Barnes & Noble Education posted a 6.8% increase in sales in the fiscal year ended April 30, 2022, over a dismal fiscal 2021, cutting its net losses to $68.8 million, from $139.8 million in fiscal 2021. Revenue in fiscal 2022 was $1.53 billion.

In prepared remarks, BNED CEO Michael Huseby said fiscal 2022 proved to be more challenging than expected, citing disruptions in both the fall and spring semesters due to Covid outbreaks. Huseby noted that the company also faced declining enrollments, fewer international students, ongoing remote and virtual class offerings, and fewer on campus activities.

Sales in BNED’s largest segment, retail, rose 8.2%, to $1.44 billion. The company attributed the improvement to the reopening of stores, plus a comparable store sales increase of 19.6% for the fiscal year, compared to a negative 26.1% in fiscal 2021. The gain in comp sales was largely due to a jump of 76% in the sale of general merchandise, which benefited the most from the return of students to campuses, and a 2.3% increase in course material sales. (Within its stores, BNED said comp sales of trade books jumped 63%.) BNED finished the fiscal year with 805 physical stores and 622 virtual stores, compared to 769 physical outlets a year ago and 648 virtual stores.

BNED said a number of its newer initiatives did well in the year. Its BNC First Day program, which ensures students have all the course materials they need by the first day of school, had revenues of $106 million in the year—five times the revenue in fiscal 2021. The program was available on 76 campuses and will be available in 112 campuses this fall.

Sales in BNED’s digital unit, DSS, grew 30%, but at $35.7 million, the segment remains a very small part of the company’s total revenue.

The company’s weakest performing division was its wholesale group, where sales dropped 33%, to $112.2 million. B&N attributed the decline to a number of factors, which, it said, include “a constraint on its used book inventory due to the lack of on campus textbook buyback opportunities, and lower overall customer demand resulting from the shift in buying patterns from physical textbooks to digital course materials.”

BNED said it expects its wholesale division to continue to struggle in fiscal 2023, but said its overall results should “improve significantly” over fiscal 2022.

Management Change

Prior to releasing its year-end results, BNED announced it was splitting up the duties of company chairman and CEO. Huseby had held both titles, but under the change he will remain CEO and John R. Ryan, the retired Navy vice admiral serving as BNED's current lead independent director, was named chairman. In addition, the company has agreed to nominate Rory Wallace, chief investment officer of Outerbridge, for election to its board at its upcoming annual meeting. Outerbridge has a 9.9% stake in BNED.