10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

FORM 10-Q

_______________________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2021

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission File Number: 1-37499

_______________________________________________

BARNES & NOBLE EDUCATION, INC.

(Exact Name of Registrant as Specified in Its Charter)

_______________________________________________

Delaware			46-0599018
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)
120 Mountain View Blvd.,	Basking Ridge,	NJ	07920
(Address of Principal Executive Offices)			(Zip Code)

(Registrant’s Telephone Number, Including Area Code): (908) 991-2665

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbol	Name of Exchange on which registered
Common Stock, $0.01 par value per share	BNED	New York Stock Exchange

_______________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of August 27, 2021, 51,587,330 shares of Common Stock, par value $0.01 per share, were outstanding.

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Fiscal Quarter Ended July 31, 2021

Index to Form 10-Q

			Page No.
PART I -	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations – For the 13 weeks ended July 31, 2021 and August 1, 2020		3
	Condensed Consolidated Balance Sheets – As of July 31, 2021, August 1, 2020, and May 1, 2021		4
	Condensed Consolidated Statements of Cash Flows – For the 13 weeks ended July 31, 2021 and August 1, 2020		5
	Condensed Consolidated Statements of Equity – As of July 31, 2021 and August 1, 2020		6
	Notes to Condensed Consolidated Financial Statements		7
	Note 1.	Organization	7
	Note 2.	Summary of Significant Accounting Policies	8
	Note 3.	Revenue	12
	Note 4.	Segment Reporting	13
	Note 5.	Equity and Earnings Per Share	15
	Note 6.	Fair Value Measurements	15
	Note 7.	Credit Facility	16
	Note 8.	Leases	16
	Note 9.	Supplementary Information	18
	Note 10.	Employee Benefit Plans	18
	Note 11.	Long-Term Incentive Plan Compensation Expense	18
	Note 12.	Income Taxes	19
	Note 13.	Legal Proceedings	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
	Overview		20
	Results of Operations		23
	Adjusted Earnings, Adjusted EBITDA, and Free Cash Flow (non-GAAP)		30
	Liquidity and Capital Resources		33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		36
Item 4.	Controls and Procedures		36
PART II -	OTHER INFORMATION
Item 1.	Legal Proceedings		37
Item 1A.	Risk Factors		37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 5.	Other Information		38
Item 6.	Exhibits		38
	SIGNATURES		39

2

PART I - FINANCIAL INFORMATION

Item 1:    Financial Statements

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(unaudited) 

	13 weeks ended
	July 31, 2021		August 1, 2020
Sales:
Product sales and other	$	227,770	$	193,210
Rental income	13,024		10,804
Total sales	240,794		204,014
Cost of sales:
Product and other cost of sales	174,161		165,765
Rental cost of sales	6,604		7,387
Total cost of sales	180,765		173,152
Gross profit	60,029		30,862
Selling and administrative expenses	86,235		70,043
Depreciation and amortization expense	12,624		14,063
Restructuring and other charges	2,623		5,671
Operating loss	(41,453)		(58,915)
Interest expense, net	2,494		2,653
Loss before income taxes	(43,947)		(61,568)
Income tax expense (benefit)	399		(14,916)
Net loss	$	(44,346)	$	(46,652)
Loss per share of common stock:
Basic	$	(0.86)	$	(0.96)
Diluted	$	(0.86)	$	(0.96)
Weighted average shares of common stock outstanding:
Basic	51,474		48,411
Diluted	51,474		48,411

See accompanying notes to condensed consolidated financial statements.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data) 

	July 31, 2021		August 1, 2020		May 1, 2021
	(unaudited)		(unaudited)		(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	7,649	$	7,471	$	8,024
Receivables, net	118,254		107,522		121,072
Merchandise inventories, net	472,461		575,246		281,112
Textbook rental inventories	6,657		16,482		28,692
Prepaid expenses and other current assets	64,724		22,415		61,933
Total current assets	669,745		729,136		500,833
Property and equipment, net	91,080		94,102		89,172
Operating lease right-of-use assets	289,102		320,287		240,456
Intangible assets, net	146,035		170,466		150,904
Goodwill	4,700		4,700		4,700
Deferred tax assets, net	23,248		8,459		23,248
Other noncurrent assets	27,405		33,646		29,105
Total assets	$	1,251,315	$	1,360,796	$	1,038,418
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	331,055	$	291,496	$	137,578
Accrued liabilities	92,061		75,084		92,871
Current operating lease liabilities	135,937		131,525		92,513
Short-term borrowings	50,000		—		50,000
Total current liabilities	609,053		498,105		372,962
Long-term operating lease liabilities	179,540		209,867		184,780
Other long-term liabilities	52,427		45,986		52,042
Long-term borrowings	153,700		234,560		127,600
Total liabilities	994,720		988,518		737,384
Commitments and contingencies	—		—		—
Stockholders' equity:
Preferred stock, $0.01 par value; authorized, 5,000 shares; 0 shares issued and 0 shares outstanding	—		—		—
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 53,665, 52,654 and 53,327 shares, respectively; outstanding, 51,587, 48,633 and 51,379 shares, respectively	536		526		533
Additional paid-in capital	735,376		734,474		734,257
Accumulated deficit	(458,960)		(329,479)		(414,614)
Treasury stock, at cost	(20,357)		(33,243)		(19,142)
Total stockholders' equity	256,595		372,278		301,034
Total liabilities and stockholders' equity	$	1,251,315	$	1,360,796	$	1,038,418

See accompanying notes to condensed consolidated financial statements.

4

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

	13 weeks ended
	July 31, 2021		August 1, 2020
Cash flows from operating activities:
Net loss	$	(44,346)	$	(46,652)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization expense	12,624		14,063
Content amortization expense	1,275		1,164
Amortization of deferred financing costs	362		270
Merchandise inventory loss	434		—
Deferred taxes	—		(654)
Stock-based compensation expense	1,122		1,521
Changes in other long-term assets and liabilities, net	1,814		1,424
Changes in operating lease right-of-use assets and liabilities	(10,464)		(6,770)
Changes in other operating assets and liabilities, net	19,717		(17,515)
Net cash flows used in operating activities	(17,462)		(53,149)
Cash flows from investing activities:
Purchases of property and equipment	(11,370)		(7,055)
Net change in other noncurrent assets	350		(85)
Net cash flows used in investing activities	(11,020)		(7,140)
Cash flows from financing activities:
Proceeds from borrowings under Credit Agreement	71,720		186,700
Repayments of borrowings under Credit Agreement	(45,620)		(126,840)
Purchase of treasury shares	(1,215)		(342)
Net cash flows provided by financing activities	24,885		59,518
Net decrease in cash, cash equivalents and restricted cash	(3,597)		(771)
Cash, cash equivalents and restricted cash at beginning of period	16,814		9,008
Cash, cash equivalents and restricted cash at end of period	$	13,217	$	8,237
Changes in other operating assets and liabilities, net:
Receivables, net	$	2,818	$	(16,671)
Merchandise inventories	(191,783)		(146,307)
Textbook rental inventories	22,035		24,228
Prepaid expenses and other current assets	(6,012)		(6,238)
Accounts payable and accrued liabilities	192,659		127,473
Changes in other operating assets and liabilities, net	$	19,717	$	(17,515)

See accompanying notes to condensed consolidated financial statements.

5

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(In thousands)

(unaudited)

				Additional
	Common Stock			Paid-In		Accumulated		Treasury Stock			Total
	Shares	Amount		Capital		Deficit		Shares	Amount		Equity
Balance at May 2, 2020	52,140	$	521	$	732,958	$	(282,827)	3,842	$	(32,901)	$	417,751
Stock-based compensation expense				1,521							1,521
Vested equity awards	514	5		(5)							—
Shares repurchased for tax withholdings for vested stock awards								179	(342)		(342)
Net loss						(46,652)					(46,652)
Balance August 1, 2020	52,654	$	526	$	734,474	$	(329,479)	4,021	$	(33,243)	$	372,278
				Additional
	Common Stock			Paid-In		Accumulated		Treasury Stock			Total
	Shares	Amount		Capital		Deficit		Shares	Amount		Equity
Balance at May 1, 2021	53,327	$	533	$	734,257	$	(414,614)	1,948	$	(19,142)	$	301,034
Stock-based compensation expense				1,122							1,122
Vested equity awards	338	3		(3)							—
Shares repurchased for tax withholdings for vested stock awards								130	(1,215)		(1,215)
Net loss						(44,346)					(44,346)
Balance July 31, 2021	53,665	$	536	$	735,376	$	(458,960)	2,078	$	(20,357)	$	256,595

See accompanying notes to condensed consolidated financial statements.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Unless the context otherwise indicates, references in these Notes to the accompanying condensed consolidated financial statements to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education or "BNED", Inc., a Delaware corporation. References to “Barnes & Noble College” refer to our college bookstore business operated through our subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to our virtual bookstore and wholesale textbook distribution business operated through our subsidiary MBS Textbook Exchange, LLC.

This Form 10-Q should be read in conjunction with our Audited Consolidated Financial Statements and accompanying Notes to consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021, which includes consolidated financial statements for the Company for each of the three fiscal years ended May 1, 2021, May 2, 2020 and April 27, 2019 (Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively).

Note 1. Organization

Description of Business

Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers, and a leading provider of digital education solutions. We operate 1,429 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omnichannel retail environment. Additionally, we offer direct-to-student products and services to help students study more effectively and improve academic performance.

The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We expect to continue to introduce scalable and advanced digital solutions focused largely on the student, expand our e-commerce capabilities and accelerate such capabilities through our recent merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”) (collectively referred to herein as the “FLC Partnership”), increase market share with new accounts, and expand our strategic opportunities through acquisitions and partnerships. We expect general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the “FLC Partnership”. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo and emblematic general merchandise business.

We believe the Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels, and for being a trusted source for students in our direct-to-student digital solutions business.

We have three reportable segments: Retail, Wholesale and DSS. For additional information related to our strategies, operations and segments, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Partnership with Fanatics and FLC

In December 2020, we entered into the FLC Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with FLC, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.

We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that

7

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

reflect each campus’s brand. We leverage Fanatics’ e-commerce technology and expertise for the operational management of the emblematic merchandise and gift sections of our campus store websites. FLC manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores.

In December 2020, Fanatics, Inc. and Lids Holdings, Inc. jointly made a strategic equity investment in BNED. On April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC, which was finalized during the first quarter of Fiscal 2022. As contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products during the first quarter of Fiscal 2022. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories and Note 6. Equity and Earnings Per Share in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

COVID-19 Business Impact

Since the fourth quarter of Fiscal 2020, our business has been significantly negatively impacted by the COVID-19 pandemic, resulting in an unprecedented material decline in revenue. Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools currently expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities and events, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic.

The COVID-19 impact on higher education remains a fluid situation, and we are committed to supporting our campus partners through our flexible offerings and our ability to quickly pivot to ensure uninterrupted service as institutions manage the safety of their campuses. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors currently in place change, there could be a further impact on our results of operations, financial condition and cash flows from operations. We will continue to assess our operations and will continue to consider the guidance of local governments and our campus partners to determine when our operations can begin returning to normal levels of business. Please see our Part II - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These condensed consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.

Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended July 31, 2021 are not indicative of the results expected for the 52 weeks ending April 30, 2022 (Fiscal 2022).

For certain of our retail operations, sales are generally highest in the second and third fiscal quarters, when students purchase and rent textbooks and other course materials for the typical academic year, and lowest in the first and fourth fiscal quarters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as MBS sells textbooks and other course materials for retail distribution. Our DSS segment sales and operating profit are realized relatively consistently throughout the year.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Use of Estimates

In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

Cost is determined primarily by the retail inventory method for our Retail segment and last-in first out, or “LIFO”, method for our Wholesale segment. Our textbook inventories, for Retail and Wholesale, and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories.

For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.

As contemplated by the FLC Partnership merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC and received proceeds of $41,773, and recognized a merchandise inventory loss on the sale of $10,262 in cost of goods sold during the 52 weeks ended May 1, 2021 for the Retail Segment. The final inventory sale price was determined during the first quarter of Fiscal 2022. During the 13 weeks ended July 31, 2021, we received additional proceeds of $1,906, and recognized a merchandise inventory loss on the sale of $434 in cost of goods sold for the Retail Segment.

Textbook Rental Inventories

Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.

Leases

We recognize lease assets and lease liabilities on the condensed consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases. We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. For additional information, see Note 8. Leases.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.

Revenue from the rental of physical textbooks, which contains a single performance obligation, is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.

Revenue from the rental of digital textbooks, which contains a single performance obligation, is recognized at the point of sale. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the rental term the customer is no longer able to access the content. While the digital rental allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.

We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.

For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis. Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.

Service and other revenue

Service and other revenue is primarily derived from DSS segment subscription-based service revenues and partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers.

Subscription-based revenue, which contains a single performance obligation, is deferred and recognized based on the passage of time over the subscription period commencing at the point of sale, when control of the service transfers to the customer. The majority of subscriptions sold are one month in duration.

Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Cost of Sales

Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.

Selling and Administrative Expenses

Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting, and operating costs related to our DSS segment subscription-based services business. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services.

Evaluation of Goodwill and Other Long-Lived Assets

As of July 31, 2021, we had $0, $0 and $4,700 of goodwill on our condensed consolidated balance sheet related to our Retail, Wholesale and DSS reporting units, respectively. In accordance with ASC 350-10, Intangibles - Goodwill and Other, we complete our annual goodwill impairment test as of the first day of the third quarter of each fiscal year, or whenever events or changes in circumstances indicate that the carrying amount of the reporting unit exceeds its fair value. We completed our annual goodwill impairment test as of the first day of the third quarter of Fiscal 2021. The fair value of the DSS reporting unit was determined to exceed the carrying value of the reporting unit; therefore, no goodwill impairment was recognized.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. As of July 31, 2021, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $91,080, $289,102, $146,035, and $27,405, respectively, on our condensed consolidated balance sheet.

Our business has been significantly negatively impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning models and on-campus activities. We believe many of the negative trends impacting our results, such as fewer students returning to campus and fewer restrictions for athletic conferences, will be marginally reversed in the upcoming Fall semester. Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools currently expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic. We believe indicators of impairment do not exist and the carrying amount of our long-lived assets and property and equipment are recoverable and the fair value of the DSS reporting unit continues to exceed the carrying value of the reporting unit resulting in no goodwill impairment during the quarter. We will continue to evaluate our other long-lived assets for indicators of impairment.

Income Taxes

As of July 31, 2021, other long-term liabilities includes $25,335 related to the long-term tax payable associated with the LIFO reserve. The LIFO reserve is impacted by changes in the consumer price index (“CPI”) and is dependent on the inventory levels at the end of our tax year (on or about January 31st) which is in the middle of our second largest selling cycle. At the end of the most recent tax year, inventory levels declined as compared to the prior year resulting in approximately $745 of the LIFO reserve becoming currently payable. Given recent trends relating to the pricing and rental of textbooks, management believes that an additional portion of the remaining long-term tax payable associated with the LIFO reserve could be payable within the next twelve months. We are unable to predict future trends for CPI and inventory levels, therefore it is difficult to project with reasonable certainty how much of this liability will become payable within the next twelve months.

11

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Note 3. Revenue

Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services. See Note 2. Summary of Significant Accounting Policies for additional information related to our revenue recognition policies and Note 4. Segment Reporting for a description of each segment's product and service offerings.

Disaggregation of Revenue

The following table disaggregates the revenue associated with our major product and service offerings:

	13 weeks ended
	July 31, 2021		August 1, 2020
Retail
Product Sales (a)	$	189,058	$	141,826
Rental Income	13,024		10,804
Service and Other Revenue (b)	8,387		6,146
Retail Total Sales	$	210,469	$	158,776
Wholesale Sales	$	44,484	$	80,294
DSS Sales (c)	$	8,303	$	5,872
Eliminations (d)	$	(22,462)	$	(40,928)
Total Sales	$	240,794	$	204,014

(a)Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

(b)Service and other revenue primarily relates to brand partnerships and other service revenues.

(c)DSS sales primarily relate to direct-to-student subscription-based revenue.

(d)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

Contract Assets and Contract Liabilities

Contract assets represent the sale of goods or services to a customer before we have the right to obtain consideration from the customer. Contract assets consist of unbilled amounts at the reporting date and are transferred to accounts receivable when the rights become unconditional. Contract assets (unbilled receivables) were $0 as of July 31, 2021, August 1, 2020 and May 1, 2021 on our condensed consolidated balance sheets.

Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue). Deferred revenue consists of the following:

•advanced payments from customers related to textbook rental and subscription-based performance obligations, which are recognized ratably over the terms of the related rental or subscription periods;

•unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to our partnership marketing customers; and

•unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the e-commerce and merchandising contracts for Fanatics and FLC, respectively.

Deferred revenue of $16,028, $16,270, and $13,469 is recorded in accrued liabilities and $4,561, $0, and $4,670 is recorded in other long-term liabilities on our condensed consolidated balance sheets for the periods ended July 31, 2021,

12

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

August 1, 2020 and May 1, 2021, respectively. As of July 31, 2021, we expect to recognize $16,028 of the deferred revenue balance within the next 12 months. The following table presents changes in contract liabilities:

	13 weeks ended
	July 31, 2021		August 1, 2020
Deferred revenue at the beginning of period	$	18,139	$	13,373
Additions to deferred revenue during the period	21,857		21,411
Reductions to deferred revenue for revenue recognized during the period	(19,407)		(18,514)
Deferred revenue balance at the end of period	$	20,589	$	16,270

Note 4. Segment Reporting

We have three reportable segments: Retail, Wholesale and DSS. Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, continue to be presented as “Corporate Services”.

We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the three segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Retail

The Retail Segment operates 1,429 college, university, and K-12 school bookstores, comprised of 784 physical bookstores and 645 virtual bookstores. Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products. The majority of the physical campus bookstores have school-branded e-commerce sites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts. The Retail Segment also offers inclusive access programs, in which course materials are offered at a reduced price through a fee charged by the institution or included in tuition, and delivered to students on or before the first day of class. Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.

Wholesale

The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country. The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 3,200 physical bookstores (including our Retail Segment's 784 physical bookstores) and sources and distributes new and used textbooks to our 645 virtual bookstores. Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores.

DSS

The Digital Student Solutions (“DSS”) Segment includes direct-to-student products and services to assist students to study more effectively and improve academic performance. The DSS Segment is comprised of the operations of Student Brands, LLC, a leading direct-to-student subscription-based writing services business, and bartleby®, a direct-to-student subscription-based offering providing textbook solutions, expert questions and answers, writing and tutoring

Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.

Intercompany Eliminations

The eliminations are primarily related to the following intercompany activities:

•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and

13

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.

Our international operations are not material and the majority of the revenue and total assets are within the United States.

Summarized financial information for our reportable segments is reported below:

	13 weeks ended
	July 31, 2021		August 1, 2020
Sales:
Retail	$	210,469	$	158,776
Wholesale	44,484		80,294
DSS	8,303		5,872
Elimination	(22,462)		(40,928)
Total Sales	$	240,794	$	204,014
Gross Profit
Retail (a)	$	48,143	$	16,135
Wholesale	10,405		16,757
DSS	7,030		4,746
Elimination	(5,549)		(6,776)
Total Gross Profit	$	60,029	$	30,862
Depreciation and Amortization
Retail	$	9,407	$	10,570
Wholesale	1,300		1,295
DSS	1,899		2,165
Corporate Services	18		33
Total Depreciation and Amortization	$	12,624	$	14,063
Operating Loss
Retail	$	(31,356)	$	(54,816)
Wholesale	5,114		11,671
DSS	(1,316)		(1,455)
Corporate Services	(8,358)		(7,552)
Elimination	(5,537)		(6,763)
Total Operating Loss	$	(41,453)	$	(58,915)

	13 weeks ended
Reconciliation of segment Operating Loss to consolidated Loss Before Income Taxes:	July 31, 2021		August 1, 2020
Total Operating Loss	$	(41,453)	$	(58,915)
Interest Expense, net	2,494		2,653
Loss Before Income Taxes	$	(43,947)	$	(61,568)

(a)    For the 13 weeks ended July 13, 2021, gross margin includes a merchandise inventory loss of $434 in the Retail Segment. See Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

14

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Note 5. Equity and Earnings Per Share

Equity

Share Repurchases

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50,000, in the aggregate, of our outstanding Common Stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the 13 weeks ended July 31, 2021, we did not repurchase shares of our Common Stock under the program and as of July 31, 2021, approximately $26,669 remains available under the stock repurchase program.

During the 13 weeks ended July 31, 2021, we repurchased 130,135 shares of our Common Stock outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Earnings Per Share

Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. During the 13 weeks ended July 31, 2021 and August 2, 2020, average shares of 3,665,606 and 2,665,779 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. The following is a reconciliation of the basic and diluted earnings per share calculation:

	13 weeks ended
(shares in thousands)	July 31, 2021		August 1, 2020
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(44,346)	$	(46,652)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	51,474		48,411
Loss per share of Common Stock:
Basic	$	(0.86)	$	(0.96)
Diluted	$	(0.86)	$	(0.96)

Note 6. Fair Value Measurements

In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions

15

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair values of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.

Non-Financial Assets

Our non-financial assets include goodwill, property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.

Non-Financial Liabilities

We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of July 31, 2021, we recorded a liability of $6,317 (Level 2 input) which is reflected in accrued liabilities ($4,173) and other long-term liabilities ($2,144) on the condensed consolidated balance sheet.

Note 7. Credit Facility

We have a credit agreement (the “Credit Agreement”), amended March 31, 2021 and March 1, 2019, under which the lenders committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400,000 (the “Credit Facility”) effective from the date of the amendment. We have the option to request an increase in commitments under the Credit Facility of up to $100,000, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement includes an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100,000 incremental facility maintaining the maximum availability under the Credit Agreement at $500,000. On March 31, 2021, we were granted a waiver to the condition to the current draw under the FILO Facility.

For additional information including interest terms and covenant requirements related to the Credit Facility, refer to Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

During the 13 weeks ended July 31, 2021, we borrowed $71,720 and repaid $45,620 under the Credit Agreement, with $203,700 of outstanding borrowings as of July 31, 2021, comprised of $153,700 and $50,000 under the Credit Facility and FILO Facility, respectively. During the 13 weeks ended August 1, 2020, we borrowed $186,700 and repaid $126,840 under the Credit Agreement, with $234,560 of outstanding borrowings as of August 1, 2020, comprised entirely of borrowings under the Credit Facility. As of both July 31, 2021 and August 1, 2020, we have issued $4,759 in letters of credit under the Credit Facility.

Note 8. Leases

We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).

We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii)

16

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.

