materials are also sold through off-campus bookstores, e-commerce outlets, digital platform companies, publishers, including Cengage, Pearson and McGraw Hill, bypassing the bookstore distribution channel by selling or renting directly to students and educational institutions, including student-to-student transactions over the Internet, and multi-title subscription access.

• Supply Chain and Inventory.

In addition to the official physical or virtual campus bookstore, course materials are also sold through off-campus bookstores, e-commerce outlets, digital platform companies, and publishers, including Cengage Learning, McGraw-Hill Education and Pearson Education, bypassing the bookstore distribution channel by selling or renting directly to students and educational institutions, including student-to-student transactions over the Internet, and multi-title subscription access.

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• Suppliers, Supply Chain and Inventory.

The products that we sell originate from a wide variety of domestic and international vendors.

During Fiscal 2024, our four largest retail suppliers, excluding our wholesale business which fulfills orders for all our physical and virtual bookstores, accounted for approximately 28% of our merchandise purchased, with the largest supplier accounting for approximately 7% of our merchandise purchased.

In Fiscal 2021 and Fiscal 2022, during the COVID-19 pandemic, the impact of fewer students on campus, and the resulting increase in transition to digital materials, has significantly impacted our on-campus buyback programs which supplies Wholesale’s used textbook inventory for future selling periods.

Some textbook publishers have begun to supply textbooks pursuant to consignment or rental programs which could impact used textbook supplies in the future.

Additionally, Wholesale is a national distributor for rental textbooks offered through McGraw-Hill Education's and Pearson Education’s consignment rental program.

We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content or services, particular payment terms or the extension of credit limits.

If our current suppliers were to stop selling merchandise, content or services to us on acceptable terms, including as a result of one or more supplier bankruptcies due to poor economic conditions or refusal by such suppliers to ship products to us due to delayed or extended payment windows as a result of our own liquidity constraints, we may be unable to procure the same merchandise, content or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

Additionally, delayed or incomplete publisher shipments of physical textbook orders, or delays in receiving digital courseware access codes, could have an adverse impact on sales, including our BNC First Day Complete equitable access program, which relies upon timely receipt of inventory in advance of class start dates each academic term.

The broader macro-economic global supply chain issues may also impact our ability to source school supplies and general merchandise sold in our campus bookstores, including technology-related products and emblematic clothing.

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Offering course materials sales through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important, strategic initiative of ours to meet the market demands of substantially reduced pricing to students.

Our First Day Complete and First Day programs contribute to improved student outcomes, while increasing our market share, revenue and relative gross profits of course materials sales given the higher volumes of units sold in such models as compared to historical sales models

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that rely on individual student marketing and sales.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

While we plan to move many institutions to First Day Complete in Fiscal 2024, and the majority of our schools by Fiscal 2025, we cannot guarantee that we will be able to achieve these plans within these timeframes or at all.

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

We cannot guarantee that we will be able to achieve these plans within these timeframes or at all.

Additionally, the United States Department of Education has recently proposed regulatory changes that, if adopted as proposed, could impact equitable and inclusive access models across the higher education industry.

• A Large Number of Traditional Campus Bookstores Have Yet to be Outsourced.

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We expect awards of new accounts resulting in new physical and virtual store openings will continue to be an important driver of future growth in our business.

We also expect that certain less profitable or non-essential bookstores we operate may close.

The scope of any such store closures remains uncertain, although we are not aware, at this time, of any significant volume of stores which we operate that are likely to close or have informed us of upcoming closures.

• Impact of the COVID-19 Pandemic :

Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape.

Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes.

The impact of COVID-19 store closings during Fiscal 2021 to Fiscal 2022 resulted in the loss of cash flow and increased borrowings that we would not otherwise have expected to incur.

We also expect that certain less profitable or non-essential bookstores we operate may close, as we focus on the profitability of our stores.

In Fiscal 2024, the growth of our BNC First Day programs offset the declines in a la carte courseware sales and closed store sales.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

GOVERNMENT LAWS AND REGULATIONS

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Numerous laws and regulatory schemes have been adopted at the national and state level in the United States, and in some cases internationally, that have a direct impact on our business and operations.

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The Controlling and Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”) and similar laws adopted by most U.S.

