Post Earnings Coverage as Barnes & Noble Education Q2 Results Disappoint

Upcoming AWS Coverage on CST Brands Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 14, 2016 / Active Wall St. announces its post-earnings coverage on Barnes & Noble Education, Inc. (NYSE: BNED). The Company announced its financial results for the second quarter fiscal 2017 (Q2 FY17) on December 06, 2016. The Basking Ridge, New Jersey-based company’s Q2 FY17 revenues grew 2.0% on a y-o-y basis. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Barnes & Noble Education’s competitors within the Specialty Retail, Other space, CST Brands, Inc. (NYSE: CST), reported on November 07, 2016, its financial results for the third quarter ended September 30, 2016. AWS will be initiating a research report on CST Brands in the coming days.

Today, AWS is promoting its earnings coverage on BNED; touching on CST. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=BNED

http://www.activewallst.com/registration-3/?symbol=CST

Earnings Reviewed

For the quarter ended on October 29, 2016, Barnes & Noble Education’s reported total sales of $770.67 million compared to total sales of $755.86 million recorded at the end of Q2 FY16. Total sales numbers marginally missed market estimates of $770.8 million. The company’s comparable store sales fell 2.9%, approximately $22.4 million in revenue. During the quarter, comparable store sales decline was primarily attributed to textbook sales, which were down 3.3% and a decrease in general merchandise sales of 1.3%.

The company’s product sales and other sales increased to $697.93 million in Q2 FY17 from $684.00 million in Q2 FY16. Furthermore, rental income was up to $72.74 million in Q2 FY17 from $71.86 million in the previous year same period.

The contract bookstores operators reported Q2 FY17 net income of $29.29 million, or $0.63 per diluted share, compared to $33.40million, or $0.69 per diluted share, in the prior year’s comparable quarter. Wall-Street had expected the company to report Q2 FY17 net income of $0.78 per diluted share. Furthermore, adjusted earnings for the reported quarter came in at $29.68 million compared to $33.40 million in the prior year’s same quarter.

In Q2 FY17, Barnes & Noble Education inaugurated 1 new store, totaling total new stores in FY17 to 34. As of October 29, 2016, the company operated at 771 locations. Furthermore, the company intends to add 2 more stores in the second half of the year, bringing the total estimated annual sales of new stores to $118 million.

Operating Metrics

The company’s Q2 FY17 gross profit fell to $171.51 million, or 22.3% of sales, from $175.12 million, or 23.2% of sales, in Q2 FY16. In Q2 FY17, the company reported selling, general, and administrative expenses of $101.77 million versus $102.44 million in Q2 FY16. The company’s operating income fell to $56.76 million, or 7.4% of sales, in Q2 FY17 from $59.51million, or 7.9% of sales, in Q2 FY16. Furthermore, adjusted EBITDA was down to $70.39 million in Q2 FY17 from $72.68 million in the prior year’s comparable quarter.

Balance Sheet

During the reported quarter, net cash flows from operations was an improvement of $97.8 million compared to last year, primarily due to the timing of vendor payments along with other working capital improvements. Capital expenditures for Q2 FY17 were $11.3 million compared to $12.8 million in the prior year’s same period. As on October 29, 2016, the company had cash and cash equivalents of $176.58 million compared to $88.65 million as on October 31, 2015.

Share Repurchase and Dividends

During the reported period, Barnes & Noble Education repurchased approximately 13,000 shares for $150,000. The company has repurchased approximately 690,000 shares for approximately $6.7 million during the first half of FY17. Furthermore, the company has approximately $27 million remaining under its share repurchase program.

Outlook

For full year FY17, Barnes & Noble Education’s expects total sales to increase by 3% to 4%; while comparable store sales are forecasted to decline by 2% to 3% y-o-y. The company anticipates adjusted EBITDA to increase in the mid-single-digits percentage points and capital expenditures projected to be approximately $40 million.

Stock Performance

At the closing bell, on Tuesday, December 13, 2016, Barnes & Noble Education’s stock climbed 1.83%, ending the trading session at $12.22. A total volume of 536.44 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 205.91 thousand shares. In the last month and previous three months, shares of the company have rallied 17.50% and 27.96%, respectively. Moreover, the stock surged 22.81% since the start of the year. The stock currently has a market cap of $544.65 million.

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