We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

The following table summarizes lease expense:

	13 weeks ended
	July 31, 2021		August 1, 2020
Variable lease expense	$	11,702	$	7,407
Operating lease expense	16,373		9,796
Net lease expense	$	28,075	$	17,203

The increase in lease expense is primarily due to higher sales for contracts based on a percentage of revenue during the 13 weeks ended July 31, 2021 and the impact of the timing and reduction of minimum contractual guarantees due to temporary store closings due to the COVID pandemic during the 13 weeks ended August 1, 2020.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of July 31, 2021:

	As of
	July 31, 2021
Remainder of Fiscal 2022	$	128,412
Fiscal 2023	49,419
Fiscal 2024	42,392
Fiscal 2025	37,372
Fiscal 2026	28,146
Thereafter	72,676
Total lease payments	358,417
Less: imputed interest	(42,940)
Operating lease liabilities at period end	$	315,477

Future lease payment obligations related to leases that were entered into, but did not commence as of July 31, 2021, were not material.

The following summarizes additional information related to our operating leases:

	As of
	July 31, 2021			August 1, 2020
Weighted average remaining lease term (in years)	5.1 years			5.4 years
Weighted average discount rate	4.3		%	4.4		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	27,378		$	16,676
ROU assets obtained in exchange for lease liabilities from initial recognition	$	67,106		$	89,167

17

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

Note 9. Supplementary Information

Restructuring and other charges

During the 13 weeks ended July 31, 2021, we recognized restructuring and other charges totaling $2,623 comprised primarily of $1,550 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($2,369 is included in accrued liabilities in the consolidated balance sheet as of July 31, 2021), $983 for professional service costs related to restructuring, process improvements, costs related to development and integration associated with the FLC Partnership, and shareholder activist activities, and $91 related to liabilities for a facility closure.

During the 13 ended August 1, 2020, we recognized restructuring and other charges totaling $5,671 comprised of $3,396 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($10,562 is included in accrued liabilities in the consolidated balance sheet as of August 1, 2020), and $2,103 for professional service costs related to restructuring, process improvements, and shareholder activities, and $172 related to liability for a facility closure.

Note 10. Employee Benefit Plans

We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC and DSS. MBS maintains a profit sharing plan covering substantially all full-time employees of MBS. For all plans, we are responsible to fund the employer contributions directly. Total employee benefit expense for these plans was $44 and $73 during the 13 weeks ended July 31, 2021 and August 1, 2020, respectively.

Effective April 2020, due to the significant impact as a result of COVID-19 related campus store closures, we temporarily suspended employer matching contributions into our 401(k) plans. The matching contributions were reinstated effective July 25, 2021.

Note 11. Long-Term Incentive Plan Compensation Expense

We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied.

For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:

	13 weeks ended
	July 31, 2021		August 1, 2020
Stock-based awards
Restricted stock expense	$	88	$	30
Restricted stock units expense	730		1,359
Performance share units expense	34		132
Stock option expense	270		—
Sub-total stock-based awards:	$	1,122	$	1,521
Cash settled awards
Phantom share units expense	$	2,472	$	—
Total compensation expense for long-term incentive awards	$	3,594	$	1,521

18

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the 13 weeks ended July 31, 2021 and August 1, 2020

(Thousands of dollars, except share and per share data)

(unaudited)

During the 13 weeks ended July 31, 2021, no awards were granted under the Equity Incentive Plan. Total unrecognized compensation cost related to unvested awards as of July 31, 2021 was $8,415 and is expected to be recognized over a weighted-average period of 2.2 years.

Note 12. Income Taxes

We recorded an income tax expense of $399 on a pre-tax loss of $(43,947) during the 13 weeks ended July 31, 2021, which represented an effective income tax rate of (0.9)% and income tax benefit of $(14,916) on a pre-tax loss of $(61,568) during the 13 weeks ended August 1, 2020, which represented an effective income tax rate of 24.2%.

In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of July 31, 2021, we determined that it was more likely than not that we would not realize certain deferred tax assets and our tax rate for the current fiscal year reflects this determination. We will continue to evaluate this position.

The effective tax rate for the 13 weeks ended July 31, 2021 is lower as compared to the prior year comparable period due to the assessment of the realization of deferred tax assets.

Note 13. Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows.

Between January 22, 2020 and June 15, 2020, thirteen purported class action complaints were filed against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association, by retailers of collegiate course materials or current or former college students. Although the specific allegations vary, the plaintiffs generally claim, on their own behalf and on behalf of the purported classes, that the Company and the other defendants violated Section 1 of the Sherman Act (15 U.S.C. § 1), Section 2 of the Sherman Act (15 U.S.C. § 2), Section 13(a) of the Robinson-Patman Act (15 U.S.C. §13(a)), and various state antitrust and unfair trade practices laws for alleged activities in connection with inclusive access and the sale of course materials to universities and their students. The United States Judicial Panel on Multidistrict Litigation consolidated these and other related cases in a consolidated proceeding before the Hon. Denise L. Cote of the United States District Court for the Southern District of New York. On June 14, 2021, the Court granted defendants' motion to dismiss both cases dismissed with prejudice. Neither Plaintiff group sought to appeal those decisions. The orders dismissing the cases are now final and the matter has concluded.

19

Item 2:    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise indicates, references to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education, Inc. or “BNED”, a Delaware corporation. References to “Barnes & Noble College” or “BNC” refer to our subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to our subsidiary MBS Textbook Exchange, LLC.

Overview

Description of Business

Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers, and a leading provider of digital education solutions. We operate 1,429 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omnichannel retail environment. Additionally, we offer direct-to-student products and services to help students study more effectively and improve academic performance.

The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We expect to continue to introduce scalable and advanced digital solutions focused largely on the student, expand our e-commerce capabilities and accelerate such capabilities through our recent merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”) (collectively referred to herein as the “FLC Partnership”), increase market share with new accounts, and expand our strategic opportunities through acquisitions and partnerships.

We expect general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the FLC Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo and emblematic general merchandise business.

We believe the Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels, and for being a trusted source for students in our direct-to-student digital solutions business.

For additional information related to our business, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Wolfram|Alpha Agreement

During the first quarter of Fiscal 2022, we launched Math Solver, a new bartleby® product feature that is powered by Wolfram|Alpha best-in-class computation engine. Math Solver allows students to access an interactive digital calculator that provides real-time, step-by-step explanations for even the most advanced math problems in subjects such as Algebra, Pre-Calc, Calculus.

Partnership with Fanatics and FLC

In December 2020, we entered into the FLC Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with FLC, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.

We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that reflect each campus’s brand. We leverage Fanatics’ e-commerce technology and expertise for the operational management of the emblematic merchandise and gift sections of our campus store websites. FLC manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores.

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In December 2020, Fanatics, Inc. and Lids Holdings, Inc. jointly made a strategic equity investment in BNED. On April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC, which was finalized during the first quarter of Fiscal 2022. As contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products during the first quarter of Fiscal 2022. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year. For additional information, see Item 1. Financial Statements - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

COVID-19 Business Impact

Our business experienced an unprecedented and significant negative impact as a result of COVID-19 related campus store closures. Beginning in March 2020, colleges and universities nationwide began to close their campuses in light of safety concerns and as a result of local and state issued stay-at-home orders. By mid-March, during our Fiscal 2020 fourth quarter, we closed the majority of our physical campus stores to protect the health and safety of our customers and employees.

While our campus stores were closed, we continued to serve institutions and students through our campus websites, providing free shipping on all orders and an expanded digital content offering to provide immediate access to course materials to students at our campuses that closed due to COVID-19. We developed and implemented plans to safely reopen our campus stores based on national, state and local guidelines, as well as the campus policies set by the school administration.

Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities and events, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic. We will continue to assess our operations and will continue to consider the guidance of local governments and our campus partners to determine when our operations can begin returning to normal levels of business. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors currently in place change, there could be a further impact on our results of operations, financial condition and cash flows from operations. For additional information, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Segments

We have three reportable segments: Retail, Wholesale and DSS. Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, continue to be presented as “Corporate Services”.

We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the three segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Retail Segment

The Retail Segment operates 1,429 college, university, and K-12 school bookstores, comprised of 784 physical bookstores and 645 virtual bookstores. Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products. The majority of the physical campus bookstores have school-branded e-commerce sites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts. The Retail Segment also offers inclusive access programs, in which course materials are offered at a reduced price through a fee charged by the institution or included in tuition, and delivered to students on or before the first day of class. Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.

Wholesale Segment

The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country. The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 3,200 physical bookstores (including our Retail Segment's 784 physical bookstores) and sources and distributes new and used textbooks to our 645 virtual bookstores. Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores.

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DSS Segment

The Digital Student Solutions (“DSS”) Segment includes direct-to-student products and services to assist students to study more effectively and improve academic performance. The DSS Segment is comprised of the operations of Student Brands, LLC, a leading direct-to-student subscription-based writing services business, and bartleby®, a direct-to-student subscription-based offering providing textbook solutions, expert questions and answers, writing and tutoring.

Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.

Seasonality

Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April.

For our retail operations, sales are generally highest in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials, and lowest in the first and fourth fiscal quarters. Sales attributable to our wholesale business are generally highest in our first, second and third quarter, as it sells textbooks and other course materials for retail distribution. For our DSS segment, or direct-to-student business, sales and operating profit are realized relatively consistently throughout the year.

Trends, Competition and Other Business Conditions Affecting Our Business

The market for educational materials is undergoing unprecedented change. As tuition and other costs rise, colleges and universities face increasing pressure to attract and retain students and provide them with innovative, affordable educational content and tools that support their educational development. Current trends, competition and other factors affecting our business include:

•Overall Economic Environment, College Enrollment and Consumer Spending Patterns. Our business is affected by the impact of the COVID-19 pandemic, the overall economic environment, funding levels at colleges and universities, by changes in enrollments at colleges and universities, and spending on course materials and general merchandise.

•Impact of the COVID-19 Pandemic: The COVID-19 pandemic has materially and adversely impacted certain segments of the U.S. economy, with legislative and regulatory responses including unprecedented monetary and fiscal policy actions across all sectors, and there is significant uncertainty as to timing of stabilization and recovery, including the ability to gain adequate herd-immunity levels through vaccine programs and their resilience to future virus variants. Many colleges and K-12 schools have been required to cease in-person classes in an attempt to limit the spread of the COVID-19 virus and ensure the safety of their students. Although many academic institutions have reopened, they are considering alternatives to traditional in-person instruction, including online learning and significantly reduced classroom sizes. Additionally, while many athletic conferences resumed their sport activities, fan attendance at the games was either eliminated or severely restricted, which further impacted the company’s high-margin general merchandise business.

•Economic Environment: Retail general merchandise sales are subject to short-term fluctuations driven by the broader retail environment.

•Enrollment Trends: The growth of our business depends on our ability to attract new customers and to increase the level of engagement by our current student customers. We continue to see downward enrollment trends and shrinking resources from state and federal government for colleges and universities. Enrollment trends, specifically at community colleges, generally correlate with changes in the economy and unemployment factors, e.g. low unemployment tends to lead to low enrollment and higher unemployment rates tend to lead to higher enrollment trends, as students generally enroll to obtain skills that are in demand in the workforce. Enrollment trends have been negatively impacted overall by COVID-19 concerns at physical campuses. A significant reduction in U.S. economic activity and increased unemployment could lead to decreased enrollment and consumer spending. Additionally, enrollment trends are impacted by the dip in the United States birth rate resulting in fewer students at the traditional 18-24 year-old college age. Online degree program enrollments continue to grow, even in the face of declining overall higher education enrollment.

•Increased Use of Online and Digital Platforms as Companions or Alternatives to Printed Course Materials. Students and faculty can now choose from a wider variety of educational content and tools than ever before, delivered across both print and digital platforms.

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•Increasing Costs Associated with Defending Against Security Breaches and Other Data Loss, Including Cyber-Attacks. We are increasingly dependent upon information technology systems, infrastructure and data. Cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. We continue to invest in data protection and information technology to prevent or minimize these risks and, to date, we have not experienced any material service interruptions and are not aware of any material breaches.

•Distribution Network Evolving. The way course materials are distributed and consumed is changing significantly, a trend that is expected to continue. The market for course materials, including textbooks and supplemental materials, is intensely competitive and subject to rapid change.

•Disintermediation. We are experiencing growing competition from alternative media and alternative sources of textbooks and other course materials. In addition to the official physical or virtual campus bookstore, course materials are also sold through off-campus bookstores, e-commerce outlets, digital platform companies, publishers, including Cengage, Pearson and McGraw Hill, bypassing the bookstore distribution channel by selling or renting directly to students and educational institutions, and student-to-student transactions over the Internet.

•Supply Chain and Inventory. Since the demand for used textbooks has historically been greater than the available supply, our financial results are highly dependent upon Wholesale’s ability to build its textbook inventory from suppliers in advance of the selling season. Recently, the impact of fewer students on campus due to COVID-19 has significantly impacted our on-campus buyback programs which supplies Wholesale’s used textbook inventory for future selling periods. Some textbook publishers have begun to supply textbooks pursuant to consignment or rental programs which could impact used textbook supplies in the future. Additionally, Wholesale is a national distributor for rental textbooks offered through McGraw-Hill Education's and Pearson Education’s consignment rental program, both of which are relatively nascent.

•Price Competition. In addition to the competition in the services we provide to our customers, our textbook and other course materials business faces significant price competition. Students purchase textbooks and other course materials from multiple providers, are highly price sensitive, and can easily shift spending from one provider or format to another.

•A Large Number of Traditional Campus Bookstores Have Yet to be Outsourced.

•Outsourcing Trends. We continue to see the trend towards outsourcing in the campus bookstore market and also continue to see a variety of business models being pursued for the provision of course materials (such as inclusive access programs and publisher subscription models) and general merchandise.

•New and Existing Bookstore Contracts. We expect awards of new accounts resulting in new physical and virtual store openings will continue to be an important driver of future growth in our business. We also expect that certain less profitable or essential bookstores we operate may close. Such stores could be included in contracts for stores we operate that may be deemed non-essential; and such stores could be operated by others or independently by schools. The scope of any such store closures remains uncertain, although we are not aware, at this time, of any significant volume of stores which we operate that are likely to close or have informed us of upcoming closures.

For additional discussion of our trends and other factors affecting our business, see Part I - Item 1. Business in our Annual Report on Form 10-K for the year ended May 1, 2021.

Elements of Results of Operations

Our condensed consolidated financial statements reflect our consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). The results of operations reflected in our consolidated financial statements are presented on a consolidated basis. All material intercompany accounts and transactions have been eliminated in consolidation.

Our sales are primarily derived from the sale of course materials, which include new, used and digital textbooks, and at college and university bookstores which we operate, we sell high margin general merchandise, including emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. Our rental income is primarily derived from the rental of physical textbooks. We also derive revenue from other sources, such as sales of inventory management, hardware and point-of-sale software, direct-to-student subscription-based services, and other services.

Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.

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Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting, and operating costs related to our direct-to-student subscription-based services business. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services as discussed in the Overview - Segments discussion above.

Results of Operations - Summary

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Sales:
Product sales and other	$	227,770	$	193,210
Rental income	13,024		10,804
Total sales	$	240,794	$	204,014
Net loss	$	(44,346)	$	(46,652)
Adjusted Earnings (non-GAAP) (a)	$	(40,014)	$	(41,716)
Adjusted EBITDA (non-GAAP) (a)
Retail	$	(19,622)	$	(40,640)
Wholesale	6,414		12,966
DSS	1,692		1,664
Corporate Services	(7,444)		(5,244)
Elimination	(5,537)		(6,763)
Total Adjusted EBITDA (non-GAAP)	$	(24,497)	$	(38,017)

(a)Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. See Adjusted Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) discussion below.

The following table sets forth, for the periods indicated, the percentage relationship that certain items bear to total sales:

	13 weeks ended
	July 31, 2021		August 1, 2020
Sales:
Product sales and other	94.6	%	94.7	%
Rental income	5.4		5.3
Total sales	100.0		100.0
Cost of sales:
Product and other cost of sales (a)	76.5		85.8
Rental cost of sales (a)	50.7		68.4
Total cost of sales	75.1		84.9
Gross margin	24.9		15.1
Selling and administrative expenses	35.8		34.3
Depreciation and amortization expense	5.2		6.9
Restructuring and other charges	1.1		2.8
Operating loss	(17.2)	%	(28.9)	%

(a)Represents the percentage these costs bear to the related sales, instead of total sales.

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Results of Operations - 13 weeks ended July 31, 2021 compared with the 13 weeks ended August 1, 2020

	13 weeks ended, July 31, 2021
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations		Total
Sales:
Product sales and other	$	197,445	$	44,484	$	8,303	$	—	$	(22,462)	$	227,770
Rental income	13,024		—		—		—		—		13,024
Total sales	210,469		44,484		8,303		—		(22,462)		240,794
Cost of sales:
Product and other cost of sales	155,722		34,079		1,273		—		(16,913)		174,161
Rental cost of sales	6,604		—		—		—		—		6,604
Total cost of sales	162,326		34,079		1,273		—		(16,913)		180,765
Gross profit	48,143		10,405		7,030		—		(5,549)		60,029
Selling and administrative expenses	68,365		3,991		6,447		7,444		(12)		86,235
Depreciation and amortization expense	9,407		1,300		1,899		18		—		12,624
Sub-Total:	$	(29,629)	$	5,114	$	(1,316)	$	(7,462)	$	(5,537)	(38,830)
Restructuring and other charges											2,623
Operating loss											$	(41,453)

	13 weeks ended, August 1, 2020
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations		Total
Sales:
Product sales and other	$	147,972	$	80,294	$	5,872	$	—	$	(40,928)	$	193,210
Rental income	10,804		—		—		—		—		10,804
Total sales	158,776		80,294		5,872		—		(40,928)		204,014
Cost of sales:
Product and other cost of sales	135,254		63,537		1,126		—		(34,152)		165,765
Rental cost of sales	7,387		—		—		—		—		7,387
Total cost of sales	142,641		63,537		1,126		—		(34,152)		173,152
Gross profit	16,135		16,757		4,746		—		(6,776)		30,862
Selling and administrative expenses	56,985		3,791		4,036		5,244		(13)		70,043
Depreciation and amortization expense	10,570		1,295		2,165		33		—		14,063
Sub-Total:	$	(51,420)	$	11,671	$	(1,455)	$	(5,277)	$	(6,763)	(53,244)
Restructuring and other charges											5,671
Operating loss											$	(58,915)

Sales

The following table summarizes our sales for the 13 weeks ended July 31, 2021 and August 1, 2020:

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020		%
Product sales and other	$	227,770	$	193,210	17.9%
Rental income	13,024		10,804		20.5%
Total Sales	$	240,794	$	204,014	18.0%

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Sales increased by $36.8 million, or 18.0%, to $240.8 million during the 13 weeks ended July 31, 2021 from $204.0 million during the 13 weeks ended August 1, 2020. The sales increase is primarily related to the impact from re-opening stores that had temporarily closed due to the COVID-19 pandemic in the prior year. The first quarter is typically a low revenue quarter, consisting primarily of summer courses.

The components of the variances for the 13 week periods are reflected in the table below.

Sales variances	13 weeks ended
Dollars in millions	July 31, 2021		August 1, 2020
Retail Sales
New stores	$	10.3	$	7.9
Closed stores	(4.5)		(5.1)
Comparable stores (a)	44.6		(106.6)
Textbook rental deferral	0.2		(6.4)
Service revenue (b)	2.3		(4.7)
Other (c)	(1.2)		(1.0)
Retail sales subtotal:	$	51.7	$	(115.9)
Wholesale Sales	$	(35.8)	$	8.0
DSS Sales	$	2.4	$	0.5
Eliminations (d)	$	18.5	$	(8.2)
Total sales variance:	$	36.8	$	(115.6)

(a)    Effective April 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year period. For Comparable Store Sales details, see below.

(b)    Service revenue includes brand partnerships, shipping and handling, and revenue from other programs.

(c)    Other includes inventory liquidation sales to third parties, marketplace sales and certain accounting adjusting items related to return reserves, and other deferred items.

(d)    Eliminates Wholesale sales and service fees to Retail and Retail commissions earned from Wholesale. See discussion of intercompany activities and eliminations below.

Retail

Retail sales increased by $51.7 million, or 32.6%, to $210.5 million during the 13 weeks ended July 31, 2021 from $158.8 million during the 13 weeks ended August 1, 2020. Retail added 53 new stores and closed 41 stores (not including temporary store closings due to COVID-19) during the 13 weeks ended July 31, 2021, ending the period with a total of 1,429 stores.

	13 weeks ended
	July 31, 2021		August 1, 2020
Number of Stores:	Physical	Virtual	Physical	Virtual
Number of stores at beginning of period	769	648	772	647
Opened	30	23	24	40
Closed	15	26	24	17
Number of stores at end of period	784	645	772	670

Product and other sales for Retail for the 13 weeks ended July 31, 2021 increased by $49.5 million, or 33.5% to $197.5 million from $148.0 million during the 13 weeks ended August 1, 2020. The sales increase is primarily related to the impact from re-opening stores that had temporarily closed due to the COVID-19 pandemic in the prior year.

Product and other sales are impacted by comparable store sales (as noted in the chart below), new store openings and store closings, as well as the impact from the COVID-19 pandemic. Sales were impacted by the temporary store closings due to the COVID-19 pandemic in the prior year, as well as the impact of fewer students returning to campus, as many schools

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implemented a remote learning model and curtailed on-campus classes and activities. While many big-conferences resumed their sport activities, fan attendance at the games was either eliminated or severely restricted, which further impacted the company’s general merchandise business. Additionally, sales were impacted by overall enrollment declines in higher education. First Day (our inclusive access program), digital and eTextbook revenue increased, due to a shift to lower cost options and more affordable solutions, including digital offerings. First Day sales increased approximately 200% compared to the prior year period.

To supplement the Total Sales table presented above in accordance with generally accepted accounting principles (“GAAP”), the Company uses the non-GAAP financial measure of Retail Gross Comparable Store Sales. Retail Gross Comparable Store Sales (non-GAAP) includes sales from physical and virtual stores that have been open for an entire fiscal year period and does not include sales from closed stores for all periods presented. As contemplated by the FLC Partnership's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of logo and emblematic general merchandise sales to FLC and Fanatics. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic sales on a gross basis in the prior year period. For Retail Gross Comparable Store Sales (non-GAAP), sales for logo and emblematic general merchandise fulfilled by FLC, Fanatics and digital agency sales are included on a gross basis. We believe the current Retail Gross Comparable Store Sales (non-GAAP) calculation method reflects the manner in which management views comparable sales, as well as the seasonal nature of our business. Retail Gross Comparable Store Sales (non-GAAP) variances for Retail by category for the 13 week periods are as follows:

Retail Gross Comparable Store Sales (non-GAAP) variances	13 weeks ended
Dollars in millions	July 31, 2021				August 1, 2020
Textbooks (Course Materials)	$	23.1	21.9	%	$	(11.3)	(10.1)	%
General Merchandise	48.6		118.4	%	(87.6)		(68.3)	%
Trade Books	1.9		151.1	%	(7.7)		(85.2)	%
Total Retail Gross Comparable Store Sales (non-GAAP)	$	73.6	49.8	%	$	(106.6)	(42.8)	%

Rental income for Retail for the 13 weeks ended July 31, 2021 increased by $2.2 million, or 20.5% to $13.0 million from $10.8 million during the 13 weeks ended August 1, 2020. Rental income is impacted by comparable store sales, new store openings and store closings. The increase in rental income is primarily due to increased rental activity due to the temporary store closings due COVID-19 pandemic in the prior year discussed above.

