Today was not a great day to be an investor at Barnes & Noble Education (NYSE:BNED). This morning saw the company’s value dropping as much as 22%.
Why did this happen?
The Textbook Business Is Flat, Says Management
For those unaware, Barnes & Noble Education is a subsidiary of the American bookseller. More specifically, one that focuses on selling textbooks to college students across the United States.
The thing is that college-based bookstores can not thrive all year round. Instead, they’re a highly seasonal business that depends on a new semester (or school year) starting.
It is around these dates that Barnes & Noble Education gets some of its best numbers. So it was to be expected that investors were looking out for their latest report.
Sadly, things played a lot more on the negative side this time around. Let’s take a look at their numbers, as reported for their most recent quarter.
- Sales came down at $627 million USD during this quarter.
- Earnings came at a rate of $0.41 USD per share.
Overall, the problem lies in the fact that Barnes & Noble Education failed to meet expectations. Expectations from Wall Street itself. For reference, they were hoping for at least $663 million USD and earnings per share of $0.82 USD.
With that knowledge, investors weren’t happy this quarter. People just aren’t buying as many physical textbooks as they once did.
When asked about it, management agreed that “[the] textbook business was essentially flat.” Sadly, this has yet to give us any insight into what the future might hold for the subsidiary.