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Department of Education, which define the terms and conditions that an institution must meet to begin and continue participation in the Title IV federal student aid programs, and other similar laws regulate the recruitment of students to colleges and other institutions of higher learning.

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The Digital Millennium Copyright Act (“DMCA”) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing or linking to third-party content that infringes copyrights of others.

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The Company is subject to certain laws relating to the collection, use, retention, security and transfer of personal information.

In many cases, these laws and regulations apply to not only third-party transactions, but also may impact transfers of personal information among the company and its affiliates.

states have enacted comprehensive consumer privacy laws as of June 1, 2023.

The California Consumer Privacy Act (“CCPA”) became effective on January 1, 2020, with enforcement commencing on July 1, 2020.

CCPA, as amended, provides California consumers the right to know what personal data companies collect, how it is used, and the right to access, delete and opt out of sale of their personal information to third parties.

It also expands the definition of personal information and gives consumers increased privacy rights and protections for that information.

The California Privacy Rights Act (“CPRA”) took effect on December 16, 2020, and became fully operative on January 1, 2023.

CPRA amends and adds to CCPA by strengthening rights of California consumers, further restricting business use of consumer personal information, and establishing a new government agency for enforcement.

The Virginia Consumer Data Protection Act (“VCDPA”), similar in scope to CCPA, went into effect on January 1, 2023.

VCDPA is the second U.S.

state-level consumer privacy law after CCPA, but unlike California, will not apply to employees and business contacts, nor provide for a private right of action.

VCDPA also defines the “sale” of personal information narrowly, including only exchanges for monetary consideration.

Colorado is the third state to enact a comprehensive data privacy statute, the Colorado Privacy Act (“CPA”).

CPA takes effect on July 1, 2023.

Although similar in scope to VCDPA, CPA defines “sale” of personal information in the same manner as CCPA, which includes any exchange for monetary or any other valuable consideration.

The Connecticut Data Privacy Act (“CTDPA”) also takes effect on July 1, 2023.

CTDPA protects a Connecticut consumer acting in an individual or household context, but does not protect an individual acting in an employment context.

The Utah Consumer Privacy Act, which adopts the VCDPA’s definition of “sale” of personal information.

goes into effect on December 31, 2023.

On March 29, 2023, Iowa became the sixth state to pass a comprehensive consumer privacy law, joining Utah, Connecticut, Colorado, Virginia and California.

The Iowa Consumer Data Protection Act will go into effect on January 1, 2025.

On May 1, 2023, Indiana became the seventh state to pass similar data privacy legislation, the Indiana Data Privacy Law, which will become effective January 1, 2026.

The Tennessee Information Protection Act, enacted on May 11, 2023, will go into effect on July 1, 2024.

On May 19, 2023, Montana became the ninth state to enact a comprehensive consumer privacy law, the Montana Consumer Data Privacy Act, which goes into effect October 1, 2024.

In many cases, these laws and regulations apply to not only third-party transfers of personal information, but also may impact transfers of personal information among the company and its affiliates.

In the absence of a federal comprehensive consumer data privacy law, 16 U.S.

states have enacted comprehensive consumer privacy laws as of April 29, 2024, including California, Colorado, Connecticut, Delaware, Indiana, Iowa, Kentucky, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah and Virginia.

HUMAN CAPITAL

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In addition, we employed approximately 5,000 temporary and seasonal domestic employees during peak periods during Fiscal 2024.

Of our approximate 3,030 full-time employees, 2,450 work in our Retail Segment, 270 work in our Wholesale Segment, 290 worked in our Digital Student Solutions Segment (which was sold in May 2023) and 20 work in corporate support functions.

Our employees are not represented by unions, except for 10 employees.

Of our approximate 2,520 full-time employees, 2,250 work in our Retail Segment, 250 work in our Wholesale Segment, and 20 work in corporate support functions.

Our employees are not represented by unions, except for 9 employees, in locations with existing collective bargaining agreements and approximately 40 employees at a single location for which an initial collective bargaining agreement is pending negotiations.

We believe that our relationship with our employees is good.

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To attract and retain motivated and talented people, we look for opportunities to promote from within the Company.

We are always actively recruiting talented people with a passion for education for our retail stores and corporate offices, including our part-time and seasonal roles, and to be a part of our work study/internship program.