Wholesale

Wholesale sales decreased by $35.8 million, or 44.6% to $44.5 million during the 13 weeks ended July 31, 2021 from $80.3 million during the 13 weeks ended August 1, 2020. The decrease is primarily due to decreased gross sales impacted by the COVID-19 pandemic, a decrease in customer demand resulting from a shift in buying patterns from physical textbooks to digital products, and lower demand from other third-party clients, partially offset by a lower returns and allowances. During the prior year period, the Wholesale operations assumed direct-to-student fulfillment of course material orders for the Retail Segment campus bookstores that were not fully operational due to COVID-19 campus store closures, whereas the sales shifted back to the physical bookstores in the current period.

DSS

DSS total sales increased by $2.4 million, or 41.4% to $8.3 million during the 13 weeks ended July 31, 2021 from $5.9 million during the 13 weeks ended August 1, 2020. Sales increased primarily due to an increase in subscription sales.

Cost of Sales and Gross Margin

Our cost of sales decreased as a percentage of sales to 75.1% during the 13 weeks ended July 31, 2021 compared to 84.9% during the 13 weeks ended August 1, 2020. Our gross margin increased by $29.2 million, or 94.5%, to $60.0 million, or 24.9% of sales, during the 13 weeks ended July 31, 2021 from $30.9 million, or 15.1% of sales during the 13 weeks ended August 1, 2020.

During the 13 weeks ended July 31, 2021, we recognized a merchandise inventory loss of $0.4 million in cost of goods sold in the Retail Segment discussed below. Excluding the merchandise inventory loss, cost of goods sold and gross margin was 74.9% and 25.1%, respectively, of sales during the 13 weeks ended July 31, 2021 compared to 84.9% and 15.1%, respectively, of sales during the 13 weeks ended August 1, 2020. For additional information, see Item 1. Financial Statements - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

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Retail

The following table summarizes the Retail cost of sales for the 13 weeks ended July 31, 2021 and August 1, 2020: 

	13 weeks ended
Dollars in thousands	July 31, 2021		% of Related Sales	August 1, 2020		% of Related Sales
Product and other cost of sales	$	155,722	78.9%	$	135,254	91.4%
Rental cost of sales	6,604		50.7%	7,387		68.4%
Total Cost of Sales	$	162,326	77.1%	$	142,641	89.8%

The following table summarizes the Retail gross margin for the 13 weeks ended July 31, 2021 and August 1, 2020:

	13 weeks ended
Dollars in thousands	July 31, 2021		% of Related Sales	August 1, 2020		% of Related Sales
Product and other gross margin	$	41,723	21.1%	$	12,718	8.6%
Rental gross margin	6,420		49.3%	3,417		31.6%
Gross Margin	$	48,143	22.9%	$	16,135	10.2%

For the 13 weeks ended July 31, 2021, the Retail gross margin as a percentage of sales increased as discussed below:

•Product and other gross margin increased (1,250 basis points), driven primarily by higher margin rates (1,215 basis points) due to lower inventory reserves and lower markdowns and a favorable sales mix (160 basis points) due to higher general merchandise sales, partially offset by higher contract costs as a percentage of sales related to our college and university contracts (90 basis points) resulting from contract renewals and new store contracts, and an inventory merchandise loss of $0.4 million (30 basis points) related to the final sale of our logo and emblematic general merchandise inventory below cost to FLC.

•Rental gross margin increased (1,765 basis points), driven primarily by lower contract costs as a percentage of sales related to our college and university contracts (1,215 basis points) and higher rental margin rates (690 basis points), partially offset by an unfavorable rental mix (140 basis points).

Wholesale

The cost of sales and gross margin for Wholesale were $34.1 million, or 76.6% of sales, and $10.4 million, or 23.4% of sales, respectively, during the 13 weeks ended July 31, 2021. The cost of sales and gross margin for Wholesale was $63.5 million or 79.1% of sales and $16.8 million or 20.9% of sales, respectively, during the 13 weeks ended August 1, 2020.

The gross margin rate increased during the 13 weeks ended July 31, 2021 primarily due to lower markdowns and a favorable sales mix, partially offset by the unfavorable impact of returns and allowances.

DSS

The gross margin for the DSS segment was $7.0 million, or 84.7% of sales, during the 13 weeks ended July 31, 2021 and $4.7 million, or 80.8% of sales, during the 13 weeks ended August 1, 2020. The high gross margins are driven primarily by high margin subscription service revenue earned.

Intercompany Eliminations

During the 13 weeks ended July 31, 2021 and August 1, 2020, our sales eliminations were $(22.5) million and $(40.9) million, respectively. These sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

During the 13 weeks ended July 31, 2021 and August 1, 2020, the cost of sales eliminations were $(16.9) million and $(34.2) million, respectively. These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.

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During the 13 weeks ended July 31, 2021 and August 1, 2020, the gross margin eliminations were $(5.5) million and $(6.8) million, respectively. The gross margin eliminations reflect the net impact of the sales eliminations and cost of sales eliminations during the above mentioned reporting periods.

Selling and Administrative Expenses

	13 weeks ended
Dollars in thousands	July 31, 2021		% of Sales	August 1, 2020		% of Sales
Total Selling and Administrative Expenses	$	86,235	35.8%	$	70,043	34.3%

During the 13 weeks ended July 31, 2021, selling and administrative expenses increased by $16.2 million, or 23.1%, to $86.2 million from $70.0 million during the 13 weeks ended August 1, 2020. The variances by segment are as follows:

Retail

During the 13 weeks ended July 31, 2021, Retail selling and administrative expenses increased by $11.4 million, or 20.0%, to $68.4 million from $57.0 million during the 13 weeks ended August 1, 2020. This increase was primarily due to a $12.1 million increase in stores payroll and operating expenses including comparable stores, virtual stores and new/closed stores payroll and operating expenses, partially offset by a $0.8 million decrease in corporate payroll, infrastructure and product development costs. The payroll increase is primarily related to the impact from re-opening stores that had temporarily closed due to the COVID-19 pandemic in the prior year.

Wholesale

Wholesale selling and administrative expenses increased by $0.2 million, or 5.3%, to $4.0 million from $3.8 million during the 13 weeks ended August 1, 2020. The increase in selling and administrative expenses was primarily driven by higher compensation-related expense and higher operating expenses.

DSS

During the 13 weeks ended July 31, 2021, DSS selling and administrative expenses increased by $2.4 million, or 59.7%, to $6.4 million from $4.0 million during the 13 weeks ended August 1, 2020. The increase in costs was primarily driven by higher operating costs invested in the business to continue to increase sales.

Corporate Services

During the 13 weeks ended July 31, 2021, Corporate Services' selling and administrative expenses increased by $2.2 million, or 42.0%, to $7.4 million from $5.2 million during the 13 weeks ended August 1, 2020. The increase was primarily due to higher compensation-related expense and higher operating expenses.

Depreciation and Amortization Expense

	13 weeks ended
Dollars in thousands	July 31, 2021		% of Sales	August 1, 2020		% of Sales
Total Depreciation and Amortization Expense	$	12,624	5.2%	$	14,063	6.9%

Depreciation and amortization expense decreased by $1.4 million, or 10.2%, to $12.6 million during the 13 weeks ended July 31, 2021 from $14.1 million during the 13 weeks ended August 1, 2020. The decrease was primarily attributable to lower depreciable assets and intangibles due to the store impairment loss recognized during the third quarter of Fiscal 2021.

Restructuring and other charges

During the 13 weeks ended July 31, 2021, we recognized restructuring and other charges totaling $2.6 million comprised primarily of $1.5 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($2.4 million is included in accrued liabilities in the consolidated balance sheet as of July 31, 2021), $1.0 million for professional service costs related to restructuring, process improvements, costs related to development and integration associated with the FLC Partnership, and shareholder activist activities, and $0.1 million related to liabilities for a facility closure.

During the 13 ended August 1, 2020, we recognized restructuring and other charges totaling $5.7 million comprised of $3.4 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($10.6 million is included in accrued liabilities in the consolidated balance sheet as of August 1, 2020), and $2.1 million for professional service costs related to restructuring, process improvements, and shareholder activities, and $0.2 million related to liability for a facility closure.

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Operating Loss

	13 weeks ended
Dollars in thousands	July 31, 2021		% of Sales	August 1, 2020		% of Sales
Total Operating Loss	$	(41,453)	(17.2)%	$	(58,915)	(28.9)%

Our operating loss was $(41.5) million during the 13 weeks ended July 31, 2021, compared to an operating loss of $(58.9) million during the 13 weeks ended August 1, 2020. The decrease in operating loss is due to the matters discussed above. For the 13 weeks ended July 31, 2021, excluding the $0.4 million of merchandise inventory loss and the $2.6 million of restructuring and other charges, discussed above, operating loss was $(38.4) million (or (15.9)% of sales). For the 13 weeks ended August 1, 2020, excluding the $5.7 million of restructuring and other charges, discussed above, operating loss was $(53.2) million (or (26.1)% of sales).

Interest Expense, Net

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Interest Expense, Net	$	2,494	$	2,653

Net interest expense decreased by $0.2 million, or 6.0%, to $2.5 million during the 13 weeks ended July 31, 2021 from $2.7 million during the 13 weeks ended August 1, 2020. The decrease was primarily due to lower borrowings compared to the prior year.

Income Tax Expense (Benefit)

	13 weeks ended
Dollars in thousands	July 31, 2021		Effective Rate	August 1, 2020		Effective Rate
Income Tax Expense (Benefit)	$	399	(0.9)%	$	(14,916)	24.2%

We recorded an income tax expense of $0.4 million on a pre-tax loss of $(43.9) million during the 13 weeks ended July 31, 2021, which represented an effective income tax rate of (0.9)% and we recorded an income tax benefit of $(14.9) million on a pre-tax loss of $(61.6) million during the 13 weeks ended August 1, 2020, which represented an effective income tax rate of 24.2%. The effective tax rate for the 13 weeks ended July 31, 2021 is lower as compared to the comparable prior year due to the assessment of the realization of deferred tax assets.

Net Loss

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Net loss	$	(44,346)	$	(46,652)

As a result of the factors discussed above, net loss was $(44.3) million during the 13 weeks ended July 31, 2021, compared with net loss of $(46.7) million during the 13 weeks ended August 1, 2020. Adjusted Earnings (non-GAAP) is $(40.0) million during the 13 weeks ended July 31, 2021, compared with $(41.7) million during the 13 weeks ended August 1, 2020. See Adjusted Earnings (non-GAAP) discussion below.

Use of Non-GAAP Measures - Adjusted Earnings, Adjusted EBITDA and Free Cash Flow

To supplement our results prepared in accordance with generally accepted accounting principles (“GAAP”), we use the measure of Adjusted Earnings, Adjusted EBITDA, and Free Cash Flow, which are non-GAAP financial measures under Securities and Exchange Commission (the “SEC”) regulations. We define Adjusted Earnings as net income adjusted for certain reconciling items that are subtracted from or added to net income. We define Adjusted EBITDA as net income plus (1) depreciation and amortization; (2) interest expense and (3) income taxes, (4) as adjusted for items that are subtracted from or added to net income. We define Free Cash Flow as Adjusted EBITDA less capital expenditures, cash interest and cash taxes.

To properly and prudently evaluate our business, we encourage you to review our condensed consolidated financial statements included elsewhere in this Form 10-K, the reconciliation of Adjusted Earnings to net income and the reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with GAAP, set

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forth in the tables below. All of the items included in the reconciliations below are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance.

These non-GAAP financial measures are not intended as substitutes for and should not be considered superior to measures of financial performance prepared in accordance with GAAP. In addition, our use of these non-GAAP financial measures may be different from similarly named measures used by other companies, limiting their usefulness for comparison purposes.

We review these non-GAAP financial measures as internal measures to evaluate our performance and manage our operations. We believe that these measures are useful performance measures which are used by us to facilitate a comparison of our on-going operating performance on a consistent basis from period-to-period. We believe that these non-GAAP financial measures provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone, as they exclude certain items that do not reflect the ordinary earnings of our operations. Our Board of Directors and management also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance, for evaluating on a quarterly and annual basis actual results against such expectations, and as a measure for performance incentive plans. We believe that the inclusion of Adjusted Earnings and Adjusted EBITDA results provides investors useful and important information regarding our operating results. We believe that Free Cash Flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements and assists investors in their understanding of our operating profitability and liquidity as we manage the business to maximize margin and cash flow.

Adjusted Earnings (non-GAAP)

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Net loss	$	(44,346)	$	(46,652)
Reconciling items, after-tax (below)	4,332		4,936
Adjusted Earnings (non-GAAP)	$	(40,014)	$	(41,716)
Reconciling items, pre-tax
Merchandise inventory loss (a)	$	434	$	—
Content amortization (non-cash)	1,275		1,164
Restructuring and other charges (a)	2,623		5,671
Reconciling items, pre-tax	4,332		6,835
Less: Pro forma income tax impact (a)(b)	—		1,899
Reconciling items, after-tax	$	4,332	$	4,936

(a)     See Management Discussion and Analysis and Results of Operations discussion above.

(b)    Represents the income tax effects of the non-GAAP items.

Adjusted EBITDA (non-GAAP)

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Net loss	$	(44,346)	$	(46,652)
Add:
Depreciation and amortization expense	12,624		14,063
Interest expense, net	2,494		2,653
Income tax expense (benefit)	399		(14,916)
Merchandise inventory loss (a)	434		—
Content amortization (non-cash)	1,275		1,164
Restructuring and other charges (a)	2,623		5,671
Adjusted EBITDA (non-GAAP) (a)	$	(24,497)	$	(38,017)

(a)     See Management Discussion and Analysis and Results of Operations discussion above.

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The following is Adjusted EBITDA by segment for the 13 weeks ended July 31, 2021 and August 1, 2020.

Adjusted EBITDA - by Segment	13 weeks ended July 31, 2021
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Elimination(b)		Total
Sales	$	210,469	$	44,484	$	8,303	$	—	$	(22,462)	$	240,794
Cost of sales (a)	161,726		34,079		164		—		(16,913)		179,056
Gross profit	48,743		10,405		8,139		—		(5,549)		$	61,738
Selling and administrative expenses	68,365		3,991		6,447		7,444		(12)		86,235
Adjusted EBITDA (non-GAAP)	$	(19,622)	$	6,414	$	1,692	$	(7,444)	$	(5,537)	$	(24,497)

Adjusted EBITDA - by Segment	13 weeks ended August 1, 2020
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Elimination(b)		Total
Sales	$	158,776	$	80,294	$	5,872	$	—	$	(40,928)	$	204,014
Cost of sales (a)	142,431		63,537		172		—		(34,152)		171,988
Gross profit	16,345		16,757		5,700		—		(6,776)		32,026
Selling and administrative expenses	56,985		3,791		4,036		5,244		(13)		70,043
Adjusted EBITDA (non-GAAP)	$	(40,640)	$	12,966	$	1,664	$	(5,244)	$	(6,763)	$	(38,017)

(a) For the 13 weeks ended July 31, 2021, gross margin excludes $0.2 million and $1.1 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively. For the 13 weeks ended July 31, 2021, gross margin also excludes a merchandise inventory loss of $0.4 million in the Retail Segment.

For the 13 weeks ended August 1, 2020, gross margin excludes $0.2 million and $1.0 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively.

(b)    See Management Discussion and Analysis and Results of Operations discussion above.

Free Cash Flow (non-GAAP)

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Adjusted EBITDA (non-GAAP)	$	(24,497)	$	(38,017)
Less:
Capital expenditures (a)	11,370		7,055
Cash interest	1,682		1,960
Cash taxes	254		5,937
Free Cash Flow (non-GAAP)	$	(37,803)	$	(52,969)

(a) Purchases of property and equipment are also referred to as capital expenditures. Our investing activities consist principally of capital expenditures for contractual capital investments associated with renewing existing contracts, new store construction, digital initiatives and enhancements to internal systems and our website. The following table provides the components of total purchases of property and equipment:

Capital Expenditures	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Physical store capital expenditures	$	3,893	$	3,137
Product and system development	3,624		2,325
Content development costs	2,847		1,076
Other	1,006		517
Total Capital Expenditures	$	11,370	$	7,055

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Liquidity and Capital Resources

Our primary sources of cash are net cash flows from operating activities, funds available under our credit agreement and short-term vendor financing. As of July 31, 2021, we had $203.7 million outstanding borrowings under the Credit Agreement. See Financing Arrangements discussion below.

COVID-19 Business Impact

Our business experienced an unprecedented and significant negative impact as a result of COVID-19 related campus store closures. Beginning in March 2020, colleges and universities nationwide began to close their campuses in light of safety concerns and as a result of local and state issued stay-at-home orders. By mid-March, during our Fiscal 2020 fourth quarter, we closed the majority of our physical campus stores to protect the health and safety of our customers and employees.

While our campus stores were closed, we continued to serve institutions and students through our campus websites, providing free shipping on all orders and an expanded digital content offering to provide immediate access to course materials to students at our campuses that closed due to COVID-19. We developed and implemented plans to safely reopen our campus stores based on national, state and local guidelines, as well as the campus policies set by the school administration.

Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools currently expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities and events, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic. We will continue to assess our operations and will continue to consider the guidance of local governments and our campus partners to determine when our operations can begin returning to normal levels of business. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors currently in place change, there could be a further impact on our results of operations, financial condition and cash flows from operations. For additional information, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

We believe that our future cash from operations, access to borrowings under the Credit Facility, FILO Facility and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the foreseeable future. Our future capital requirements will depend on many factors, including, but not limited to, the economy and the outlook for and pace of sustainable growth in our markets, the levels at which we maintain inventory, the number and timing of new store openings, and any potential acquisitions of other brands or companies including digital properties. To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity. Our access to, and the availability of, financing in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that we will have access to capital markets on acceptable terms.

Sources and Uses of Cash Flow

	13 weeks ended
Dollars in thousands	July 31, 2021		August 1, 2020
Cash, cash equivalents, and restricted cash at beginning of period	$	16,814	$	9,008
Net cash flows used in operating activities	(17,462)		(53,149)
Net cash flows used in investing activities	(11,020)		(7,140)
Net cash flows provided by financing activities	24,885		59,518
Cash, cash equivalents, and restricted cash at end of period	$	13,217	$	8,237

Cash Flow from Operating Activities

Our business is highly seasonal. For our retail operations, cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester. For our wholesale operations, cash flows from operating activities are typically a source of cash in the second and fourth fiscal quarters, as payments are received from the summer and winter selling season when they sell textbooks and other course materials for retail distribution. For both retail and wholesale, cash flows from operating activities are typically a use of cash in the fourth fiscal quarter, when sales volumes are materially lower than the other quarters. For our DSS segment, cash flows are not seasonal as cash flows from operating activities are typically consistent throughout the year. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various school’s semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

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Cash flows used in operating activities during the 13 weeks ended July 31, 2021 were $(17.9) million compared to $(53.1) million during the 13 weeks ended August 1, 2020. This decrease in cash used in operating activities of $35.2 million was primarily due to higher earnings in the current year period compared to the prior year period, and changes in working capital. As discussed above, our operations were highly impacted by COVID-19 related campus store closures in the prior year period.

Cash Flow from Investing Activities

Cash flows used in investing activities during the 13 weeks ended July 31, 2021 were $(11.0) million compared to $(7.1) million during the 13 weeks ended August 1, 2020. The increase in cash used in investing activities is primarily due to higher capital expenditures and contractual capital investments associated with content development, digital initiatives, enhancements to internal systems and websites, renewing existing contracts and new store construction. Capital expenditures totaled $11.4 million and $7.1 million during the 13 weeks ended July 31, 2021 and August 1, 2020, respectively.

Cash Flow from Financing Activities

Cash flows provided by financing activities during the 13 weeks ended July 31, 2021 were $24.9 million compared to $59.5 million during the 13 weeks ended August 1, 2020. This net change of $34.6 million is primarily due to lower net borrowings under the credit agreement.

Financing Arrangements

We have a credit agreement (the “Credit Agreement”), amended March 31, 2021 and March 1, 2019, under which the lenders committed to provide us with a 5-year asset-backed revolving credit facility in an aggregate committed principal amount of $400 million (the “Credit Facility”). We have the option to request an increase in commitments under the Credit Facility of up to $100 million, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement includes an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100 million incremental facility maintaining the maximum availability under the Credit Agreement at $500 million. On March 31, 2021, we were granted a waiver to the availability test condition to the current draw under the FILO Facility.

During the 13 weeks ended July 31, 2021, we borrowed $71.7 million and repaid $45.6 million under the Credit Agreement, with $203.7 million of outstanding borrowings as of July 31, 2021, comprised of $153.7 million and $50.0 million under the Credit Facility and FILO Facility, respectively. During the 13 weeks ended August 1, 2020, we borrowed $186.7 million and repaid $126.8 million under the Credit Agreement, with $234.6 million of outstanding borrowings as of August 1, 2020, comprised entirely of outstanding borrowings under the Credit Facility. As of both July 31, 2021 and August 1, 2020, we have issued $4.8 million in letters of credit under the Credit Facility.

For additional information including interest terms and covenant requirements related to the Credit Facility and FILO Facility, refer to Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Income Tax Implications on Liquidity

As of July 31, 2021, other long-term liabilities includes $25.3 million related to the long-term tax payable associated with the LIFO reserve. The LIFO reserve is impacted by changes in the consumer price index ("CPI") and is dependent on the inventory levels at the end of our tax year (on or about January 31st) which is in the middle of our second largest selling cycle. At the end of the most recent tax year, inventory levels declined as compared to the prior year resulting in approximately $0.7 million of the income taxes associated with the LIFO reserve becoming currently payable. Given recent trends relating to the pricing and rental of textbooks, management believes that an additional portion of the remaining long-term tax payable associated with the LIFO reserve could become payable within the next twelve months. We are unable to predict future trends for CPI and inventory levels, therefore it is difficult to project with reasonable certainty how much of this liability will become payable within the next twelve months.

