Barnes & Noble Education, Inc. Q4 FY2023 earnings call

• In fiscal 2023, the company took decisive action to reduce cost structure and increase efficiency. - Accelerated transition to the more profitable First Day Complete equitable access model, with FDC growing 88% in fiscal 2023. - Divested Digital Student Solutions business. - Strengthened liquidity via debt facility amendments. - Key growth initiatives: First Day Complete with 157 campus stores committed for fall 2023, general merchandise growth including Be Well, Be You collection, and wholesale expected to modestly grow in 2024.

Retail: Fiscal 2023 total retail revenue increased by $52.1 million or 3.6% to $1.5 billion. Course materials revenue increased 1.8%, with First Day and First Day Complete up 48% but a la carte down 9.4%. Fourth quarter retail sales were $235.4 million, down 4.1%. Retail non-GAAP adjusted EBITDA was negative $10 million in Q4 vs $4.2 million prior year. Wholesale: Fiscal 2023 revenue decreased 5.2% to $106.4 million. Wholesale non-GAAP adjusted EBITDA declined slightly to $3.2 million from $3.8 million prior year.

• Expect total consolidated revenue slightly higher in fiscal 2024 driven by First Day Complete and general merchandise, offset by a la carte declines. - Gross profit margin flat to down due to shift to digital/physical. - S&A dollars down due to cost reduction initiatives. - Expect fiscal 2024 non-GAAP adjusted EBITDA to be approximately $40 million.

• Operating environment challenges post-pandemic. - Risks associated with transition to new business models like First Day Complete. - Credit facility related risks and compliance with covenants.

Q: Alex Fuhrman asked about the transition to First Day Complete, enrollment trends, and general merchandise.

A: Jonathan Shar discussed continued growth of First Day Complete with 157 stores committed, early enrollment data too early, and positive general merchandise demand.

Q: Ryan MacDonald inquired about credit facility terms, Fanatics partnership changes.

A: Jason Snagusky and Mike Miller discussed credit facility extensions and amendment details, while Hunter Blankenbaker and Jonathan Shar provided color on Fanatics partnership commission structure changes and future growth potential.