To find our pool of talent, we network internally and externally via our talent acquisition team, through agency relationships and current employees whom we mobilize as “talent scouts” and brand ambassadors.

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We are committed to diversity in the workplace as we believe our company’s talent should reflect the faculty, students and communities we serve on each of our campuses.

As we aim to hire a truly diverse overall workforce, we have formed partnerships with Historically Black Colleges and Universities (“HBCUs”) and Hispanic Serving Institutions (“HSIs”) and are looking to continue developing relationships with veteran agencies and organizations that support individuals with disabilities to assist with the recruitment of these individuals.

We invest in our employees through structured training programs that offer all employees opportunities for development.

We create, manage, or offer a large collection of courses for employees that cover a range of subjects such as goal setting, how to be an effective leader, situational leadership, and effective communication.

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Student employees have the opportunity to participate in our Aspiring Leaders Management Development Program, which is geared toward our Campus Store Team Members and Supervisors that show interest in developing their managerial skills as well as learning more about the ins and outs of running one of our unique campus bookstores.

Learning and Development has created a comprehensive and interactive program for those interested in joining.

As a major employer of Millennials and Generation Z employees, Barnes & Noble College has become an “employer of choice” among students nationwide and our wholesale operations also offer employment opportunities to students.

Compensation and benefits

We are committed to providing competitive pay and benefits to our employees.

Corporate and store management, including store directors, regional managers and store managers, are compensated with base pay plus annual bonuses based on performance.

Corporate and store management, including store directors, regional managers and store managers, are compensated with base pay plus annual bonuses based on financial metrics.

We also offer equity awards to employees in several levels of management.

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Many of our employees participate in one of our various incentive programs, which provide the opportunity to receive additional compensation based upon department or Company performance.

We also provide our eligible employees the opportunity to participate in a 401(k)-retirement savings plan which includes a 100% Company match of the employee’s elective contributions up to 4% of eligible compensation.

We also provide our eligible employees the opportunity to participate in a 401(k)-retirement savings plan which includes an annual end of fiscal year discretionary Company match.

We offer a competitive benefits package for eligible employees and an employee discount on merchandise purchased from our stores.

Commencing in September 2023, we revised the 401(k)-retirement savings plan to an annual end of fiscal year discretionary match, in lieu of the current pay period match.

We also offer an employee assistance program that provides employees and their family members immediate support and guidance, including access to free short-term licensed counseling services, as well as assessments and referrals for further services.

In addition, we offer an employee assistance program that provides employees and their family members immediate support and guidance, including access to free short-term licensed counseling services, as well as assessments and referrals for further services.

Employees have 24-hour access by phone and through an interactive website to find information and resources for hundreds of everyday work and life issues, search for clinicians, submit online service requests and participate in interactive, customizable self-improvement programs.

Inclusion and Diversity

Diversity, Equity and Inclusion (“DEI”)

We are focused on creating an inclusive culture and a diverse employee base to better serve our diverse customer base.

We provide programming to our employees on inclusion and diversity topics.

We provide programming to our employees on diversity, equity and inclusion topics.

Approximately 66% of our full-time and part-time domestic employees identify as women and approximately 33% identify as ethnically diverse.

We have required all employees to complete training aimed at preventing harassment and discrimination and will be adding training in Fiscal 2024 regarding inclusion and diversity and unconscious bias.

We have also created a D&I taskforce and engaged an outside consultant to evaluate current practices and impressions and assist us in educating employees on aspects of diversity and inclusion about which they may not have been aware.

We have required all employees to complete training aimed at preventing harassment and discrimination.

To establish our DEI program, we engaged an outside consultant to evaluate current practices and impressions and assist us in educating employees on aspects of diversity and inclusion about which they may not have been aware.

We have developed a DEI blueprint to help fulfill our company’s mission and purpose to elevate lives through education and build a stronger sense of belonging by actively engaging employees and collaborating closely with the campuses we serve.

We understand that to affirm our mission and values, we must commit to a set of DEI best practices that will help us recognize changing demographics and shifting needs of the institutions, students, faculty and communities we serve in order to actively respond and adapt as needed.

Our DEI program is managed by Corporate Communications and our Chief Human Resources Officer and overseen by our Board of Directors.