We have filed our federal income tax returns for the tax year ended January 2021, as well claims for refunds for cash taxes paid in prior years. We expect to receive an aggregate refund of approximately $30.5 million.

Share Repurchases

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50 million, in the aggregate, of our outstanding Common Stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the 13 weeks ended July 31, 2021, we did not repurchase any of our Common Stock under the stock repurchase program. As of July 31, 2021, approximately $26.7 million remains available under the stock repurchase program.

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During the 13 weeks ended July 31, 2021, we repurchased 130,135 shares of our Common Stock outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Contractual Obligations

Our projected contractual obligations are consistent with amounts disclosed in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Off-Balance Sheet Arrangements

As of July 31, 2021, we have no off-balance sheet arrangements as defined in Item 303 of Regulation S-K.

Critical Accounting Policies

Our policies regarding the use of estimates and other critical accounting policies are consistent with the disclosures in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Disclosure Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us and our business that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and similar expressions, as they relate to us or our management, identify forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including, among others:

•risks associated with COVID-19 and the governmental responses to it, including its impacts across our businesses on demand and operations, as well as on the operations of our suppliers and other business partners, and the effectiveness of our actions taken in response to these risks;

•general competitive conditions, including actions our competitors and content providers may take to grow their businesses;

•a decline in college enrollment or decreased funding available for students;

•decisions by colleges and universities to outsource their physical and/or online bookstore operations or change the operation of their bookstores;

•implementation of our digital strategy may not result in the expected growth in our digital sales and/or profitability;

•risk that digital sales growth does not exceed the rate of investment spend;

•the performance of our online, digital and other initiatives, integration of and deployment of, additional products and services including new digital channels, and enhancements to higher education digital products, and the inability to achieve the expected cost savings;

•the risk of price reduction or change in format of course materials by publishers, which could negatively impact revenues and margin;

•the general economic environment and consumer spending patterns;

•decreased consumer demand for our products, low growth or declining sales;

•the strategic objectives, successful integration, anticipated synergies, and/or other expected potential benefits of various acquisitions, may not be fully realized or may take longer than expected;

•the integration of the operations of various acquisitions into our own may also increase the risk of our internal controls being found ineffective;

•changes to purchase or rental terms, payment terms, return policies, the discount or margin on products or other terms with our suppliers;

•our ability to successfully implement our strategic initiatives including our ability to identify, compete for and execute upon additional acquisitions and strategic investments;

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•risks associated with operation or performance of MBS Textbook Exchange, LLC’s point-of-sales systems that are sold to college bookstore customers;

•technological changes;

•risks associated with counterfeit and piracy of digital and print materials;

•our international operations could result in additional risks;

•our ability to attract and retain employees;

•risks associated with data privacy, information security and intellectual property;

•trends and challenges to our business and in the locations in which we have stores;

•non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings;

•disruptions to our information technology systems, infrastructure and data due to computer malware, viruses, hacking and phishing attacks, resulting in harm to our business and results of operations;

•disruption of or interference with third party web service providers and our own proprietary technology;

•work stoppages or increases in labor costs;

•possible increases in shipping rates or interruptions in shipping service;

•product shortages, including decreases in the used textbook inventory supply associated with the implementation of publishers’ digital offerings and direct to student textbook consignment rental programs, as well as the risks associated with the impacts that public health crises may have on the ability of our suppliers to manufacture or source products, particularly from outside of the United States;

•changes in domestic and international laws or regulations, including U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance;

•enactment of laws or changes in enforcement practices which may restrict or prohibit our use of texts, emails, interest based online advertising, recurring billing or similar marketing and sales activities;

•the amount of our indebtedness and ability to comply with covenants applicable to any future debt financing;

•our ability to satisfy future capital and liquidity requirements;

•our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;

•adverse results from litigation, governmental investigations, tax-related proceedings, or audits;

•changes in accounting standards; and

•the other risks and uncertainties detailed in the section titled “Risk Factors” in Part I - Item 1A in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Form 10-Q. 

Item 3:    Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the items discussed in Part II - Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Item 4:    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Exchange Act) was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

36

Management has not identified any changes in the Company’s internal control over financial reporting that occurred during the first quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. We record a liability when we believe that it is both probable that a loss has been incurred and the amount of loss can be reasonably estimated. Based on our current knowledge, we do not believe that there is a reasonable possibility that the final outcome of any pending or threatened legal proceedings to which we or any of our subsidiaries are a party, either individually or in the aggregate, will have a material adverse effect on our future financial results. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. As such, there can be no assurance that the final outcome of these matters will not materially and adversely affect our business, financial condition, results of operations or cash flows.

Between January 22, 2020 and June 15, 2020, thirteen purported class action complaints were filed against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association, by retailers of collegiate course materials or current or former college students. Although the specific allegations vary, the plaintiffs generally claim, on their own behalf and on behalf of the purported classes, that the Company and the other defendants violated Section 1 of the Sherman Act (15 U.S.C. § 1), Section 2 of the Sherman Act (15 U.S.C. § 2), Section 13(a) of the Robinson-Patman Act (15 U.S.C. §13(a)), and various state antitrust and unfair trade practices laws for alleged activities in connection with inclusive access and the sale of course materials to universities and their students. The United States Judicial Panel on Multidistrict Litigation consolidated these and other related cases in a consolidated proceeding before the Hon. Denise L. Cote of the United States District Court for the Southern District of New York. On June 14, 2021, the Court granted defendants' motion to dismiss both cases dismissed with prejudice. Neither Plaintiff group sought to appeal those decisions. The orders dismissing the cases are now final and the matter has concluded.

Item 1A. Risk Factors

There have been no material changes during the 13 weeks ended July 31, 2021 to the risk factors discussed in Part I - Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information as of July 31, 2021 with respect to shares of Common Stock we purchased during the first quarter of Fiscal 2021:

Period	Total Number of Shares Purchased	Average Price Paid per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
May 2, 2021 - May 29, 2021	—	$	—	—	$	26,669,324
May 30, 2021 - July 3, 2021	—	$	—	—	$	26,669,324
July 4, 2021 - July 31, 2021	—	$	—	—	$	26,669,324
	—	$	—	—

(a)     This amount represents the average price paid per common share. This price includes a per share commission paid for all repurchases.

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50 million, in the aggregate, of our outstanding Common Stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the 13 weeks ended July 31, 2021, we did not repurchase any shares of our Common Stock under the program.

During the 13 weeks ended July 31, 2021, we repurchased 130,135 shares of our Common Stock outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

37

Item 5. Other Information

None

Item 6.    Exhibits

10.1	Amended and Restated Employment Letter, dated June 19, 2019, between MBS Textbook Exchange, LLC and Dave Henderson.
10.2	Amended and Restated Employment Letter, dated June 19, 2019, between B&N Education, LLC, a subsidiary of Barnes & Noble Education, Inc. and Jonathan Shar.
10.3	Letter Agreement, dated July 22, 2021, by and among Barnes & Noble Education, Inc. and Outerbridge Capital Management, LLC and certain of its affiliates signatory thereto, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on July 23, 2021, and incorporated herein by reference.
31.1	Certification by the Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BARNES & NOBLE EDUCATION, INC.
(Registrant)
By:	/S/ THOMAS D. DONOHUE
	Thomas D. Donohue
	Chief Financial Officer
	(principal financial officer)
By:	/S/ SEEMA C. PAUL
	Seema C. Paul
	Chief Accounting Officer
	(principal accounting officer)

September 2, 2021

39

EX-10.1

Exhibit 10.1

June 19, 2019

Dave Henderson
[ ]

[ ]

Dear Dave:

This letter agreement (the “Agreement”) is intended to update our mutual understanding regarding your employment as President of MBS Textbook Exchange, LLC (the “Company”).

We are pleased to agree as follows:

1.Duties. You agree to be President for the Term of this Agreement (as described below). In this capacity, you shall perform such duties and have such responsibilities as are typically associated with such position. During your employment, you agree to devote your full business time and attention to the performance of your duties and responsibilities hereunder. You shall report to the Chairman and Chief Executive Officer of Barnes & Noble Education, Inc., Mike Huseby.

2.Term. The term of this Agreement shall be for a period beginning on the date hereof (the “Effective Date”) and ending on the second anniversary of the Effective Date or, if earlier, the termination of your employment in accordance with the provisions set forth below (the “Term”). In the event your employment with the Company continues after the expiration of the Term, such post-expiration employment shall be “at-will” and either party may terminate such employment with or without notice and for any reason or no reason.

(b)Your employment hereunder shall terminate upon your death and may be terminated by the Company upon written notice to you following your Disability (as defined below). In addition, the Company may immediately terminate your employment hereunder immediately for Cause (as defined below) or following two weeks’ written notice to you for any other reason. You may terminate your employment hereunder following written notice to the Company of your intention to resign with or without Good Reason (as defined below), provided, however, that a resignation shall not be deemed to be for Good Reason unless it complies with the requirements of Section 2(c)(iv).

(c)For purposes of this Agreement:

(i)“Cause” means (A) your engaging in intentional misconduct or gross negligence that, in either case, is injurious to Company; (B) your indictment, entry of a plea of nolo contendere, or conviction by a court of competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence, intentional acts or intentional omissions by you in the performance of your duties ,(D) fraud, dishonesty, embezzlement, or misappropriation in connection with the performance of your employment duties and responsibilities; (E) your engaging in any act of intentional misconduct or moral turpitude reasonably likely to adversely affect the Company or its business; (F) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (G) your willful failure or refusal to properly perform the duties, responsibilities, or obligations of your

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employment for reasons other than Disability or authorized leave, or to properly perform or follow any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (H) your material breach of this Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants); provided that, with respect to clauses (C), (G) and (H), you have failed to cure such circumstances within 10 days following written notice from the Company.

(ii)“Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties as President of the Company under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

(iii)“Good Reason” shall mean the occurrence of one or more of the following events without your written consent: (A) a reduction in your Annual Base Salary (as defined below) in effect as of the Effective Date pursuant to Section 3(a) or a reduction in your target annual bonus, (B) a reduction in your title, (C) the Company fails to make material payments to you as required by this Agreement, (D) a required relocation of your principal place of employment by more than 50 miles or (E) during the two-year period following a Change of Control, a material reduction in the value of the employee benefits provided to you.

(iv)You shall be deemed to terminate employment for Good Reason only if (A) you provide the Company with written notice of Good Reason within a period not to exceed 90 days after the initial existence of the condition alleged to give rise to Good Reason, (B) the Company fails to remedy the condition within 30 days of such notice, and (C) your termination is within six months following the initial existence of the condition alleged to give rise to Good Reason.

3.Compensation.

(a)Annual Base Salary. During the Term, the Company shall pay you, for all services you perform hereunder, an annual base salary of U.S. $500,000.00.

(b)Bonus Compensation. During the Term, the Company may pay you discretionary annual bonus compensation, as determined by the Compensation Committee, with an annual target amount of not less than 60% of your Annual Base Salary for fiscal year 2019 and 85% of your Annual Base Salary for fiscal year 2020 and thereafter, which, if awarded, shall be paid by the Company in accordance with and subject to the terms and conditions of the incentive or compensation plan or arrangement specified by the Compensation Committee.

(c)Employee Benefits. During the Term, you shall be eligible to participate in and receive any benefits to which you are currently entitled, or under the employee benefit plans that the Company provides for its employees generally, all of which are subject to change.

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(d)Expenses. During the Term, the Company shall reimburse you for all reasonable expenses incurred by you in the performance of your duties and responsibilities under this Agreement, including entertainment and travel expenses, in accordance with the current policies and procedures.

(e)Equity Awards. Subject to approval by the Compensation Committee, you will be eligible for equity grants according to the Barnes & Noble Education, Inc. annual long-term incentive program. Additional details will be shared after approval.

(f)Severance. In the event that, during the Term and at least six months after the Effective Date, (a) your employment is terminated by the Company without Cause or (b) you voluntarily terminate your employment for Good Reason, the Company shall (i) pay you an amount equal to one times the sum of your then Annual Base Salary and target annual bonus, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”), and (ii) provide you continued health care coverage at the Company’s cost pursuant to the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) if you elect COBRA coverage until the earlier of when you are no longer eligible for COBRA coverage or twelve (12) months following your date of termination (the “COBRA Benefits”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this Agreement and do not materially breach such provisions at any time during the Relevant Period (as defined below). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired and the COBRA Benefits will be provided on a monthly basis. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid and the COBRA Benefits shall not be made available to you.

(g)Change of Control Payments. If at any time during the Term (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within 90 days preceding or two years following the Change of Control or the remainder of the Term, as applicable, then the Company shall (A) pay you an amount equal to two times the sum of (I) your then Annual Base Salary and (II) your target annual bonus for the year of termination (or, if higher, as in effect immediately prior to the Change of Control) (“Change of Control Amount”), and (B) provide you the COBRA Benefits, less all applicable withholding and other applicable taxes and deductions. (A) The Change of Control Amount and the COBRA Benefits are subject to you executing and delivering to the Company (and not revoking) the Release within 60 days following your termination date, (B) the Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates (or, if later, when the Release becomes irrevocable) and (C) the COBRA Benefits will be provided on a monthly basis. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this paragraph would be payable to you under this Agreement or any other plan, policy, or

Page 3

arrangement of the Company or Barnes & Noble Education, Inc. or any affiliate, exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation; in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. For the avoidance of doubt, the amounts payable to you under this paragraph shall be in lieu of any amounts payable to you under the previous paragraph (Severance).

(h)As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

(i)during any period of 24 consecutive months, individuals who were Directors of the Company on the first day of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board; provided, however, that any individual becoming a Director of the Company subsequent to the first day of such period whose election, or nomination for election, by the Company’s stockholders was approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director;

(ii)the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause (A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of the Company to an entity that is not an affiliate (a “Sale”), in each case, if such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Company in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (or a successor rule thereto)) (the “Exchange Act”) of the securities eligible to vote for the election of the Board (“Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation resulting from such Reorganization or Sale (including a corporation that, as a result of such transaction, owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Corporation”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of the Continuing Corporation that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any company or other entity involved in or forming part of such Reorganization or Sale other than the Company), (2) no “person” (as such term is used in Section 13(d) of the Exchange Act) (each, a “Person”) (excluding (x) any employee benefit plan (or related trust)

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sponsored or maintained by the Continuing Corporation or any corporation controlled by the Continuing Corporation or (y) Leonard Riggio, his spouse, his lineal descendants, trusts for the exclusive benefit of any such individuals, the executor or administrator of the estate or the legal representative of any of such individuals and any entity controlled by any of the foregoing Persons (the “Riggio Shareholders”) beneficially owns, directly or indirectly, 40% or more of the combined voting power of the then outstanding voting securities of the Continuing Corporation and (3) at least a majority of the members of the board of directors of the Continuing Corporation were Incumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale; or

(iii)any person, corporation or other entity or “group” (as used in Section 14(d)(2) of the Exchange Act) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate, (C) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the voting power of the Company Voting Securities or (D) the Riggio Shareholders) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company Voting Securities; provided, however, that for purposes of this subparagraph (iii), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an affiliate, (y) any acquisition by an underwriter temporarily holding such Company Voting Securities pursuant to an offering of such securities or any acquisition by a pledgee of Company Voting Securities holding such securities as collateral or temporarily holding such securities upon foreclosure of the underlying obligation or (z) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change of Control for purposes of subparagraph (ii) above.

4.Non-Competition and Confidential Information.

(a)Non-Competition; Non-Solicitation. You agree that during the Term and for a period of three years after the termination for any reason of your employment (the “Relevant Period”), you shall not, directly or indirectly, (i) employ or retain, or induce or cause any other person or entity to employ or retain, any person who is, or who at any time in the twelve-month period prior to such time had been, employed or retained by the Company or any of its subsidiaries or affiliates; or (ii) provide services, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, to any Competing Business (as defined below). For purposes of this Agreement, the term “Competing Business” shall mean (i) Amazon.com and (ii) any other person, corporation or other entity engaged in the Business Area. For purposes of this Agreement, the term “Business Area” shall mean the sale, distribution, rental, or attempted sale, distribution, or rental of books, textbooks, periodicals, newspapers, digital or audio versions of any of the foregoing or e-reading devices and related software, or in the sale, development, distribution, or rental of eBooks, eBook readers, digital learning or content, and/or related merchandise and other materials and products typically sold rented, or distributed at a college or university bookstore or in relation to any type of educational or training, program. Notwithstanding the foregoing, the employee non-solicitation restrictions of this Section 4(a) shall not apply to the placement of general advertisements or the use of general search firm services with respect to a particular geographic area, but which are not targeted, directly or indirectly, towards employees of the Company or any of its subsidiaries.

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During your employment with the Company, you will have access to Trade Secrets, Confidential Information and/or other non-public Company Property (as each term is defined below), and you will develop certain relationships with and/or knowledge about current and/or prospective employees, customers, vendors, or contractors such that if you were allowed to pursue relationships with the Company’s current or prospective employees, customers, vendors, or contractors, you would have an unfair advantage based upon confidential information and/or relationships developed. Therefore, you agree that from the Effective Date until the expiration of a period of three years following the termination of your employment with the Company for any reason (the “Covered Period”), you will not, directly or indirectly: (a) solicit or recruit for employment, offer employment to, Dire, solicit, or recruit for placement, place and/or offer to place with another company or entity -- on a temporary, permanent or contract basis, or otherwise -- anyone who at any time during the Covered Period is or was employed by the Company or any of its parents, subsidiaries or affiliates (a “Covered Employee”); provided that, at the time of such solicitation, recruitment, offer of employment, hiring, offer to place or placement, or any time during the ninety (90) day period immediately preceding same, the Covered Employee is or was an employee of the Company or any of its parents, subsidiaries, or affiliates; (b) encourage, entice or persuade, or attempt to encourage, entice or persuade any Covered Employee to leave the Company or any of its parents, subsidiaries, or affiliates; (c) solicit or encourage (i) any customer, vendor, or contractor of Company, (ii) any entity that had been a customer, vendor, or contractor with Company within one year preceding your termination (for any reason) of employment with the Company, (iii) any prospective customer, vendor, or contractor of the Company actively solicited within one year before the termination (for any reason) of your employment with the Company, or (iv) any parent, subsidiary or affiliate of any of the foregoing, to void, terminate or diminish its relationship with the Company or any of its parents, subsidiaries, or affiliates; or (d) seek to persuade (i) any customer, vendor, or contractor of the Company, (H) any entity that had been a customer, vendor, or contractor with Company within one year preceding your termination (for any reason) of employment with the Company, (Hi) any prospective customer, vendor, or contractor of the Company actively solicited within one year before the termination (for any reason) of your employment with the Company, or (iv) any parent, subsidiary, affiliate of any of the foregoing, to conduct with anyone else any business or activity that such customer, vendor, or contractor conducts with the Company or any of its parents, subsidiaries, or affiliates.

You acknowledge and represent that as an employee of the Company, you will not breach any invention, assignment or proprietary information or similar agreement you may have with any former employer or other party. You further acknowledge and represent you will not bring to the Company or use in the performance of your duties for the Company any documents or materials of any kind from a former employer or other person or entity that you are not legally authorized or permitted to use and/or that are not generally available to the public. You also agree that the Company has not asked you to use or disclose any Trade Secrets and/or Confidential Information that is confidential to any of your prior employers. You also agree you are not bound by any agreement (including, without limitation, any non-compete or non-solicitation agreement) that seeks to restrict the employers or entities for or with whom you may work, the customers, clients or prospects you may solicit or work with, or the former co-workers you may solicit or work with, or that you have provided written copies of any such agreement(s) to the Company’s management and has otherwise fully disclosed the existence and terms of any such agreement(s) to the Company’s management.

(b)Ownership of Other Securities. Nothing in Section 4(a) shall be construed as denying you the right to own securities of any corporation listed on a national securities exchange or quoted in the NASDAQ System in an amount up to 5% of the outstanding number of such securities.

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(c)Confidential Information. You acknowledge your duties and responsibilities will put you in a position of acquiring and creating Trade Secrets and Confidential Information (as those terms are defined below) concerning the Company. You further acknowledge the Company is engaged in a highly competitive business. The Company’s involvement in this business has required and continues to require the expenditure of substantial amounts of money and the use of skills developed over a long period of time. As a result of these investments of money, skill, and time, the Company has developed and will continue to develop certain valuable Trade Secrets and Confidential Information that are particular to the Company’s business. You acknowledge and agree the disclosure of such information to competitors of the Company or others would cause the Company to suffer substantial and irreparable harm. You acknowledge, therefore, that it is in the Company’s legitimate business interest to restrict your disclosure or use of such Trade Secret and Confidential Information (and other Company Property).

(i)Accordingly, you shall use best efforts and diligence both during and after any employment with the Company, regardless of how, when, or why such employment ends, to protect the confidential, trade secret, and/or proprietary character of all Confidential Information and Trade Secret Information (as defined below). You shall not, directly or indirectly, use (for your benefit or for the benefit of any other person) or disclose any Confidential Information or Trade Secret Information, for so long as it shall remain proprietary or protectable, except as may be necessary for the performance of your duties for the Company. You understand that Confidential Information and/or Trade Secret Information may or may not be labeled as such, and you shall treat all information that appears to be Confidential Information and/or Trade Secret Information as confidential unless otherwise informed or authorized by the Company. Nothing in this Agreement shall be construed to mean that Company owns any intellectual property or ideas that were conceived by you before you commenced employment with Company and which you have previously disclosed to the Company. Subject to Section 4(c)(ii), nothing in this Section 4(c)(i) shall prevent you from complying with a valid legal requirement (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or Trade Secret Information.

“Confidential Information” means any data or information and documentation, regardless of the form or medium in which it is or was created, stored, reflected, or preserved, that is either developed by you (alone or with others) or to which you shall have access during any employment with the Company, and which has value and is not generally known to the public. “Confidential Information” also includes, but is not limited to, Trade Secret Information, information that is learned or acquired by the Company from others with whom the Company has a business relationship in which, and as a result of which, such information is revealed to the Company, and any other proprietary, confidential, sensitive, or material and non-public, including but not limited to information related to possible or pending mergers and acquisitions, and information regarding the Company or its affiliates’ business affairs, including, without limitation, customer or supplier information, financial information or data, sales, costs, business concepts or plans, processes, methods, systems, know-how, patentable rights, devices, formulas, product specifications, marketing, prices, technology, distribution strategies, proprietary information regarding current or future products or strategy, services, methodologies, processes, research and development and other proprietary rights, and any other information that has value and is not generally known to the public, whether in oral, written, or electronic form and whether or not marked as “confidential.”

