Barnes & Noble Education Sees Growth Opportunities in 2023 with Inclusive and Equitable Access Programs.
Mar 9th 2023, 9:12 pm
Analysis: Part 1 - Performance Analysis Barnes & Noble Education, Inc. (BNED) has been performing well in the college and university campus bookstores industry as one of the largest contract operators of physical and virtual bookstores. The company has continued to introduce scalable and advanced digital solutions focused on the student and expand its e-commerce capabilities. In addition, BNED has developed deep relationships with academic partners, which has enabled it to maintain stable and long-term contracts. The company also benefits from its well-recognized brands, including the Barnes & Noble brand (licensed from their former parent) and its subsidiary brands, BNC and MBS. BNED has continued to offer direct-to-student products and services to help students study more effectively and improve academic performance. According to the Q3 2023 results, BNED incurred restructuring charges primarily related to severance of approximately $6 million in the quarter, and expects to save $10 million to $15 million in fiscal year 2023. Furthermore, the company expects the cost savings initiative, implemented in December 2022, to provide annualized savings of $30 million to $35 million. Despite this cost-cutting strategy, BNED expects to continue delivering essential educational content, tools, and general merchandise within a dynamic omnichannel retail environment. The company anticipates market growth, primarily through its inclusive and equitable access programs under the BNC First Day® umbrella, which consist of First Day Complete and First Day. The programs offer course materials at a reduced price through a course fee or included in tuition and delivered to students on or before the first day of class - this enables BNED to meet the market demands of reduced pricing to students and improve student outcomes, whilst increasing market share, revenue, and relatively high gross profits of courseware sales. To date, 116 campus stores have adopted BNED’s First Day Complete course materials delivery program for the 2023 Spring Term, which represents a 52.6% increase over last year, indicating the programs' increasing popularity. Part 2 - Forward Looking Analysis BNED plans to continue introducing new products and solutions to meet market needs, expanding its e-commerce capabilities, and accelerating such capabilities through its merchandising partnership with Fanatics and Lids increase market share with new accounts by expanding its strategic opportunities through acquisitions and partnerships. BNED plans to accelerate its First Day Complete strategy, with a plan to enroll many institutions to First Day Complete by Fall of 2023, and the majority of schools by Fall 2024. The company recognizes the current challenges, including the COVID-19 pandemic, which may continue to disrupt the education industry in the short term. However, BNED's deep relationships with academic partners, stable long-term contracts, and innovative and scalable digital solutions, continue to position it well in the education industry. In conclusion, BNED's strategies, cost savings initiative, and inclusive and equitable access programs, such as the First Day Complete strategy, position the company well for future growth in the education industry. It is important to note that the education industry' growth and competitiveness are influenced by technological advancements, course and digitized content development, changing market trends, and government policies; these factors may impact BNED's future performance.