The following is an overview of the DEI initiatives we have undertaken:

• Ensuring our commitment to DEI is clear to our employees and the constituents we serve by promoting the DEI statement we developed in Fiscal 2022;

• Continuing to update DEI policies as a fundamental element in the way we do business;

• Partnering with Billie Jean King Enterprises from January 2022 through March 2023 to help establish DEI programming and initiatives;

• Utilizing internal channels, including employee portals, to celebrate cultural themes, and calendars to help drive a greater sense of belonging for all employees across our company;

• Providing DEI learning and development opportunities including training on Diversity Awareness, Inclusive Leadership and Confronting Unconscious Bias;

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• Launching our Company’s Employee Resource Group (“ERG”) program, with a company-wide ERG survey, internal learning session, providing ongoing support for the first two ERGs:

Gender Equity and Community Pride 365 as well as internal communications on the programming and the groups’ initiatives;

• Partnering with our campus clients to explore new ways to increase our role as a model of diverse and inclusive business operations;

• Promoting campus partner activities;

• In recent years, we have hosted external webinars featuring partner institutions and industry experts on how to serve the evolving needs of students and their communities.

Discussions have included equitable access, solutions for the future workforce, how to better serve a diverse student population, Hispanic Serving Institutions and students with intellectual and developmental disabilities, and mental health and wellness.

Employee safety is a top priority.

We have developed policies to ensure the safety of each employee and compliance with Occupational Safety and Health Administration (“OSHA”) standards.

In response to the COVID-19 pandemic, we implemented measures to protect our employees and our customers consistent with OSHA standards and Centers for Disease Control and Prevention (“CDC”) guidelines such as temporary store closures, increased sanitization efforts at our stores, distribution centers and headquarters offices, limiting travel, physical distancing, adopting a mask policy for all customers and employees, and remote work arrangements for the majority of non-retail employees.

We have developed policies to ensure the safety of each employee and compliance with Occupational Safety and Health Administration standards.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

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Name Age Position

Huseby 68 Chief Executive Officer and Director

Jonathan Shar 55 Chief Executive Officer

Miller 52 Executive Vice President, Corporate Development & Affairs, Chief Legal Officer, and Secretary

Jonathan Shar 54 Executive Vice President, BNED Retail and President, Barnes & Noble College Booksellers, LLC

58 Executive Vice President, Chief Financial Officer

Paul 60 Senior Vice President, Chief Accounting Officer

Huseby , age 68, serves as our Chief Executive Officer and a member of the Board of Directors.

He was a member of the Board of Directors of Barnes & Noble from January 2014 and served as the Chief Executive Officer of Barnes & Noble until the complete legal and structural separation of the Company from Barnes & Noble on August 2, 2015.

Huseby was elected to the Board of Directors of the Company and was appointed Executive Chairman effective August 2, 2015.

Effective September 19, 2017, Mr.

Huseby became Chief Executive Officer of the Company in addition to his role as Chairman of the Board of Directors.

Huseby served as Chairman of the Board of Directors of the Company from August 2, 2015 to June 25, 2022.

Jonathan Shar , age 55, was appointed Chief Executive Officer in June 2024.

Previously, Mr.

Huseby was appointed President of Barnes & Noble in July 2013, and Chief Financial Officer of Barnes & Noble in March 2012.

From 2004 to 2011, Mr.

Huseby served as Executive Vice President and Chief Financial Officer of Cablevision Systems Corporation, a leading telecommunications and media company, which was acquired by the Altice Group in June 2016.

He served on the Cablevision Systems Corporation Board of Directors in 2000 and 2001.

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joining Cablevision, Mr.

Huseby served as Executive Vice President and Chief Financial Officer of Charter Communications, Inc., a large cable operator in the United States.

Huseby served on the Board of Directors of Charter Communications from May 2013 through May 2016.

Huseby served as Executive Vice President, Finance and Administration, of AT&T Broadband, a leading provider of cable television services from 1999 to 2002, when it was sold to Comcast Corporation.

In addition, Mr.

Huseby spent over 20 years at Arthur Andersen, LLP and Andersen Worldwide, S.C., where he held the position of Global Equity Partner serving a myriad of clients, including a number of large publicly-traded companies.