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“Trade Secret Information” shall mean all information, regardless of the form or medium in which it is or was created, stored, reflected, or preserved, that is not commonly known by or generally available to the public and that (1) derives or creates economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The Company’s Trade Secret Information may include, but is not limited to, all confidential information relating to or reflecting the Company’s research and development plans and activities; compilations of data; product plans; sales, marketing and business plans and strategies; pricing, price lists, pricing methodologies and profit margins; current and planned incentive, recognition, and rewards programs and services; personnel; inventions, concepts, ideas, designs and formulae; current, past, and prospective customer lists; current, past, and anticipated customer needs, preferences, and requirements; market studies; computer software and programs (including object code and source code); and computer and database technologies, systems, structures, and architectures.

“Company Property” shall mean all property and resources of the Company, including, without limitation, all Trade Secret and Confidential Information, the Company computer system and all software, e-mail and databases, telephone and facsimile services and all other administrative or support services provided by the Company.

Except as specifically required in the performance of your duties for the Company, you agree you will not, during the course of employment by the Company and for so long thereafter as the pertinent information or documentation remain Trade Secrets, Confidential Information or Company Property, directly or indirectly use, disclose or disseminate to any other person, organization or entity or otherwise use or disclose any Trade Secrets, Confidential Information or Company Property. You will hold the Confidential Information and Trade Secrets in strict confidence and shall exercise a reasonable degree of care to prevent disclosure to any third parties. You also shall not reproduce the Confidential Information or Trade Secrets or use them commercially or for any purpose other than the performance of your authorized duties for Company.

The obligations set forth herein shall not apply to any Trade Secrets, Confidential Information or Company Property that have become generally known to a Competing Business through lawful means and without violation of any law or any agreement not to disclose Trade Secrets, Confidential Information, or Company Property. You agree and acknowledge a business shall be deemed to be in competition with the Company if it is engaged in the in the sale, development, distribution, or rental of books, eBooks, eBook readers, digital learning or content, and/or related merchandise and other materials and products typically sold rented, or distributed at a college or university bookstore or in relation to any type of educational or training program.

Notwithstanding anything in this Agreement to the contrary, you and Company acknowledge you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that is made to in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law. In addition, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that is made in a complaint or other document filed in a lawsuit or other

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proceeding so long as such filing is made under seal. Furthermore, in the event you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Trade Secret to your attorney and use the Trade Secret information in the court proceeding so long as you file any document containing the Trade Secret under seal and do not disclose the Trade Secret except pursuant to court order.

(ii)You agree that both during and after any employment with the Company, regardless of how, when, or why such employment ends, if you are legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or Trade Secret Information, you shall promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure or, in the discretion of the Company, to waive compliance with the provisions of this Section 4(c). Thereafter, you shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, you are compelled to disclose the Confidential Information or Trade Secret Information or else stand liable for contempt or suffer other sanction, censure, or penalty, you shall disclose only so much of the Confidential Information or Trade Secret Information to the party compelling disclosure as you believe in good faith on the basis of advice of counsel is required by law, and you shall give the Company prior notice of the Confidential Information or Trade Secret Information you believe you are required to disclose. The Company shall reimburse any reasonable legal fees and related expenses you incur in order to comply with this Section 4(c)(ii). Nothing in or about this Agreement shall be construed to (a) interfere with your rights to file a claim with a government agency responsible for enforcing a law, such as the Securities and Exchange Commission or the U.S. Equal Employment Opportunity Commission; (b) prevent you from providing, in accordance with this paragraph, Confidential Information or Trade Secrets to the extent required by law or legal process; or (c) prevent or impede your ability to participate in or cooperate or assist with any government or regulatory entity investigation or proceeding.

(d)Intellectual Property; Assignment of Inventions. “Intellectual Property” means Inventions (as described below), discoveries, improvements, documented ideas, computer programs and related documentation, moral rights, designs, and other works of authorship (“Intellectual Property”). As described more fully below, you agree to promptly disclose to the Company all Intellectual Property (including any Intellectual Property in the formative stages) made during your employment with the Company. Furthermore, you agree to disclose to the Company any Intellectual Property created during the period of one year after the termination (for any reason) of your employment with the Company that relates to or constitutes an improvement upon the Company’s Intellectual Property. You also agree to keep and maintain written records concerning such Intellectual Property and make these records available to the Company at all times.

You shall promptly disclose and provide to the Company, and hereby assign and agree to assign to the Company and its successors and assigns, your entire right, title, and interest in and to any original works of authorship, designs, formulas, processes, improvements, compositions of matter, computer software programs, data, information or databases, methods, procedures or other inventions, developments or improvements of any kind that you conceive, originate, develop, improve, modify and/

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or create, solely or jointly with others, during the period of your employment, or as a result of such employment (collectively, “Inventions”), and whether or not any such Inventions also may be included within “Confidential Information” or “Trade Secret Information” (as defined under this Agreement), or are patentable, copyrightable, or protectable as trade secrets. You acknowledge and agree the Company is and shall be the exclusive owner of all rights, title, and interest in and to the Inventions and, specifically, that any copyrightable works prepared by you within the scope of your employment are “works for hire” under the Copyright Act, that such “works for hire” are Intellectual Property, and that the Company shall be considered the author and owner of such copyrightable works. In the event that any Intellectual Property is deemed not to be a “work for hire”, or in the event that you should, by operation of law, be deemed to be entitled to retain any rights, title, or interest in and to any Intellectual Property, you hereby irrevocably waive all rights, title, and interest and assign to the Company, without any further consideration and regardless of any use by the Company of any such Intellectual Property, all rights, title, and interest, if any, in and to such Intellectual Property, whether or not patentable, copyrightable, or subject to other forms of protection, made, created, developed, written, or conceived by you, either solely or jointly with others, during your employment with the Company. You agree that the Company, as the owner of all Intellectual Property, has the full and complete right to prepare and create derivative works based upon the Intellectual Property and to use, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, publicly perform, and publicly display and otherwise exploit by all means now known or later developed, such Intellectual Property and derivative works anywhere throughout the world and at any time during or after your employment hereunder or otherwise.

Additionally, all Intellectual Property disclosed or made by you within one (1) year after termination of your employment with the Company shall be deemed to be owned by the Company unless such Intellectual Property is proved to have been conceived after termination and without the benefit of any proprietary and/or Confidential Information or Trade Secrets of the Company, its subsidiaries or affiliates. Notwithstanding the above, you shall retain full right and title to Intellectual Property to which all of the following conditions apply: (a) no equipment, supplies, facilities, proprietary and/or Confidential Information, Trade Secrets or Intellectual Property of the Company was used in its development; (b) it was developed entirely on your own time; (c) it does not relate to the business of the Company or to the Company’s anticipated business or developmental programs; and (d) it does not result from any work performed by you for the Company.

You represent you have not, alone or jointly with others, conceived, developed, or reduced to practice prior to the commencement of your employment with the Company any Intellectual Property that you consider to be your property or the property of third parties. You further agree to execute any instrument or papers requested by the company and to assist the Company, or its designees, at the Company’s expense, but without additional compensation to you, in every proper way to secure the Company’s rights in the Intellectual Property and any copyrights, patents, trademarks, design rights, moral rights, mask work rights, or other intellectual property rights relating thereto in any and all countries. You further agree your obligation to execute or cause to be executed any such instrument or papers will continue after the termination of your employment with the Company. If the Company is unable because of your mental or physical incapacity, your refusal to comply with your obligations under this Agreement, or for any other reason, to secure your signature to apply for or to pursue any application for any United States or foreign patents or copyright or trademark registrations covering Intellectual Property or original works of authorship assigned to the Company under this Agreement or otherwise, you do hereby irrevocably designate and appoint the Company, through its duly authorized officers and agents, as your agent and attorney in fact, to act for and on your behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright or trademark registrations thereon with the

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same legal force and effect as if executed by you. You understand the Company may have entered into agreements with other parties which imposed obligations on the Company regarding Inventions made during the course of the work under such agreements or regarding the confidential nature of such works, or otherwise received from third parties’ confidential or proprietary information (“Third Party Information”). You agree to be bound by all such obligations of the Company arising in connection with such Third Party Information.

(e)Return of Information. Upon the termination for any reason of your employment with the Company, or at any time the Company may so request, you shall promptly deliver to the Company all Trade Secret, Confidential Information, and Company Property, including all documents (whether in electronic or paper form) that relate or refer to Trade Secret, Confidential Information, or Company Property. Additionally, upon the termination of employment with Company for any reason, you shall not retain any Confidential Information, Trade Secrets, or Company Property in any way obtained by you during the course of your employment with Company. Your obligations under this Agreement shall survive until such time as all of the Confidential Information or Trade Secrets disclosed hereunder becomes publicly known through no action or inaction by you. Company may notify any of your future or prospective employers or any third party of the existence of the provisions of this section of the Agreement.

(f)Cooperation. You agree that both during and after any employment with the Company, regardless of how, when or why such employment ends, you shall provide reasonable cooperation to the Company and its affiliates in connection with any pending or future lawsuit, arbitration, or proceeding between the Company and/or any affiliate and any third party, any pending or future regulatory or governmental inquiry or investigation concerning the Company, and/or any affiliate and any other legal, internal, or business matters of or concerning the Company and/or any affiliate. Such cooperation shall include meeting with and providing information the Company, any affiliate, and/or their respective attorneys, auditors, or other representatives as reasonably requested by the Company. The Company shall reimburse any reasonable legal fees and related expenses you incur in order to comply with this Section 4(f).

(g)Non-Disparagement. During and after any employment with the Company, regardless of how, when or why such employment ends, (i) you shall not make, either directly or by or through another person, any oral or written negative, disparaging, or adverse statements or representations of or concerning the Company or its subsidiaries or affiliates, any of their clients or businesses, or any of their current or former officers, directors, employees, or shareholders and (ii) the Company shall instruct the Company Parties (as defined below) not to make any oral or written negative, disparaging or adverse statements or representations of or concerning you; provided, however, that nothing herein shall prohibit (y) critical communications between you and the Company or Company Parties during the Term and in connection with your employment or (z) you or any Company Party from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process). For purposes of this Agreement, the term “Company Parties” shall mean the executive officers and designated spokespersons of the Company.

(h)Severability. If any of the restrictions in this Section 4 should for any reason whatsoever be declared invalid, the validity or enforceability of the remainder of this Agreement shall not be adversely affected thereby.

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(i)Equitable Relief. You acknowledge that your services to the Company are of a unique character that gives them a special value to the Company. You further recognize that any violation of the restrictions in this Section 4 may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to the Company. Accordingly, you agree that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to seek injunctive relief to restrain any violation by you of the restrictions in this Section 4.

(ii)In addition, the Company recognizes that any violation of the restrictions in Section 4(g)(ii)) may give rise to losses or damages for which you cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to you. Accordingly, the Company agrees that, in addition to any other remedy that you may have at law or in equity, you shall be entitled to seek injunctive relief to restrain any violation by the Company of the restrictions in Section 4(g)(ii).

(j)Reasonableness. You acknowledge that the limitations and obligations contained in this Section 4 are, individually and in the aggregate, reasonable and properly required by the Company, and in the event that any such limitations are found to be unreasonable and unenforceable, you shall submit to such limitations and/or obligations in such form as an arbitrator shall determine. You agree that you shall not challenge or contest the reasonableness, validity, or enforceability of any such limitations and obligations.

(k)Duty of Loyalty. You acknowledges you owe a duty of loyalty to the Company, which you acknowledge means, among other things, that while an employee of the Company, you must act in the best interests of the Company. You, therefore, agree that, without limitation: (a) you shall devote your best efforts and undivided time, effort and loyalty to the business of the Company; (b) you shall discharge all of your duties and responsibilities that are or may be assigned to you by the Company conscientiously, in good faith and to the best of your ability, giving to the Company the full benefit of your knowledge, expertise, skill and judgment; (c) you shall not engage in any illegal or unethical conduct in the performance of your duties and responsibilities; and (d) you shall not engage in any conduct that creates an actual, potential or apparent conflict between your personal interests and the Company’s interests, or which otherwise may adversely affect your judgment or ability to act in the Company’s best interests. If you are uncertain whether any particular activity may violate your duty of loyalty, you agree to notify the Company and not engage in any such conduct without the express, written consent of an authorized representative of the Company.

(l)Governmental Agencies. Notwithstanding any provision of this Agreement to the contrary, this Agreement is not intended to, and shall not, limit or restrict you from: (a) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (b) providing Confidential Information (as defined in Section 4(c)(ii)) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating or assisting with or participating in any government or regulatory entity investigation or proceeding.

5.Miscellaneous.

(a)Entire Agreement. This Agreement constitutes the entire agreement between you and the Company with respect to the terms and conditions of your employment by the Company and supersedes all prior agreements, understandings and arrangements, oral or written, between you and

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the Company or its affiliate (including, without limitation, MBS Textbook Exchange, Inc. and your letter agreement with the Company dated as of February 21, 2017) with respect to the subject matter hereof.

(b)Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors, and assigns.

(c)Amendments and Waivers. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by both parties to this Agreement. Electronic communications, even if receipt is acknowledged, shall not constitute an amendment or modification of this Agreement.

(d)Assignment. Neither this Agreement nor any rights or obligations that either party may have by reason of this Agreement shall be assignable by either party without the prior written consent of the other party.

(e)Notices. Any notice that may or must be given under this Agreement shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepaid, or reputable overnight courier, addressed to you at the address set forth on the first page hereof, or to the Company at 120 Mountain View Boulevard, Basking Ridge, NJ 07920 to the attention of the Vice President and Chief Human Resources Officer for the Company (with a copy to the General Counsel for the Company), or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this section.

(f)Section and Other Headings; Other. The section and other headings contained in this Agreement are for reference purposes only and are not deemed to be a part of this Agreement or to affect the meaning and interpretation of this Agreement. For purposes of this Agreement, the term “including” shall mean “including, without limitation.”

(g)Governing Law. This Agreement shall be construed (both as to validity and performance) and enforced in accordance with and governed by the laws of the State of New Jersey applicable to agreements made and to be performed wholly within the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New Jersey. Exclusive jurisdiction for all disputes or claims arising under or in connection with this Agreement, and any and all claims by or against you relating to your employment with the Company, shall be in the state and federal courts in New Jersey. YOU HEREBY CONSENT TO THE EXERCISE OF JURISDICTION OF THE COURT IN THE EXCLUSIVE FORUM SET FORTH IN THIS AGREEMENT AND WAIVE ANY RIGHT YOU MAY HAVE TO CHALLENGE OR CONTEST THE REMOVAL AT ANY TIME BY THE COMPANY TO FEDERAL COURT OF ANY ACTION YOU MAY BRING AGAINST IT IN STATE COURT. YOU AND THE COMPANY MUTUALLY WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS AGREEMENT OR YOUR EMPLOYMENT IN GENERAL.

(h)Survival of Rights and Obligations. All rights and obligations arising hereunder shall continue to have full force and effect after the termination of this Agreement unless otherwise provided herein to the extent necessary to preserve the intended benefits of such provisions. If any section of this Agreement is determined to be void, voidable or unenforceable, it shall have no effect on the remainder of this Agreement, which shall remain in full force and effect, and the provisions so held

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invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law.

(i)Section 409A of the Code. It is intended that the provisions of this Agreement comply with Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. If, at the time of your separation from service (within the meaning of Section 409A of the Code), (i) you shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable under this Agreement or any other plan, policy, arrangement or agreement of or with the Company or Barnes & Noble Education, Inc. (this Agreement and such other plans, policies, arrangements and agreements, the “Company Plans”) constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay any such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the first day of the seventh month following such separation from service. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to the Company. Except as specifically permitted by Section 409A of the Code, the benefits and reimbursements provided to you under this Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement or Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to you on or before the last day of the calendar year following the calendar year in which the underlying fee, cost, or expense is incurred. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Your tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A of the Code, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

(j)Representations and Warranties. You hereby represent and warrant to the Company that (i) your execution, delivery, and performance of this Agreement do not and shall not conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment or decree to which you are a party or by which you are bound; (ii) you are not a party to or bound by any employment agreement, non-compete agreement, or confidentiality agreement with any other person or entity that has not been disclosed to the Company prior to the execution of this Agreement; (iii) in the performance of any duties and responsibilities on behalf of the Company, you shall not divulge or use in any way any trade secrets or confidential or proprietary information that are within your possession or knowledge (if any) and are owned by any other person or entity, regardless of whether or not such trade secrets or confidential or proprietary information are subject to any written agreement; and (iv) upon the execution and delivery of this Agreement, it shall be a valid and binding obligation, enforceable in accordance with its terms. You hereby acknowledge and represent that you fully understand the terms and conditions contained herein.

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(k)Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. In the event any signature is delivered by facsimile, PDF, scanned, or electronic transmission, such signature shall create a valid and binding obligation of the party executing the same with the same force and effect as if such facsimile, PDF, scanned, or electronic signature page were an original thereof.

(l)Reasonable Scope of Agreement. You acknowledge and agree the foregoing agreements and restrictions are reasonable and necessary for the protection of the Company and its business, and are not limited in time to the duration of your employment but extend after and shall survive the termination of your employment, irrespective of the reason for your termination. You further acknowledge and agree the Company shall be entitled to seek an injunction or other forms of equitable relief to prevent or terminate any violation of the foregoing restrictions. Any such relief shall be in addition to and not in lieu of any other remedy available to the Company, whether at law or in equity.

(m)Employee Review of Agreement. You understand you have the right to consult an attorney prior to the signing of this Agreement, and acknowledge your signature below signifies you have fully reviewed and understand all of the terms of this Agreement and have agreed to those terms.

If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this Agreement.

Very truly yours,

Sign: /s/ JoAnn Magill
Name: JoAnn Magill
Title: SVP, Human Resources

Date: June 27, 2019

Accepted and Agreed to:

Dave Henderson

Sign: /s/ Dave Henderson

Date: June 25, 2019

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EXHIBIT A

GENERAL RELEASE AND WAIVER

1.Dave Henderson (“Employee”) hereby acknowledges and agrees that Employee’s employment with MBS Textbook Exchange, LLC (the “Company”) terminated on_________ 20___ (the “Termination Date”).

2.Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the payments and benefits set forth in section 3(f) and 3(g) of the employment letter agreement, dated as of June __, 2019, between Employee and the Company (such agreement referred to herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”) (or, as applicable, the payments and benefits set forth in section 3(g) of the Employment Agreement), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release.

3. THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE EMPLOYEE SIGNS THIS RELEASE, EMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE THAT EMPLOYEE UNDERSTANDS IT FULLY.

(b)In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company, and on behalf of the Company and each Releasee (as defined below), Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the Company, its current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, benefit plans, agents, attorneys, advisors, counselors and employees, and the current and former officers, directors, shareholders, agents, attorneys, advisors, counselors and employees of any such parent, affiliate, subsidiary, branch or division of the Company and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (each, a “Releasee”), from or in connection with, and hereby waives and/or settles, except as provided in Section 3(c) herein, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever, whether or not related to employment, and which Releasor ever had, now has or hereafter can, shall or may have as of the date of this Release, including, without limitation, (i) any rights and/or claims arising under any contract, express or implied, written or oral, including, without limitation, the Employment Agreement; (ii) any rights and/or claims arising under any applicable foreign, federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices, including, without limitation, family and medical, and/or, specifically, that prohibit discrimination based upon age, race, religion, sex, color, creed, national origin, sexual orientation, marital status, disability, medical condition, pregnancy, veteran status or any other unlawful bases, including, without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act, the Immigration Reform and Control Act, the Fair Credit Reporting Act, the Consumer Credit

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Protection Act, the Fair Labor Standards Act, the National Labor Relations Act, the Uniform Services Employment and Reemployment Rights Act of 1994, the Genetic Information Nondiscrimination Act, the Occupational Safety and Health Act, the Patient Protection and Affordable Care Act, the Drug-Free Workplace Act, the Equal Pay Act, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar applicable statutes, orders, laws, ordinances, regulations or the like, or case law, of the State of New Jersey and any state in which any Releasee is subject to jurisdiction, or any political subdivision thereof, including, without limitation, the New York State Human Rights Law, the New York State Labor Law, the New York City Human Rights Law, the New Jersey Law Against Discrimination and the New Jersey and New York Wage and Hour Laws, and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes, orders, laws, ordinances, regulations or the like; (iii) any waivable rights and/or claims relating to wages and hours, including under state or local labor or wage payment laws; (iv) any rights and/or claims to benefits that Employee may have or become entitled to receive under any severance, termination, change of control, bonus or similar policy, plan, program, agreement or similar or related arrangements, including, without limitation, any offer letter, letter agreement or employment agreement between Employee and the Company; (v) any rights and/or claims that Employee may have to receive any equity in the Company (whether restricted or unrestricted) in the future; and (vi) and any rights and/or claims for attorneys’ fees. Employee agrees not to challenge or contest the reasonableness, validity, or enforceability of this Release.

(c)Notwithstanding the foregoing, Employee does not release any Releasee from any of the following rights and/or claims: (i) any rights and/or claims Employee may have that arise after the date Employee signs this Release; (ii) any rights and/or claims that by law cannot be waived by private agreement; (Hi) Employee’s right to file a charge with or participate in any investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission (“EEOC”) or similar government agency; provided that even though Employee can file a charge or participate in an investigation or proceeding conducted by the EEOC or similar government agency, by executing this Release, Employee is waiving his/her ability to obtain relief of any kind from any Releasee to the extent permitted by law; (iv) Employee’s non-forfeitable rights to accrued benefits (within the meaning of Sections 203 and 204 of ERISA); (v) any rights and/or claims to indemnification from the Company pursuant to its governing documents or applicable law and any rights and/or claims to insurance coverage under any directors’ and officers’ personal liability insurance or fiduciary insurance policy; and (vi) any rights and/or claims to enforce the Employment Agreement in accordance with its terms.

4.Nothing in or about this Release prohibits Employee from: (i) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (H) providing Confidential Information (as defined in Section 4(c)(i) of the Employment Agreement) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (Hi) cooperating, participating, or assisting in any government or regulatory entity investigation or proceeding.

5.Employee represents and warrants that Employee has not filed or commenced any complaints, claims, actions, or proceedings of any kind against any Releasee with any federal, state, or local court or any administrative, regulatory or arbitration agency or body. Employee hereby waives any right to, and agrees not to, seek reinstatement or employment of any kind with any Releasee and, without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, nondiscriminatory basis for rejecting any such application or, in the event Employee obtains such

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employment, for terminating such employment. This Release and the Separation Benefit are not intended to be, shall not be construed as, and are not an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions.

6. Employee hereby represents and agrees that Employee shall keep confidential and not disclose orally or in writing, to any person, except as may be required by law, any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder. Employee further agrees that, except as shall be required by law, Employee shall keep confidential and not disclose orally or in writing, directly or indirectly, to any person (except Employee’s immediate family, attorneys and accountant), any and all information concerning any facts, claims or assertions relating or referring to any experiences of Employee or treatment Employee received by or on behalf of any Releasee through the date of this Release.

