In an earnings call early Wednesday, August 23, 2018, Barnes & Noble Education Inc. (NYSE:BNED) released the details of a disappointing second quarter to the year. In recent years, we have seen many major retail brands begin to struggle and lose sales to the growing e-commerce market with huge providers such as Amazon. Brick-and-mortar based companies such as Barnes & Noble must make drastic changes in their operations to effectively compete with the likes of Amazon and Chegg.
BNED shares have dropped to lows of 15% upon the news of a weak second quarter. Specifically, net loss has grown to $38.6 million compared to $34.8 million year-over-year. Sales also fell 5.1% or $337.5 million.
Barnes & Noble have been in business since 1873, but recently split their operations between the retail and college market, forming Barnes & Noble Education Inc. which they took public. The idea of splitting operations and going public with Barnes & Noble Education was sparked by their already leading stance in the university book store market. Max J Roberts, former CEO stated that the company is the current leader for university book stores with “724 campus stores serving colleges and universities and more than 5 million students and their faculty across the country.” Roberts also stated that by forming a separate company, the company will now be “positioned to take advantage of future growth opportunities and enhance our services for our current and future customers.”
The company has attempted to compete with the emerging e-commerce market with products such as the Nook, but were not able to see the same success as their competitors. In hopes to try and compete, Barnes & Noble has acquired PaperRater.com which is a tool used by college students for research paper help. It is stated that PaperRater has processed more than 18 million submissions since 2009.