Huseby served on the Board of Directors of CommerceHub, Inc., a cloud-based e-commerce fulfillment and marketing software platform company previously listed on Nasdaq, from July 2016 until May 2018 with his tenure ending upon the consummation of the sale of CommerceHub to financial sponsors.

While on the Board of CommerceHub, Mr.

Huseby served as chair of the Audit Committee and as a member of the Compensation Committee.

Shar served as our Executive Vice President, BNED Retail and President, Barnes & Noble College Booksellers, LLC since October 2021.

Prior to that, he served as Executive Vice President, Retail.

Shar has overall responsibility for the growth and profitability of the Company, including the development and implementation of client-focused solutions that deliver innovation and increased value to the higher education marketplace;

and providing strategic direction and operational leadership across the Company.

Shar also leads strategy and execution for merchandising, marketing, and business development, serving the higher education and K-12 markets.

Previously, Mr.

Shar served as Senior Vice President, Revenue and Product Development for the Company.

Prior to joining BNED in 2018, Mr.

Shar was Chief Marketing Officer at Akademos, Inc., an e-commerce and digital marketing company that provides online bookstore services, from 2014 to 2018.

He previously was the General Manager of NOOK Digital Content at Barnes & Noble, Inc.

where he oversaw business development, product development and marketing for the Global NOOK Newsstand, NOOK Video and NOOK Apps digital businesses.

Prior to his nearly five years with NOOK, he served as Senior Vice President and General Manager at CNNMoney, responsible for the CNNMoney website and mobile franchise.

Prior to that, he was Vice President of Consumer Marketing at Sports Illustrated Group and Director of Consumer Marketing for FORTUNE Magazine Group.

Miller , age 52, serves as our Executive Vice President, Corporate Development & Affairs, Chief Legal Officer, and Corporate Secretary.

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Miller was associated with both Sullivan & Cromwell, LLP and Winthrop, Stimson, Putnam & Roberts in New York.

Jonathan Shar , age 54, has served as our Executive Vice President, BNED Retail and President, Barnes & Noble College Booksellers, LLC since October 2021.

Prior to that, he served as Executive Vice President, Retail.

Shar has overall responsibility for the growth and profitability of the Company’s Retail segment, including the development and implementation of client-focused solutions that deliver innovation and increased value to the higher education marketplace;

and providing strategic direction and operational leadership across the Company’s physical campus bookstores and e-commerce sites nationwide.

Shar also leads strategy and execution for merchandising, marketing, and business development, serving the higher education and K-12 markets.

Previously, Mr.

Shar served as Senior Vice President, Revenue and Product Development for the Company.

Prior to joining BNED in 2018, Mr.

Shar was Chief Marketing Officer at Akademos, Inc., an e-commerce and digital marketing company that provides online bookstore services, from 2014 to 2018.

He previously was the General Manager of NOOK Digital Content at Barnes & Noble, Inc.

where he oversaw business development, product development and marketing for the Global NOOK Newsstand, NOOK Video and NOOK Apps digital businesses.

Prior to his nearly five years with NOOK, he served as Senior Vice President and General Manager at CNNMoney, responsible for the CNNMoney website and mobile franchise.

Prior to that, he was Vice President of Consumer Marketing at Sports Illustrated Group and Director of Consumer Marketing for FORTUNE Magazine Group.

Watson , age 58, was appointed as Executive Vice President, Chief Financial Officer in September 2023.

In this role, Mr.

Watson is responsible for the company’s financial management, including leading the accounting, treasury, tax, financial planning and operations, internal audit and investor relations teams.

Prior to joining BNED, he was Executive Vice President and Chief Financial Officer for Paraco Gas Corporation.

At Paraco, he oversaw the financial management of the Company, including accounting, tax, internal audit, human resources, information technology, supply chain, business intelligence, risk management, and mergers and acquisitions.

Before joining Paraco Gas in 2018, he served as a senior financial executive for Cablevision Systems Corporation, PanAmSat Corporation and Entex IT Services, as well as various finance roles at MCI Telecommunications and Prudential Securities, Inc.

Watson holds a Bachelor of Business Administration in Finance from Iona University.

Index to Form 10-K Index to FS

Paul , age 60, has served as our Senior Vice President, Chief Accounting Officer since July 2015.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business