(b)If Employee is requested or required (by oral questions, interrogatories, requests for information, or documents, subpoena, civil investigative demand or similar process) to disclose any information covered by Section 6(a) herein, Employee shall promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company, to waive compliance with the provisions of this Release. Employee shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Employee is compelled to disclose such information or else stand liable for contempt or suffer other sanction, censure, or penalty, Employee shall disclose only so much of such information to the party compelling disclosure as he/she believes in good faith on the basis of advice of counsel is required by law, and Employee shall give the Company prior notice of such information he believes he is required to disclose.

7. Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

(b)Without limitation to the survival of any other terms of the Employment Agreement subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release, Employee and the Company expressly acknowledge that the terms of Sections 4 and 5 of the Employment Agreement survive and shall be in full force and effect as provided in the Employment Agreement.

8.The covenants, representations, and acknowledgments made by Employee in this Release shall continue to have full force and effect after the execution and effectiveness of this Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them, to the extent necessary to preserve the intended benefits of such provisions. If any section of this Release is determined to be void, voidable, or unenforceable, it shall have no effect on the remainder of this Release, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law. Without limitation to Sections 3(f) and 3(g) of the Employment Agreement, the Company shall be excused and released from any obligation to make payment of the Separation Benefit, and Employee shall be obligated to return to the Company the Separation Benefit, in the event that Employee is found to have (a) made a material misstatement in any

A-3

term, condition, covenant, representation, or acknowledgment in this Release, or (b) Employee is found to have committed or commits a material breach of any term, condition, or covenant in this Release.

9.This Release and the Employment Agreement constitute the sole and complete agreement between the parties with respect to the matters set forth therein and supersedes all prior agreements, understandings, and arrangements, oral or written, between Employee and the Company with respect to the subject matter thereof. This Release may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an instrument in writing, waive compliance by the other party with any term or provision of this Release to be performed or complied with by such other party.

10.With respect to any claims or disputes under or in connection with this Release or any claims released under Section 3 of this Release, Employee and the Company hereby acknowledge and agree that Section 5(g) of the Employment Agreement shall govern. Employee acknowledges that a breach or threatened breach of the provisions of this Release may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law, and that such violation may result in irreparable and continuing harm to the Company. Accordingly, Employee agrees that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to seek equitable relief, including, without limitation, injunction and specific performance and Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies (including claims for damages) in the event of a breach or threatened breach of this Release.

11.Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all of its terms, (b) Employee understands all of the terms of this Release, which are fair, reasonable, and are not the result of any fraud, duress, coercion, pressure, or undue influence exercised by or on behalf of any Releasee, and (c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely, and voluntarily.

12.By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided and has adequate time (that is, 21 days) to review this Release and to consider whether to sign this Release, (c) Employee has been advised that Employee has 7 days following execution to revoke this Release (“Revocation Period”), (d) the Release is written in a manner calculated to be understood by Employee, (e) the Release represents Employee’s knowing and voluntary release of any and all claims that he/she might have up through the date this Release is signed, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, (f) Employee has not been asked to release, nor has he/she released, any claim that may arise after the date of this Release, and (g) the consideration that Employee will receive in exchange for signing this Release (that is, the Separation Benefit) is something of value to which he/she was not already entitled. Notwithstanding anything to the contrary contained herein or in the Employment Agreement, this Release shall not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired (that is, the 8th day after the Employee signs the Release) and provided that Employee has not revoked this Release. Employee agrees that any revocation of the Release by Employee shall be made in writing and delivered to the Vice President and Chief Human Resources Officer, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, NJ 07920, in a manner such that it is delivered before the expiration of the Revocation Period.

A-4

Employee acknowledges that revocation of this Release shall result in the Company’s not having an obligation to pay the Separation Benefit.

Signature:		Date:
	Dave Henderson

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EX-10.2

Exhibit 10.2

June 19, 2019

Jonathan Shar
[ ]

[ ]

Dear Jonathan,

It is my pleasure to update our offer of employment with B&N Education, LLC a subsidiary of Barnes & Noble Education, Inc. (“BNED” or “Company”). The following represents the key elements of our offer:
Job Title:	SVP, Revenue & Product Development
Reports to:	Michael P. Huseby — Chairman & CEO
Base Salary:	$400,000 annualized ($15,384.62 bi-weekly) Your position is considered an exempt position, which means that you will not be eligible for overtime pay for hours worked in excess of 40 hours in a given week.
Incentive Compensation:	Eligible to participate in our FY19 Incentive Compensation Plan. The bonus target level for your position is 50% of your base salary for fiscal year 2019 and 75% for fiscal year 2020. Payments under that plan are based upon achievement of measurable objectives as defined by the Company each fiscal year. The fiscal year period is defined as May 1st to April 30th. Your FY19 bonus will be guaranteed at 100% of your target, as long as you remain employed by BNED on the payment date of such bonus. Details to follow.
Benefits:	You are eligible to participate in the Company’s health and welfare programs.
Severance:	If (a) your employment is terminated by the Company without Cause or (b) you voluntarily terminate your employment for Good Reason, the Company shall (i) pay you an amount equal to one (1) times your then-annual base salary (“Severance Amount”), and (ii) provide you continued health care coverage at the Company’s cost pursuant to the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) if you elect COBRA coverage until the earlier of when you are no longer eligible for COBRA coverage or twelve (12) months following your date of termination (the “COBRA Benefits”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this letter or your Agreement Regarding Certain Terms and Conditions of Employment (the “Agreement”) and do not materially breach such

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

provisions at any time during the Relevant Period (as defined in the Agreement). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this offer letter or the your Agreement Regarding Certain Terms and Conditions of Employment prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired and the COBRA Benefits will be provided on a monthly basis. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid and the COBRA Benefits shall not be made available to you.

For purposes of this letter, “Cause” means (A) your engaging in intentional misconduct, intentional omissions or gross negligence that, in any case, is materially injurious to Company; (B) your indictment, entry of a plea of nolo contendere, or conviction by a court of competent jurisdiction with respect to any felony or other crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) fraud, dishonesty, embezzlement, or misappropriation in connection with the performance of your employment duties and responsibilities; (D) your engaging in any act of intentional misconduct or moral turpitude reasonably likely to adversely affect the Company or its business; (E) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (F) your willful failure or refusal to properly perform the duties, responsibilities, or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (G) your material breach of this offer letter, the Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants); provided that, with respect to clauses (C), (F) and (G), you have failed to cure such circumstances within 10 days following written notice from the Company.

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

For purposes of this letter, “Good Reason” shall mean the occurrence of one or more of the following events without your written consent: (A) a material diminution of your duties; (B) a material diminution in the authority, duties or responsibilities of the supervisor to whom you are required to report; (C) reduction in the annual Base Salary you receive from the Company or a reduction in your target annual bonus; (D) you are asked to engage in conduct that is unlawful; (E) a reduction in your title; (F) a required relocation of your principal place of employment by more than 50 miles or (G) during the two-year period following a Change in Control, a material reduction in the value of the employee benefits provided to you. To invoke a Good Reason termination, you must first give the Company written notice stating with reasonable specificity the basis for the claim of Good Reason within 60 days following their occurrence. If the Company does not cure within thirty (30) days of receipt of such notice, you may terminate your employment for Good Reason by giving written notice to the Company within thirty (30) days following the end of such cure period. For purposes of this letter, “Disability” means you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

Change of Control

If at any time during your employment (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within 90 days preceding or two years following the Change of Control or the remainder of the current Renewal Term (as defined in the Employment Agreement), as applicable, then the Company shall (A) pay you an amount equal to two times the sum of (i) your then Annual Base Salary, and (ii) your target annual bonus for the year of termination (or, if higher, as in effect immediately prior to the Change of Control) (“Change of Control Amount”), and (B) provide you the COBRA Benefits, less all applicable withholding and other applicable taxes and deductions. (A) The Change of Control Amount and the COBRA Benefits are subject to you executing and delivering to the Company (and not revoking) the Release within 60 days following your termination date, (B) the Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates (or, if later, when the Release becomes irrevocable) and (C) the COBRA Benefits will be provided on a monthly basis. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

 of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this paragraph would be payable to you under this Agreement or any other plan, policy, or arrangement of the Company or Barnes & Noble Education, Inc. or any affiliate, exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation; in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. For the avoidance of doubt, the amounts payable to you under this paragraph shall be in lieu of any amounts payable to you under the previous paragraph (Severance).

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:
(i) during any period of 24 consecutive months, individuals who were Directors of the Company on the first day of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board; provided, however, that any individual becoming a Director of the Company subsequent to the first day of such period whose election, or nomination for election, by the Company’s stockholders was approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director;

(ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause (A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of the Company to an entity that is not an affiliate (a “Sale”), in each case, if such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Company

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (or a successor rule thereto)) (the “Exchange Act”) of the securities eligible to vote for the election of the Board (“Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation resulting from such Reorganization or Sale (including a corporation that, as a result of such transaction, owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Corporation”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of the Continuing Corporation that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any company or other entity involved in or forming part of such Reorganization or Sale other than the Company), (2) no “person” (as such term is used in Section 13(d) of the Exchange Act) (each, a “Person”) (excluding (x) any employee benefit plan (or related trust) sponsored or maintained by the Continuing Corporation or any corporation controlled by the Continuing Corporation or (y) Leonard Riggio, his spouse, his lineal descendants, trusts for the exclusive benefit of any such individuals, the executor or administrator of the estate or the legal representative of any of such individuals and any entity controlled by any of the foregoing Persons (the “Riggio Shareholders”) beneficially owns, directly or indirectly, 40% or more of the combined voting power of the then outstanding voting securities of the Continuing Corporation and (3) at least a majority of the members of the board of directors of the Continuing Corporation were Incumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale; or

(iii) any person, corporation or other entity or “group” (as used in Section 14(d)(2) of the Exchange Act) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate, (C) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the voting power of the Company Voting Securities or (D) the Riggio Shareholders) becomes the beneficial owner, directly or indirectly, of

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

	securities of the Company representing 40% or more of the combined voting power of the Company Voting Securities; provided, however, that for purposes of this subparagraph (iii), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an affiliate, (y) any acquisition by an underwriter temporarily holding such Company Voting Securities pursuant to an offering of such securities or any acquisition by a pledgee of Company Voting Securities holding such securities as collateral or temporarily holding such securities upon foreclosure of the underlying obligation or (z) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change of Control for purposes of subparagraph (ii) above.
You have represented that, while employed at Akademos, you signed an Agreement that contained a "No Competition" provision. You and your counsel have advised us that, in your and your counsel's informed opinion, the "No Competition" provision is not enforceable under applicable law and does not affect your ability to accept the position that BNED has offered to you. Thus, we agree that, in the event that Akademos pursues any legal action of any sort (regardless of whether such legal action involves the filing of an action in court) to enforce the "No Competition" provision to bar your employment by or otherwise limit the terms under which you may work for BNED, BNED shall indemnify you for reasonable attorneys' fees incurred by you as a result of hiring counsel acceptable to BNED to represent you in such action or negotiation. BNED further agrees that it shall indemnify you with respect to any judgments that may be entered or settlements that BNED approves in writing in connection with Akademos' pursuit of any such legal action. BNED's duty to indemnify you shall not extend to any appeal proceeding initiated by you without the consent of BNED and shall terminate should you reject any recommendation by BNED to resolve or settle such legal action. BNED has no requirement or expectation that you solicit any Akademos employee in connection with your employment.
This letter shall not be deemed to be a contract of employment for a specific period of time and nothing contained herein shall alter your status as an at-will employee. This letter supersedes any prior written or oral agreements between you and the Company relating to the subject matter hereof. Please sign this letter to acknowledge receipt and acceptance of the terms. Please return a signed copy to me and keep a copy for your records.

Sincerely,

/s/ JoAnn Magill

JoAnn Magill
SVP, Human Resources

Agreed and Accepted:
Jonathan Shar

/s/ Jonathan Shar
Signature July 1, 2019
Date

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

EXHIBIT A

GENERAL RELEASE AND WAIVER

1. Jonathan Shar (“Employee”) hereby acknowledges and agrees Employee’s employment with Barnes and Noble Education, LLC, a subsidiary of Barnes & Noble Education, Inc. (the “Company”) terminated on __________, 20__ (the “Termination Date”).

2. Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the Severance Amount (or, as applicable, the Change in Control Amount) and the COBRA Benefits, each as defined in the offer letter dated as of June __, 2019, including the attached Agreement, between Employee and the Company (such agreement referred to collectively herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release.

3. (a) THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE EMPLOYEE SIGNS THIS RELEASE, EMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE THAT EMPLOYEE UNDERSTANDS IT FULLY.

(b) In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company, and on behalf of the Company and each Releasee (as defined below), Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the Company, its current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, benefit plans, agents, attorneys, advisors, counselors and employees, and the current and former officers, directors, shareholders, agents, attorneys, advisors, counselors and employees of any such parent, affiliate, subsidiary, branch or division of the Company and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (each, a “Releasee”), from or in connection with, and hereby waives and/or settles, except as provided in Section 3(c) herein, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever, whether or not related to employment, and which Releasor ever had, now has or hereafter can, shall or may have as of the date of this Release, including, without limitation, (i) any rights and/or claims arising under any contract, express or implied, written or oral, including, without limitation, the Employment Agreement; (ii) any rights and/or claims arising under any applicable foreign, federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices, including, without limitation, family and medical, and/or, specifically, that prohibit discrimination based upon age, race, religion, sex, color, creed, national origin, sexual orientation, marital status, disability, medical condition, pregnancy, veteran status or any other unlawful bases, including, without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act, the Immigration Reform and Control Act, the Fair Credit Reporting Act, the Consumer Credit

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

Protection Act, the Fair Labor Standards Act, the National Labor Relations Act, the Uniform Services Employment and Reemployment Rights Act of 1994, the Genetic Information Nondiscrimination Act, the Occupational Safety and Health Act, the Patient Protection and Affordable Care Act, the Drug-Free Workplace Act, the Equal Pay Act, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar applicable statutes, orders, laws, ordinances, regulations or the like, or case law, of the State of New Jersey and the State of New York and any state in which any Releasee is subject to jurisdiction, or any political subdivision thereof, including, without limitation, the New York State Human Rights Law, the New York State Labor Law, the New York City Human Rights Law, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, and the New Jersey Wage and Hour Law, and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes, orders, laws, ordinances, regulations or the like; (iii) any waivable rights and/or claims relating to wages and hours, including under state or local labor or wage payment laws; (iv) any rights and/or claims to benefits that Employee may have or become entitled to receive under any severance, termination, change of control, bonus or similar policy, plan, program, agreement or similar or related arrangements, including, without limitation, any offer letter, letter agreement or employment agreement between Employee and the Company; (v) any rights and/or claims that Employee may have to receive any equity in the Company (whether restricted or unrestricted) in the future; and (vi) and any rights and/or claims for attorneys’ fees. Employee agrees not to challenge or contest the reasonableness, validity, or enforceability of this Release.

(c) Notwithstanding the foregoing, Employee does not release any Releasee from any of the following rights and/or claims: (i) any rights and/or claims Employee may have that arise after the date Employee signs this Release; (ii) any rights and/or claims that by law cannot be waived by private agreement; (iii) Employee’s right to file a charge or report with, or participate in, any investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission (“EEOC”) or other government agency; provided that even though Employee can file a charge or report or participate in an investigation or proceeding conducted by the EEOC or other government agency, by executing this Release, Employee is waiving his/her ability to obtain relief of any kind from any Releasee to the extent permitted by law (but Employee does not waive the right to any recovery authorized under Section 21F of the Securities Exchange Act of 1934); (iv) Employee’s non-forfeitable rights to accrued benefits (within the meaning of Sections 203 and 204 of ERISA); or (v) any rights and/or claims to indemnification from the Company pursuant to its governing documents or applicable law and any rights and/or claims to insurance coverage under any directors’ and officers’ personal liability insurance or fiduciary insurance policy.

4. Nothing in or about this Release is intended to, and shall not, prohibit Employee from engaging in the following activities, and the limitations in Section 3 of the Agreement shall not apply to the disclosure of Confidential Information under the following circumstances: (i) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (ii) providing Confidential Information (as defined in Section 3 of the Agreement) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating with or participating or assisting in any government or regulatory entity investigation or proceeding. With respect to each of these three scenarios, however, Employee agrees to take all reasonable steps to prevent the disclosure of Confidential Information beyond the allowable parameters described in this Section 4.

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

5. Employee represents and warrants that Employee has not filed or commenced any complaints, claims, actions, or proceedings of any kind against any Releasee with any federal, state, or local court or any administrative, regulatory or arbitration agency or body except those that Employee has listed with specificity next to Employee’s name in the signature block below; provided, however, that Employee is not required to disclose any complaint or other disclosures that are required or protected under the Sarbanes-Oxley Act of 2002, the Securities Exchange Act of 1934, 18 U.S.C. §1513(e), or any other law, rule, or regulation that is subject to the jurisdiction of the Securities and Exchange Commission.

Employee hereby waives any right to, and agrees not to, seek reinstatement or employment of any kind with any Releasee and, without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, nondiscriminatory basis for rejecting any such application or, in the event Employee obtains such employment, for terminating such employment. This Release and the Separation Benefit are not intended to be, shall not be construed as, and are not an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions.

6. (a) Employee hereby represents and agrees that, except as shall be required by law or as permitted under Section 3(c)(iii) or Section 4 of this Release, Employee shall (i) keep confidential and not disclose orally or in writing, to any person, except as may be required by law, any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder and (ii) keep confidential and not disclose orally or in writing, directly or indirectly, to any person (except Employee’s immediate family, attorneys and accountant), any and all information concerning any potential claims or causes of action that are being released in this Release, or allegations or facts that would support such claims or causes of action.

(b) If Employee is requested or required (by oral questions, interrogatories, requests for information, or documents, subpoena, civil investigative demand or similar process) to disclose any information covered by Section 6(a) herein, Employee shall promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company, to waive compliance with the provisions of this Release. Employee shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Employee is compelled to disclose such information or else stand liable for contempt or suffer other sanction, censure, or penalty, Employee shall disclose only so much of such information to the party compelling disclosure as he/she believes in good faith on the basis of advice of counsel is required by law, and Employee shall give the Company prior notice of such information he believes he is required to disclose.

7. (a) Except as shall be required by law or as permitted under Section 3(c)(iii) or Section 4 of this Release, Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

(b) Without limitation to the survival of any other terms of the Employment Agreement subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release, Employee and the Company expressly acknowledge that the terms of Sections 3 through 6 of the Agreement survive and shall be in full force and effect as provided in the Agreement.

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

8. The covenants, representations, and acknowledgments made by Employee in this Release shall continue to have full force and effect after the execution and effectiveness of this Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them, to the extent necessary to preserve the intended benefits of such provisions. If any section of this Release is determined to be void, voidable, or unenforceable, it shall have no effect on the remainder of this Release, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law. The Company shall be excused and released from any obligation to make payment of the Separation Benefit, and Employee shall be obligated to return to the Company the Separation Benefit, in the event that Employee is found to have (a) made a material misstatement in any term, condition, covenant, representation, or acknowledgment in this Release, or (b) Employee is found to have committed or commits a material breach of any term, condition, or covenant in this Release.

9. This Release and the Employment Agreement constitute the sole and complete agreement between the parties with respect to the matters set forth therein and supersedes all prior agreements, understandings, and arrangements, oral or written, between Employee and the Company with respect to the subject matter thereof. This Release may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an instrument in writing, waive compliance by the other party with any term or provision of this Release to be performed or complied with by such other party.

10. With respect to any claims or disputes under or in connection with this Release or any claims released under Section 3 of this Release, Employee and the Company hereby acknowledge and agree that Section 9 of the Agreement shall govern. Employee acknowledges that a breach or threatened breach of the provisions of this Release may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law, and that such violation may result in irreparable and continuing harm to the Company. Accordingly, Employee agrees that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to seek equitable relief, including, without limitation, injunction and specific performance and Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies (including claims for damages) in the event of a breach or threatened breach of this Release.

11. Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all of its terms, (b) Employee understands all of the terms of this Release, which are fair, reasonable, and are not the result of any fraud, duress, coercion, pressure, or undue influence exercised by or on behalf of any Releasee, and (c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely, and voluntarily.

12. By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided and has adequate time (that is, 21 days) to review this Release and to consider whether to sign this Release, (c) Employee has been advised that Employee has 7 days following execution to revoke this Release (“Revocation Period”), (d) the Release is written in a manner calculated to be understood by Employee, (e) the Release represents Employee’s knowing and voluntary release of any and all claims that he/she might have up through the date this Release is signed, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, (f) Employee has not been asked to release, nor has

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

he/she released, any claim that may arise after the date of this Release, and (g) the consideration that Employee will receive in exchange for signing this Release (that is, the Separation Benefit) is something of value to which he/she was not already entitled. Notwithstanding anything to the contrary contained herein or in the Employment Agreement, this Release shall not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired (that is, the 8th day after the Employee signs the Release) and provided that Employee has not revoked this Release. Employee agrees that any revocation shall be made in writing and delivered to JoAnn Magill, SVP, Human Resources Officer, 120 Mountain View Boulevard, Basking Ridge, NJ 07920 in a manner such that it is delivered before the expiration of the Revocation Period. Employee acknowledges that revocation of this Release shall result in the Company’s not having an obligation to pay the Separation Benefit.

Signature: _________________________________________Date: ______________________________

Barnes & Noble Education, Inc.
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665

EX-31.1

Exhibit 31.1

CERTIFICATION BY THE

CHIEF EXECUTIVE OFFICER PURSUANT TO

17 CFR 240.13a-14(a)/15(d)-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael P. Huseby, certify that:

1.I have reviewed this report on Form 10-Q for the quarterly period ended July 31, 2021 of Barnes & Noble Education, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 2, 2021

By:	/s/ Michael P. Huseby
	Michael P. Huseby
	Chairman and Chief Executive Officer
	Barnes & Noble Education, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION BY THE

CHIEF FINANCIAL OFFICER PURSUANT TO

17 CFR 240.13a-14(a)/15(d)-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas D. Donohue, certify that:

1.I have reviewed this report on Form 10-Q for the quarterly period ended July 31, 2021 of Barnes & Noble Education, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 2, 2021

By:	/s/ Thomas D. Donohue
	Thomas D. Donohue
	Chief Financial Officer
	Barnes & Noble Education, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael P. Huseby, Chairman and Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael P. Huseby

Michael P. Huseby

Chairman and Chief Executive Officer
Barnes & Noble Education, Inc.

