Barnes & Noble Education’s (BNED) Q4 2017

posted in: Earnings Call, Notes | 0

Max Roberts – CEO

Significant chanegs going on in higher education

“Higher education is in the midst of significant change with increasing focus on student affordability and success, while at the same time experiencing enrollment decreases. As a result many of the major publishers are more aggressively shifting from physical to digital options, reducing prices, pursuing direct-to-consumer models, and piloting rental programs for new additions.”

Printed books still in vogue

“Sales and rental of printed textbooks remain a core driver of revenue. Printed textbooks are still the format of choice for most students…While the evolution toward digital solutions has been slower than some originally anticipated, we saw an increasing shift toward a broader adoption of digital solutions in fiscal 2017”

Short term fluctuations in enrollments expected

“Consistent with national students clearing house projections, we believe there will be short term fluctuations in overall enrollments particularly at community colleges may continue to decrease over the next 12 months… the value of higher education over the long term is still widely acknowledged as positive…we anticipate a lack of improvement in general retail trends in the near-term.”

Merchandise sales down

“…for the first time since 2008, we had a decrease in general merchandise sales…I believe it’s a combination of, obviously, there are less students in higher ed, and that is a definite trend that is supported. What is also interesting is the decrease in enrollments both in community colleges and many of the private schools …So it is a level of traffic decrease, and there is clearly apathy by the consumer across all retail channels, general merchandise channels, both traditional stores and other formats, and in clothing and general merchandise. So it’s a combination of both.”