September 2, 2021

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas D. Donohue, Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas D. Donohue

Thomas D. Donohue

Chief Financial Officer
Barnes & Noble Education, Inc.

September 2, 2021

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Jul. 31, 2021	Aug. 27, 2021
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2021
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Shell Company	false
Entity Registrant Name	BARNES & NOBLE EDUCATION, INC.
Entity Central Index Key	0001634117
Current Fiscal Year End Date	--04-30
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		51,587,330
Document Quarterly Report	true
Trading Symbol	BNED
Security Exchange Name	NYSE
Title of 12(b) Security	Common Stock, $0.01 par value per share
Document Transition Report	false
Entity File Number	1-37499
Local Phone Number	991-2665
City Area Code	(908)
Entity Address, Postal Zip Code	07920
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-0599018
Entity Address, State or Province	NJ
Entity Address, City or Town	Basking Ridge,
Entity Address, Address Line One	120 Mountain View Blvd.,
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Sales:
Product sales and other	$ 227,770	$ 193,210
Rental income	13,024	10,804
Total sales	240,794	204,014
bned_Cost of Product and Other Cost of Sales	174,161	165,765
Rental cost of sales	6,604	7,387
Cost of Goods and Services Sold	180,765	173,152
Gross profit	60,029	30,862
Selling and administrative expenses	86,235	70,043
Depreciation and amortization expense	12,624	14,063
Restructuring and other charges	2,623	5,671
Operating (loss) income	(41,453)	(58,915)
Interest expense, net	2,494	2,653
Income (loss) before taxes	(43,947)	(61,568)
Income tax expense (benefit)	399	(14,916)
Net (loss) income	$ (44,346)	$ (46,652)
(Loss) Earnings per share of common stock
Basic	$ (0.86)	$ (0.96)
Diluted	$ (0.86)	$ (0.96)
Weighted average common shares outstanding
Basic	51,474	48,411
Diluted	51,474	48,411

XML

Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands	Jul. 31, 2021	May 01, 2021	Aug. 01, 2020
Current assets:
Cash and cash equivalents	$ 7,649	$ 8,024	$ 7,471
Receivables, net	118,254	121,072	107,522
Merchandise inventories, net	472,461	281,112	575,246
Textbook rental inventories	6,657	28,692	16,482
Prepaid expenses and other current assets	64,724	61,933	22,415
Total current assets	669,745	500,833	729,136
Net property and equipment	91,080	89,172	94,102
Operating Lease, Right-of-Use Asset	289,102	240,456	320,287
Intangible assets, net	146,035	150,904	170,466
Goodwill	4,700	4,700	4,700
Deferred Tax Assets, Tax Deferred Expense	23,248	23,248	8,459
Other noncurrent assets	27,405	29,105	33,646
Total assets	1,251,315	1,038,418	1,360,796
Current liabilities:
Accounts payable	331,055	137,578	291,496
Accrued liabilities	92,061	92,871	75,084
Operating Lease, Liability, Current	135,937	92,513	131,525
Short-term Debt	50,000	50,000	0
Total current liabilities	609,053	372,962	498,105
Operating Lease, Liability, Noncurrent	179,540	184,780	209,867
Other long-term liabilities	52,427	52,042	45,986
Long-term Line of Credit, Noncurrent	153,700	127,600	234,560
Liabilities	994,720	737,384	988,518
Commitments and contingencies	0	0	0
Preferred Stock, Value, Issued	0	0	0
Common Stock, Value, Outstanding	536	533	526
Additional Paid in Capital	735,376	734,257	734,474
Retained Earnings (Accumulated Deficit)	(458,960)	(414,614)	(329,479)
Treasury Stock, Value	(20,357)	(19,142)	(33,243)
Total Equity	256,595	301,034	372,278
Total liabilities and Parent Company equity	$ 1,251,315	$ 1,038,418	$ 1,360,796
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	5,000	5,000	5,000
Preferred Stock, Shares Issued	0	0	0
Preferred Stock, Shares Outstanding	0	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01	$ 0.01
Common Stock, Shares Authorized	200,000	200,000	200,000
Common Stock, Shares, Issued	53,665	53,327	52,654
Common Stock, Shares, Outstanding	51,587	51,379	48,633

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Net Income (Loss) Attributable to Parent	$ (44,346)	$ (46,652)
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization expense	12,624	14,063
Content Amortization	1,275	1,164
Amortization of Debt Issuance Costs	362	270
COGS Inventory Loss and Markdown	434	0
Deferred Income Tax Expense (Benefit)	0	(654)
Share-based Compensation	1,122	1,521
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	1,814	1,424
Increase (Decrease) in Operating Liabilities	(10,464)	(6,770)
Net Cash Provided by (Used in) Operating Activities	(17,462)	(53,149)
Cash flows from investing activities:
Purchases of property and equipment	(11,370)	(7,055)
Increase (Decrease) in Other Noncurrent Assets	350	(85)
Net cash flows used in investing activities	(11,020)	(7,140)
Cash flows from financing activities:
Proceeds from borrowings on Credit Facility	71,720	186,700
Repayments of borrowings on Credit Facility	(45,620)	(126,840)
Payments for Repurchase of Common Stock	(1,215)	(342)
Net cash flows used in financing activities	24,885	59,518
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	(3,597)	(771)
Changes in other operating assets and liabilities, net:
Receivables, net	2,818	(16,671)
Merchandise inventories	(191,783)	(146,307)
Textbook rental inventories	22,035	24,228
Prepaid expenses and other current assets	(6,012)	(6,238)
Accounts payable and accrued liabilities	192,659	127,473
Changes in other operating assets and liabilities, net	(19,717)	17,515
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	16,814	9,008
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 13,217	$ 8,237

XML

Consolidated Statement of Equity Statement - USD ($) $ in Thousands	Total	Additional Paid-in Capital [Member]	Common Stock [Member]	Treasury Stock [Member]	Retained Earnings
Common Stock, Shares, Issued			52,140,000
Treasury Stock, Shares				3,842,000
Total Equity	$ 417,751	$ 732,958	$ 521	$ 32,901	$ (282,827)
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			514,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	(5)	$ 5
Stock-based compensation expense	1,521	1,521
Shares repurchased for tax withholdings for vested stock awards				179,000
Treasury Stock, Value, Acquired, Cost Method				$ 342
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation	(342)
Net Income (Loss) Attributable to Parent	$ (46,652)
Common Stock, Shares, Issued	52,654,000		52,654,000
Treasury Stock, Shares				4,021,000
Total Equity	$ 372,278	734,474	$ 526	$ 33,243	(329,479)
Common Stock, Shares, Issued	53,327,000		53,327,000
Treasury Stock, Shares				1,948,000
Total Equity	$ 301,034	734,257	$ 533	$ 19,142	(414,614)
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			338,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	(3)	$ 3
Stock-based compensation expense	$ 1,122	1,122
Shares repurchased for tax withholdings for vested stock awards	130,135			130,000
Treasury Stock, Value, Acquired, Cost Method				$ 1,215
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation	$ (1,215)
Net Income (Loss) Attributable to Parent	$ (44,346)
Common Stock, Shares, Issued	53,665,000		53,665,000
Treasury Stock, Shares				2,078,000
Total Equity	$ 256,595	$ 735,376	$ 536	$ 20,357	$ (458,960)

XML

Organization

3 Months Ended

Jul. 31, 2021

Organization

Note 1. Organization

Description of Business

Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers, and a leading provider of digital education solutions. We operate 1,429 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omnichannel retail environment. Additionally, we offer direct-to-student products and services to help students study more effectively and improve academic performance.

The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We expect to continue to introduce scalable and advanced digital solutions focused largely on the student, expand our e-commerce capabilities and accelerate such capabilities through our recent merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”) (collectively referred to herein as the “FLC Partnership”), increase market share with new accounts, and expand our strategic opportunities through acquisitions and partnerships. We expect general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the “FLC Partnership”. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo and emblematic general merchandise business.

We believe the Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels, and for being a trusted source for students in our direct-to-student digital solutions business.

We have three reportable segments: Retail, Wholesale and DSS. For additional information related to our strategies, operations and segments, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Partnership with Fanatics and FLC

In December 2020, we entered into the FLC Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with FLC, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.

We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that

reflect each campus’s brand. We leverage Fanatics’ e-commerce technology and expertise for the operational management of the emblematic merchandise and gift sections of our campus store websites. FLC manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores.

In December 2020, Fanatics, Inc. and Lids Holdings, Inc. jointly made a strategic equity investment in BNED. On April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC, which was finalized during the first quarter of Fiscal 2022. As contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products during the first quarter of Fiscal 2022. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories and Note 6. Equity and Earnings Per Share in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

COVID-19 Business Impact

Since the fourth quarter of Fiscal 2020, our business has been significantly negatively impacted by the COVID-19 pandemic, resulting in an unprecedented material decline in revenue. Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools currently expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities and events, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic.

The COVID-19 impact on higher education remains a fluid situation, and we are committed to supporting our campus partners through our flexible offerings and our ability to quickly pivot to ensure uninterrupted service as institutions manage the safety of their campuses. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors currently in place change, there could be a further impact on our results of operations, financial condition and cash flows from operations. We will continue to assess our operations and will continue to consider the guidance of local governments and our campus partners to determine when our operations can begin returning to normal levels of business. Please see our Part II - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

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Employees Benefit Plan

3 Months Ended

Jul. 31, 2021

Employees' Defined Contribution Plan

Note 10. Employee Benefit Plans

We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC and DSS. MBS maintains a profit sharing plan covering substantially all full-time employees of MBS. For all plans, we are responsible to fund the employer contributions directly. Total employee benefit expense for these plans was $44 and $73 during the 13 weeks ended July 31, 2021 and August 1, 2020, respectively.

Effective April 2020, due to the significant impact as a result of COVID-19 related campus store closures, we temporarily suspended employer matching contributions into our 401(k) plans. The matching contributions were reinstated effective July 25, 2021.

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Organization - Additional Information Person in Millions	3 Months Ended
	Jul. 31, 2021 Store Person segment
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of Stores | Store	1,429
Number of students covered to build relationships and derive sales | Person	6
Number of Reportable Segments | segment	3

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Employees Benefit Plans - Additional Information - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Company contributions, employee benefit expenses	$ 44	$ 73

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Summary of Significant Accounting Policies (Notes)

3 Months Ended

Jul. 31, 2021

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These condensed consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.

Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended July 31, 2021 are not indicative of the results expected for the 52 weeks ending April 30, 2022 (Fiscal 2022).

For certain of our retail operations, sales are generally highest in the second and third fiscal quarters, when students purchase and rent textbooks and other course materials for the typical academic year, and lowest in the first and fourth fiscal quarters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as MBS sells textbooks and other course materials for retail distribution. Our DSS segment sales and operating profit are realized relatively consistently throughout the year.

Use of Estimates

In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

Cost is determined primarily by the retail inventory method for our Retail segment and last-in first out, or “LIFO”, method for our Wholesale segment. Our textbook inventories, for Retail and Wholesale, and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories.

For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.

As contemplated by the FLC Partnership merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC and received proceeds of $41,773, and recognized a merchandise inventory loss on the sale of $10,262 in cost of goods sold during the 52 weeks ended May 1, 2021 for the Retail Segment. The final inventory sale price was determined during the first quarter of Fiscal 2022. During the 13 weeks ended July 31, 2021, we received additional proceeds of $1,906, and recognized a merchandise inventory loss on the sale of $434 in cost of goods sold for the Retail Segment.

Textbook Rental Inventories

Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.

Leases

We recognize lease assets and lease liabilities on the condensed consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases. We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. For additional information, see Note 8. Leases.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.

Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.

Revenue from the rental of physical textbooks, which contains a single performance obligation, is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.

Revenue from the rental of digital textbooks, which contains a single performance obligation, is recognized at the point of sale. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the rental term the customer is no longer able to access the content. While the digital rental allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.

We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.

For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis. Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.

Service and other revenue

Service and other revenue is primarily derived from DSS segment subscription-based service revenues and partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers.

Subscription-based revenue, which contains a single performance obligation, is deferred and recognized based on the passage of time over the subscription period commencing at the point of sale, when control of the service transfers to the customer. The majority of subscriptions sold are one month in duration.

Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

Cost of Sales

Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.

Selling and Administrative Expenses

Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting, and operating costs related to our DSS segment subscription-based services business. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services.

Evaluation of Goodwill and Other Long-Lived Assets

As of July 31, 2021, we had $0, $0 and $4,700 of goodwill on our condensed consolidated balance sheet related to our Retail, Wholesale and DSS reporting units, respectively. In accordance with ASC 350-10, Intangibles - Goodwill and Other, we complete our annual goodwill impairment test as of the first day of the third quarter of each fiscal year, or whenever events or changes in circumstances indicate that the carrying amount of the reporting unit exceeds its fair value. We completed our annual goodwill impairment test as of the first day of the third quarter of Fiscal 2021. The fair value of the DSS reporting unit was determined to exceed the carrying value of the reporting unit; therefore, no goodwill impairment was recognized.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. As of July 31, 2021, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $91,080, $289,102, $146,035, and $27,405, respectively, on our condensed consolidated balance sheet.

Our business has been significantly negatively impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning models and on-campus activities. We believe many of the negative trends impacting our results, such as fewer students returning to campus and fewer restrictions for athletic conferences, will be marginally reversed in the upcoming Fall semester. Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. We cannot accurately predict the duration or extent of the impact of the COVID-19 virus, including the Delta variant, on enrollments, university budgets, athletics and other areas that directly affect our business operations. Although most schools currently expect to return to a traditional on-campus environment for learning in the upcoming Fall semester, as well as host traditional on campus sporting activities, there is still uncertainty about the duration and extent of the impact of the COVID-19 pandemic. We believe indicators of impairment do not exist and the carrying amount of our long-lived assets and property and equipment are recoverable and the fair value of the DSS reporting unit continues to exceed the carrying value of the reporting unit resulting in no goodwill impairment during the quarter. We will continue to evaluate our other long-lived assets for indicators of impairment.

Income Taxes

As of July 31, 2021, other long-term liabilities includes $25,335 related to the long-term tax payable associated with the LIFO reserve. The LIFO reserve is impacted by changes in the consumer price index (“CPI”) and is dependent on the inventory levels at the end of our tax year (on or about January 31st) which is in the middle of our second largest selling cycle. At the end of the most recent tax year, inventory levels declined as compared to the prior year resulting in approximately $745 of the LIFO reserve becoming currently payable. Given recent trends relating to the pricing and rental of textbooks, management believes that an additional portion of the remaining long-term tax payable associated with the LIFO reserve could be payable within the next twelve months. We are unable to predict future trends for CPI and inventory levels, therefore it is difficult to project with reasonable certainty how much of this liability will become payable within the next twelve months.

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Revenue (Notes)

3 Months Ended

Jul. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 3. Revenue

Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services. See Note 2. Summary of Significant Accounting Policies for additional information related to our revenue recognition policies and Note 4. Segment Reporting for a description of each segment's product and service offerings.

Disaggregation of Revenue

The following table disaggregates the revenue associated with our major product and service offerings:

	13 weeks ended
	July 31, 2021		August 1, 2020
Retail
Product Sales (a)	$	189,058	$	141,826
Rental Income	13,024		10,804
Service and Other Revenue (b)	8,387		6,146
Retail Total Sales	$	210,469	$	158,776
Wholesale Sales	$	44,484	$	80,294
DSS Sales (c)	$	8,303	$	5,872
Eliminations (d)	$	(22,462)	$	(40,928)
Total Sales	$	240,794	$	204,014

(a)Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

(b)Service and other revenue primarily relates to brand partnerships and other service revenues.

(c)DSS sales primarily relate to direct-to-student subscription-based revenue.

(d)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

Contract Assets and Contract Liabilities

Contract assets represent the sale of goods or services to a customer before we have the right to obtain consideration from the customer. Contract assets consist of unbilled amounts at the reporting date and are transferred to accounts receivable when the rights become unconditional. Contract assets (unbilled receivables) were $0 as of July 31, 2021, August 1, 2020 and May 1, 2021 on our condensed consolidated balance sheets.

Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue). Deferred revenue consists of the following:

•advanced payments from customers related to textbook rental and subscription-based performance obligations, which are recognized ratably over the terms of the related rental or subscription periods;

•unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to our partnership marketing customers; and

•unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the e-commerce and merchandising contracts for Fanatics and FLC, respectively.

Deferred revenue of $16,028, $16,270, and $13,469 is recorded in accrued liabilities and $4,561, $0, and $4,670 is recorded in other long-term liabilities on our condensed consolidated balance sheets for the periods ended July 31, 2021,

August 1, 2020 and May 1, 2021, respectively. As of July 31, 2021, we expect to recognize $16,028 of the deferred revenue balance within the next 12 months. The following table presents changes in contract liabilities:

	13 weeks ended
	July 31, 2021		August 1, 2020
Deferred revenue at the beginning of period	$	18,139	$	13,373
Additions to deferred revenue during the period	21,857		21,411
Reductions to deferred revenue for revenue recognized during the period	(19,407)		(18,514)
Deferred revenue balance at the end of period	$	20,589	$	16,270

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Segment Reporting (Notes)

3 Months Ended

Jul. 31, 2021

Segment Reporting

Note 4. Segment Reporting

We have three reportable segments: Retail, Wholesale and DSS. Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, continue to be presented as “Corporate Services”.

We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the three segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Retail

The Retail Segment operates 1,429 college, university, and K-12 school bookstores, comprised of 784 physical bookstores and 645 virtual bookstores. Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products. The majority of the physical campus bookstores have school-branded e-commerce sites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts. The Retail Segment also offers inclusive access programs, in which course materials are offered at a reduced price through a fee charged by the institution or included in tuition, and delivered to students on or before the first day of class. Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.

Wholesale

The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country. The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 3,200 physical bookstores (including our Retail Segment's 784 physical bookstores) and sources and distributes new and used textbooks to our 645 virtual bookstores. Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores.

DSS

The Digital Student Solutions (“DSS”) Segment includes direct-to-student products and services to assist students to study more effectively and improve academic performance. The DSS Segment is comprised of the operations of Student Brands, LLC, a leading direct-to-student subscription-based writing services business, and bartleby®, a direct-to-student subscription-based offering providing textbook solutions, expert questions and answers, writing and tutoring

Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.

Intercompany Eliminations

The eliminations are primarily related to the following intercompany activities:

•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and

•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.

Our international operations are not material and the majority of the revenue and total assets are within the United States.

Summarized financial information for our reportable segments is reported below:

	13 weeks ended
	July 31, 2021		August 1, 2020
Sales:
Retail	$	210,469	$	158,776
Wholesale	44,484		80,294
DSS	8,303		5,872
Elimination	(22,462)		(40,928)
Total Sales	$	240,794	$	204,014
Gross Profit
Retail (a)	$	48,143	$	16,135
Wholesale	10,405		16,757
DSS	7,030		4,746
Elimination	(5,549)		(6,776)
Total Gross Profit	$	60,029	$	30,862
Depreciation and Amortization
Retail	$	9,407	$	10,570
Wholesale	1,300		1,295
DSS	1,899		2,165
Corporate Services	18		33
Total Depreciation and Amortization	$	12,624	$	14,063
Operating Loss
Retail	$	(31,356)	$	(54,816)
Wholesale	5,114		11,671
DSS	(1,316)		(1,455)
Corporate Services	(8,358)		(7,552)
Elimination	(5,537)		(6,763)
Total Operating Loss	$	(41,453)	$	(58,915)

	13 weeks ended
Reconciliation of segment Operating Loss to consolidated Loss Before Income Taxes:	July 31, 2021		August 1, 2020
Total Operating Loss	$	(41,453)	$	(58,915)
Interest Expense, net	2,494		2,653
Loss Before Income Taxes	$	(43,947)	$	(61,568)

(a)    For the 13 weeks ended July 13, 2021, gross margin includes a merchandise inventory loss of $434 in the Retail Segment. See Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

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Equity and Earnings Per Share (Notes)

3 Months Ended

Jul. 31, 2021

Net Earnings (Loss) Per Share

Note 5. Equity and Earnings Per Share

Equity

Share Repurchases

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50,000, in the aggregate, of our outstanding Common Stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During the 13 weeks ended July 31, 2021, we did not repurchase shares of our Common Stock under the program and as of July 31, 2021, approximately $26,669 remains available under the stock repurchase program.

During the 13 weeks ended July 31, 2021, we repurchased 130,135 shares of our Common Stock outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Earnings Per Share

Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. During the 13 weeks ended July 31, 2021 and August 2, 2020, average shares of 3,665,606 and 2,665,779 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. The following is a reconciliation of the basic and diluted earnings per share calculation:

	13 weeks ended
(shares in thousands)	July 31, 2021		August 1, 2020
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(44,346)	$	(46,652)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	51,474		48,411
Loss per share of Common Stock:
Basic	$	(0.86)	$	(0.96)
Diluted	$	(0.86)	$	(0.96)

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Fair Values of Financial Instruments (Notes)

3 Months Ended

Jul. 31, 2021

Fair Value Disclosures

Note 6. Fair Value Measurements

In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions

Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair values of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.

Non-Financial Assets

Our non-financial assets include goodwill, property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.

Non-Financial Liabilities

We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of July 31, 2021, we recorded a liability of $6,317 (Level 2 input) which is reflected in accrued liabilities ($4,173) and other long-term liabilities ($2,144) on the condensed consolidated balance sheet.

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Credit Facility (Notes)

3 Months Ended

Jul. 31, 2021

Debt Disclosure

Note 7. Credit Facility

We have a credit agreement (the “Credit Agreement”), amended March 31, 2021 and March 1, 2019, under which the lenders committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400,000 (the “Credit Facility”) effective from the date of the amendment. We have the option to request an increase in commitments under the Credit Facility of up to $100,000, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement includes an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100,000 incremental facility maintaining the maximum availability under the Credit Agreement at $500,000. On March 31, 2021, we were granted a waiver to the condition to the current draw under the FILO Facility.

For additional information including interest terms and covenant requirements related to the Credit Facility, refer to Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

During the 13 weeks ended July 31, 2021, we borrowed $71,720 and repaid $45,620 under the Credit Agreement, with $203,700 of outstanding borrowings as of July 31, 2021, comprised of $153,700 and $50,000 under the Credit Facility and FILO Facility, respectively. During the 13 weeks ended August 1, 2020, we borrowed $186,700 and repaid $126,840 under the Credit Agreement, with $234,560 of outstanding borrowings as of August 1, 2020, comprised entirely of borrowings under the Credit Facility. As of both July 31, 2021 and August 1, 2020, we have issued $4,759 in letters of credit under the Credit Facility.

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Leases (Notes)

3 Months Ended

Jul. 31, 2021

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

Note 8. Leases

We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).

We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii)

operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.

We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

The following table summarizes lease expense:

	13 weeks ended
	July 31, 2021		August 1, 2020
Variable lease expense	$	11,702	$	7,407
Operating lease expense	16,373		9,796
Net lease expense	$	28,075	$	17,203

The increase in lease expense is primarily due to higher sales for contracts based on a percentage of revenue during the 13 weeks ended July 31, 2021 and the impact of the timing and reduction of minimum contractual guarantees due to temporary store closings due to the COVID pandemic during the 13 weeks ended August 1, 2020.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of July 31, 2021:

	As of
	July 31, 2021
Remainder of Fiscal 2022	$	128,412
Fiscal 2023	49,419
Fiscal 2024	42,392
Fiscal 2025	37,372
Fiscal 2026	28,146
Thereafter	72,676
Total lease payments	358,417
Less: imputed interest	(42,940)
Operating lease liabilities at period end	$	315,477

Future lease payment obligations related to leases that were entered into, but did not commence as of July 31, 2021, were not material.

The following summarizes additional information related to our operating leases:

	As of
	July 31, 2021			August 1, 2020
Weighted average remaining lease term (in years)	5.1 years			5.4 years
Weighted average discount rate	4.3		%	4.4		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	27,378		$	16,676
ROU assets obtained in exchange for lease liabilities from initial recognition	$	67,106		$	89,167

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Supplementary Information (Notes)

3 Months Ended

Jul. 31, 2021

Supplementary info [Abstract]

Supplementary Information [Text Block]

Note 9. Supplementary Information

Restructuring and other charges

During the 13 weeks ended July 31, 2021, we recognized restructuring and other charges totaling $2,623 comprised primarily of $1,550 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($2,369 is included in accrued liabilities in the consolidated balance sheet as of July 31, 2021), $983 for professional service costs related to restructuring, process improvements, costs related to development and integration associated with the FLC Partnership, and shareholder activist activities, and $91 related to liabilities for a facility closure.

During the 13 ended August 1, 2020, we recognized restructuring and other charges totaling $5,671 comprised of $3,396 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($10,562 is included in accrued liabilities in the consolidated balance sheet as of August 1, 2020), and $2,103 for professional service costs related to restructuring, process improvements, and shareholder activities, and $172 related to liability for a facility closure.

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Stock-Based Compensation Stock-Based Compensation (Notes)

3 Months Ended

Jul. 31, 2021

Share-based Payment Arrangement [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 11. Long-Term Incentive Plan Compensation Expense

We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied.

For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:

	13 weeks ended
	July 31, 2021		August 1, 2020
Stock-based awards
Restricted stock expense	$	88	$	30
Restricted stock units expense	730		1,359
Performance share units expense	34		132
Stock option expense	270		—
Sub-total stock-based awards:	$	1,122	$	1,521
Cash settled awards
Phantom share units expense	$	2,472	$	—
Total compensation expense for long-term incentive awards	$	3,594	$	1,521

During the 13 weeks ended July 31, 2021, no awards were granted under the Equity Incentive Plan. Total unrecognized compensation cost related to unvested awards as of July 31, 2021 was $8,415 and is expected to be recognized over a weighted-average period of 2.2 years.

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Income Taxes Income Taxes (Notes)

3 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 12. Income Taxes

We recorded an income tax expense of $399 on a pre-tax loss of $(43,947) during the 13 weeks ended July 31, 2021, which represented an effective income tax rate of (0.9)% and income tax benefit of $(14,916) on a pre-tax loss of $(61,568) during the 13 weeks ended August 1, 2020, which represented an effective income tax rate of 24.2%.

In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of July 31, 2021, we determined that it was more likely than not that we would not realize certain deferred tax assets and our tax rate for the current fiscal year reflects this determination. We will continue to evaluate this position.

The effective tax rate for the 13 weeks ended July 31, 2021 is lower as compared to the prior year comparable period due to the assessment of the realization of deferred tax assets.

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Legal Proceedings (Notes)

3 Months Ended

Jul. 31, 2021

Legal Proceedings

Note 13. Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows.

Between January 22, 2020 and June 15, 2020, thirteen purported class action complaints were filed against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association, by retailers of collegiate course materials or current or former college students. Although the specific allegations vary, the plaintiffs generally claim, on their own behalf and on behalf of the purported classes, that the Company and the other defendants violated Section 1 of the Sherman Act (15 U.S.C. § 1), Section 2 of the Sherman Act (15 U.S.C. § 2), Section 13(a) of the Robinson-Patman Act (15 U.S.C. §13(a)), and various state antitrust and unfair trade practices laws for alleged activities in connection with inclusive access and the sale of course materials to universities and their students. The United States Judicial Panel on Multidistrict Litigation consolidated these and other related cases in a consolidated proceeding before the Hon. Denise L. Cote of the United States District Court for the Southern District of New York. On June 14, 2021, the Court granted defendants' motion to dismiss both cases dismissed with prejudice. Neither Plaintiff group sought to appeal those decisions. The orders dismissing the cases are now final and the matter has concluded.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jul. 31, 2021

Basis of Presentation

Basis of Presentation and Consolidation

Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These condensed consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.

Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended July 31, 2021 are not indicative of the results expected for the 52 weeks ending April 30, 2022 (Fiscal 2022).

For certain of our retail operations, sales are generally highest in the second and third fiscal quarters, when students purchase and rent textbooks and other course materials for the typical academic year, and lowest in the first and fourth fiscal quarters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as MBS sells textbooks and other course materials for retail distribution. Our DSS segment sales and operating profit are realized relatively consistently throughout the year.

Use of Estimates

Use of Estimates

In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Merchandise Inventories

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

Cost is determined primarily by the retail inventory method for our Retail segment and last-in first out, or “LIFO”, method for our Wholesale segment. Our textbook inventories, for Retail and Wholesale, and trade book inventories are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories.

For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.

As contemplated by the FLC Partnership merchandising agreement, we sold our logo and emblematic general merchandise inventory to FLC and received proceeds of $41,773, and recognized a merchandise inventory loss on the sale of $10,262 in cost of goods sold during the 52 weeks ended May 1, 2021 for the Retail Segment. The final inventory sale price was determined during the first quarter of Fiscal 2022. During the 13 weeks ended July 31, 2021, we received additional proceeds of $1,906, and recognized a merchandise inventory loss on the sale of $434 in cost of goods sold for the Retail Segment.

Textbook Rentals Inventories

Textbook Rental Inventories

Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.

Revenue Recognition

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.

Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.

Revenue from the rental of physical textbooks, which contains a single performance obligation, is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.

Revenue from the rental of digital textbooks, which contains a single performance obligation, is recognized at the point of sale. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the rental term the customer is no longer able to access the content. While the digital rental allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.

We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.

For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis. Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.

Service and other revenue

Service and other revenue is primarily derived from DSS segment subscription-based service revenues and partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers.

Subscription-based revenue, which contains a single performance obligation, is deferred and recognized based on the passage of time over the subscription period commencing at the point of sale, when control of the service transfers to the customer. The majority of subscriptions sold are one month in duration.

Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

Lessee, Leases [Policy Text Block]

We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).

We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii)

operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.

We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

Cost of Sales, Policy [Policy Text Block]

Cost of Sales

Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

Selling and Administrative Expenses

Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting, and operating costs related to our DSS segment subscription-based services business. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Evaluation of Goodwill and Other Long-Lived Assets As of July 31, 2021, we had $0, $0 and $4,700 of goodwill on our condensed consolidated balance sheet related to our Retail, Wholesale and DSS reporting units, respectively. In accordance with ASC 350-10, Intangibles - Goodwill and Other, we complete our annual goodwill impairment test as of the first day of the third quarter of each fiscal year, or whenever events or changes in circumstances indicate that the carrying amount of the reporting unit exceeds its fair value.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.

Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]

Intercompany Eliminations

The eliminations are primarily related to the following intercompany activities:

•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and

•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period. Our international operations are not material and the majority of the revenue and total assets are within the United States.

Share Repurchase [Policy Text Block]

Share Repurchases On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50,000, in the aggregate, of our outstanding Common Stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.

Fair Values of Financial Instruments

In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions

Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair values of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.

Net Earnings (Loss) Per Share

Earnings Per ShareBasic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied. For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

Income Tax, Policy [Policy Text Block]

Income Taxes

As of July 31, 2021, other long-term liabilities includes $25,335 related to the long-term tax payable associated with the LIFO reserve. The LIFO reserve is impacted by changes in the consumer price index (“CPI”) and is dependent on the inventory levels at the end of our tax year (on or about January 31st) which is in the middle of our second largest selling cycle. At the end of the most recent tax year, inventory levels declined as compared to the prior year resulting in approximately $745 of the LIFO reserve becoming currently payable. Given recent trends relating to the pricing and rental of textbooks, management believes that an additional portion of the remaining long-term tax payable associated with the LIFO reserve could be payable within the next twelve months. We are unable to predict future trends for CPI and inventory levels, therefore it is difficult to project with reasonable certainty how much of this liability will become payable within the next twelve months.

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Compensation Related Costs, Share Based Payments (Policies)	3 Months Ended
	Jul. 31, 2021
Share-based Payment Arrangement [Abstract]
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied. For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

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Revenue (Tables)

3 Months Ended

Jul. 31, 2021

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue

The following table disaggregates the revenue associated with our major product and service offerings:

	13 weeks ended
	July 31, 2021		August 1, 2020
Retail
Product Sales (a)	$	189,058	$	141,826
Rental Income	13,024		10,804
Service and Other Revenue (b)	8,387		6,146
Retail Total Sales	$	210,469	$	158,776
Wholesale Sales	$	44,484	$	80,294
DSS Sales (c)	$	8,303	$	5,872
Eliminations (d)	$	(22,462)	$	(40,928)
Total Sales	$	240,794	$	204,014

(a)Effective April 4, 2021, as contemplated by the FLC Partnership's merchandising agreement, logo and emblematic general merchandise sales were fulfilled by FLC. During the first quarter of Fiscal 2022, as contemplated by the FLC Partnership's e-commerce agreement, we began to transition certain of our e-commerce sites to Fanatics e-commerce sites for logo and emblematic products. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis in the prior year.

(b)Service and other revenue primarily relates to brand partnerships and other service revenues.

(c)DSS sales primarily relate to direct-to-student subscription-based revenue.

(d)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

Contract with Customer, Asset and Liability [Table Text Block]

The following table presents changes in contract liabilities:

	13 weeks ended
	July 31, 2021		August 1, 2020
Deferred revenue at the beginning of period	$	18,139	$	13,373
Additions to deferred revenue during the period	21,857		21,411
Reductions to deferred revenue for revenue recognized during the period	(19,407)		(18,514)
Deferred revenue balance at the end of period	$	20,589	$	16,270

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Segment Reporting Segment Reporting (Tables)

3 Months Ended

Jul. 31, 2021

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Summarized financial information for our reportable segments is reported below:

	13 weeks ended
	July 31, 2021		August 1, 2020
Sales:
Retail	$	210,469	$	158,776
Wholesale	44,484		80,294
DSS	8,303		5,872
Elimination	(22,462)		(40,928)
Total Sales	$	240,794	$	204,014
Gross Profit
Retail (a)	$	48,143	$	16,135
Wholesale	10,405		16,757
DSS	7,030		4,746
Elimination	(5,549)		(6,776)
Total Gross Profit	$	60,029	$	30,862
Depreciation and Amortization
Retail	$	9,407	$	10,570
Wholesale	1,300		1,295
DSS	1,899		2,165
Corporate Services	18		33
Total Depreciation and Amortization	$	12,624	$	14,063
Operating Loss
Retail	$	(31,356)	$	(54,816)
Wholesale	5,114		11,671
DSS	(1,316)		(1,455)
Corporate Services	(8,358)		(7,552)
Elimination	(5,537)		(6,763)
Total Operating Loss	$	(41,453)	$	(58,915)

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	13 weeks ended
Reconciliation of segment Operating Loss to consolidated Loss Before Income Taxes:	July 31, 2021		August 1, 2020
Total Operating Loss	$	(41,453)	$	(58,915)
Interest Expense, net	2,494		2,653
Loss Before Income Taxes	$	(43,947)	$	(61,568)

(a)    For the 13 weeks ended July 13, 2021, gross margin includes a merchandise inventory loss of $434 in the Retail Segment. See Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

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Net Earnings (Loss) Per Share (Tables)

3 Months Ended

Jul. 31, 2021

Reconciliation of Basic and Diluted Loss Per Share

The following is a reconciliation of the basic and diluted earnings per share calculation:

	13 weeks ended
(shares in thousands)	July 31, 2021		August 1, 2020
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(44,346)	$	(46,652)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	51,474		48,411
Loss per share of Common Stock:
Basic	$	(0.86)	$	(0.96)
Diluted	$	(0.86)	$	(0.96)

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Fair Value Measures and Disclosures (Tables)	3 Months Ended
	Jul. 31, 2021
Fair Value Disclosures [Abstract]
Fair Value Measurements, Nonrecurring

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Leases (Tables)

3 Months Ended

Jul. 31, 2021

Leases [Abstract]

Schedule of Rent Expense [Table Text Block]

The following table summarizes lease expense:

	13 weeks ended
	July 31, 2021		August 1, 2020
Variable lease expense	$	11,702	$	7,407
Operating lease expense	16,373		9,796
Net lease expense	$	28,075	$	17,203

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of July 31, 2021:

	As of
	July 31, 2021
Remainder of Fiscal 2022	$	128,412
Fiscal 2023	49,419
Fiscal 2024	42,392
Fiscal 2025	37,372
Fiscal 2026	28,146
Thereafter	72,676
Total lease payments	358,417
Less: imputed interest	(42,940)
Operating lease liabilities at period end	$	315,477

Supplemental Operating Lease Disclosures [Table Text Block]

The following summarizes additional information related to our operating leases:

	As of
	July 31, 2021			August 1, 2020
Weighted average remaining lease term (in years)	5.1 years			5.4 years
Weighted average discount rate	4.3		%	4.4		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	27,378		$	16,676
ROU assets obtained in exchange for lease liabilities from initial recognition	$	67,106		$	89,167

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Stock-Based Compensation Stock-Based Compensation (Tables)

3 Months Ended

Jul. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:

	13 weeks ended
	July 31, 2021		August 1, 2020
Stock-based awards
Restricted stock expense	$	88	$	30
Restricted stock units expense	730		1,359
Performance share units expense	34		132
Stock option expense	270		—
Sub-total stock-based awards:	$	1,122	$	1,521
Cash settled awards
Phantom share units expense	$	2,472	$	—
Total compensation expense for long-term incentive awards	$	3,594	$	1,521

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	May 01, 2021	Aug. 01, 2020
Operating Lease, Right-of-Use Asset	$ 289,102	$ 240,456	$ 320,287
Operating Lease, Liability	315,477
Goodwill	4,700	4,700	4,700
Property, Plant and Equipment, Net	91,080	89,172	94,102
Intangible Assets, Net (Excluding Goodwill)	146,035	150,904	170,466
Liabilities, Current	609,053	372,962	$ 498,105
Inventories
Proceeds from Sale of Other Assets	1,906	41,773
Gain (Loss) on Disposition of Other Assets	434	$ 10,262
Deferred Tax Asset Current [Member]
Liabilities, Noncurrent	25,335
Liabilities, Current	745
Wholesale [Member]
Goodwill	0
DSS [Member]
Goodwill	4,700
Retail Segment [Member]
Goodwill	$ 0

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	May 01, 2021	May 02, 2020
Disaggregation of Revenue [Line Items]
Revenues	$ 240,794	$ 204,014
Rental income	13,024	10,804
Contract with Customer, Asset, Net	0	0	$ 0
Deferred Revenue, Current	16,028	16,270	13,469
Deferred Revenue, Noncurrent	4,561	0	4,670
Deferred Revenue	20,589	16,270	$ 18,139	$ 13,373
Deferred Revenue, Additions	21,857	21,411
Contract with Customer, Liability, Revenue Recognized	(19,407)	(18,514)
Corporate, Non-Segment [Member]
Disaggregation of Revenue [Line Items]
Revenues	(22,462)	(40,928)
Retail Segment [Member]
Disaggregation of Revenue [Line Items]
Revenues	210,469	158,776
Rental income	13,024	10,804
Retail Segment [Member] | Retail Product [Member]
Disaggregation of Revenue [Line Items]
Revenues	189,058	141,826
Retail Segment [Member] | Service and Other [Member]
Disaggregation of Revenue [Line Items]
Revenues	8,387	6,146
Wholesale [Member]
Disaggregation of Revenue [Line Items]
Revenues	44,484	80,294
DSS [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 8,303	$ 5,872

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Segment Reporting Segment Reporting (Details) $ in Thousands	3 Months Ended
	Jul. 31, 2021 USD ($) Store segment	May 01, 2021 USD ($)	Aug. 01, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments | segment	3
Number of Stores | Store	1,429
Revenues	$ 240,794		$ 204,014
Gross Profit	60,029		30,862
Depreciation and amortization expense	12,624		14,063
Operating Income (Loss)	(41,453)		(58,915)
Interest expense, net	2,494		2,653
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	(43,947)		(61,568)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(22,462)		(40,928)
Gross Profit	(5,549)		(6,776)
Operating Income (Loss)	(5,537)		(6,763)
Inventories
Segment Reporting Information [Line Items]
Gain (Loss) on Disposition of Other Assets	434	$ 10,262
Retail Segment [Member]
Segment Reporting Information [Line Items]
Revenues	210,469		158,776
Gross Profit	48,143		16,135
Depreciation and amortization expense	9,407		10,570
Operating Income (Loss)	$ (31,356)		(54,816)
Wholesale [Member]
Segment Reporting Information [Line Items]
Number of Wholesale Customers | Store	3,200
Number of System Customers | Store	400
Revenues	$ 44,484		80,294
Gross Profit	10,405		16,757
Depreciation and amortization expense	1,300		1,295
Operating Income (Loss)	5,114		11,671
DSS [Member]
Segment Reporting Information [Line Items]
Revenues	8,303		5,872
Gross Profit	7,030		4,746
Depreciation and amortization expense	1,899		2,165
Operating Income (Loss)	(1,316)		(1,455)
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Revenues	(22,462)		(40,928)
Depreciation and amortization expense	18		33
Operating Income (Loss)	$ (8,358)		$ (7,552)
Physical Stores [Member]
Segment Reporting Information [Line Items]
Number of Stores | Store	784
Virtual Stores [Member]
Segment Reporting Information [Line Items]
Number of Stores | Store	645

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Net Earnings (Loss) Per Share - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	Dec. 14, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Repurchase Program, Authorized Amount			$ 50,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 26,669
Shares Paid for Tax Withholding for Share Based Compensation	130,135
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,665,606	2,665,779
Net Income (Loss) Attributable to Parent	$ (44,346)	$ (46,652)
Weighted Average Number of Shares Outstanding, Basic	51,474,000	48,411,000
Earnings Per Share, Basic	$ (0.86)	$ (0.96)
Earnings Per Share, Diluted	$ (0.86)	$ (0.96)
Weighted Average Number of Shares Outstanding, Basic and Diluted	51,474,000	48,411,000
Net Income (Loss) Available to Common Stockholders, Basic	$ (44,346)	$ (46,652)
Weighted Average Number of Shares Outstanding, Diluted	51,474,000	48,411,000
Net Income (Loss) Available to Common Stockholders, Diluted	$ (44,346)	$ (46,652)

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Fair Values of Financial Instruments Fair Values of Financial Instruments (Details) - Phantom Share Units (PSUs) $ in Thousands	Jul. 31, 2021 USD ($)
Fair Value Disclosures [Abstract]
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent	$ 2,144
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent	6,317
Other Deferred Compensation Arrangements, Liability, Current	4,173
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Deferred Compensation Arrangements, Liability, Current	4,173
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent	$ 2,144

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Credit Facility - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	May 01, 2021
Line of Credit Facility [Line Items]
Line Of Credit Potential Increase Amount	$ 100,000
Proceeds from Lines of Credit	71,720	$ 186,700
Repayments of Lines of Credit	45,620	126,840
Long-term Line of Credit, Noncurrent	153,700	234,560	$ 127,600
Short-term Debt	50,000	0	$ 50,000
Letters of Credit Outstanding, Amount	4,759	4,759
Debt, Long-term and Short-term, Combined Amount	203,700	$ 234,560
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 500,000
New Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit Facility Maturity Term	5 years
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000
FILO [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000

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Leases Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	5 years 1 month 6 days	5 years 4 months 24 days
Variable Lease, Cost	$ 11,702	$ 7,407
Lease, Cost	16,373	9,796
Operating Lease, Expense	28,075	$ 17,203
Lessee, Operating Lease, Liability, Payments, Due Year Two	49,419
Lessee, Operating Lease, Liability, Payments, Due Year Three	42,392
Lessee, Operating Lease, Liability, Payments, Due Year Four	37,372
Lessee, Operating Lease, Liability, Payments, Due Year Five	28,146
Lessee, Operating Lease, Liability, Payments, Due after Year Five	72,676
Lessee, Operating Lease, Liability, Payments, Due	358,417
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	42,940
Operating Lease, Liability	$ 315,477
Operating Lease, Weighted Average Discount Rate, Percent	4.30%	4.40%
Operating Lease, Payments	$ 27,378	$ 16,676
ROU Asst Obtained in Exchange for Lease Liabilites	67,106	$ 89,167
Lessee, Operating Lease, Liability, to be Paid, Year One	$ 128,412

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Supplementary Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Restructuring and other charges	$ 2,623	$ 5,671
Employee Severance [Member]
Restructuring and other charges	1,550	3,396
Other Restructuring [Member]
Restructuring and other charges	983	2,103
Facility Closing [Member]
Restructuring and other charges	91	172
Employee Severance [Member]
Accrued Salaries	$ 2,369	$ 10,562

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Stock-Based Compensation Stock-Based Compensation (Details) - USD ($)	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 1,122,000	$ 1,521,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 8,415,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 2 months 12 days
Phantom Share Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent	$ 6,317,000
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	1,122,000	1,521,000
us-gaap_LongTermIncentivePlanCompensation [Line Items]	3,594,000	1,521,000
Selling, General and Administrative Expenses [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	88,000	30,000
Selling, General and Administrative Expenses [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	730,000	1,359,000
Selling, General and Administrative Expenses [Member] | Performance Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	34,000	132,000
Selling, General and Administrative Expenses [Member] | Equity Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	270,000	0
Selling, General and Administrative Expenses [Member] | Phantom Share Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 2,472,000	$ 0

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Income Taxes Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 399	$ (14,916)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ (43,947)	$ (61,568)
Effective Income Tax Rate Reconciliation, Percent	(0.90%)	24.20%