Why Barnes & Noble Education Stock Jumped 20% Today
Key Points
Barnes & Noble Education stock jumped nearly 20% after a mixed preliminary earnings report and a surprising dividend announcement
The First Day Complete program bundles course materials into tuition and has grown from 14,000 students in 2019 to a projected 1.4 million this fall.
The stock has rallied 128% from November lows but remains cheaply valued at 0.3x trailing sales.
Shares of Barnes & Noble Education (NYSE: BNED) closed Thursday's trading 19.7% higher thanks to a mixed preliminary earnings report for Q4 2026. The stock is now up 128% from a deep dip last November, but it has only gained 14% over the last year.
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A mixed earnings bag with a silver lining
The analyst consensus pointed to roughly $295 million in Q4 revenues with an adjusted net loss near $0.16 per share. Based on preliminary figures, Barnes & Noble Education expects approximately $263 million in top-line sales, down from $278.3 million in the year-ago period. On the bottom line, however, the quarter is shaping up to adjusted profits of at least $0.05 per share.
So the quarter was a mixed bag, but the board of directors still saw it fit to start the dividend program. The first payout will be sent on July 30, at $0.08 per share. That works out to an annual yield of 2.4% if the company maintains the payout over the next four quarters.
More than a bookstore, or so management claims
The dividend news dropped during an Investor Day where CEO Jonathan Shar made one thing abundantly clear: Barnes & Noble Education would really prefer you stop thinking of it as "just a bookstore." The company now calls itself a "scaled B2B2C platform," which is corporate-speak for "we do a lot more than sell textbooks now."
The centerpiece is First Day Complete, a program that bundles course materials into college tuition rather than asking for payment at the bookstore's register. It started with 14,000 students in 2019 and should reach 1.4 million by this fall. Management says only 36% of eligible campuses have converted so far, leaving plenty of room to grow.
Whether that growth trajectory justifies the 128% rally from recent lows is another question entirely. Even now, the stock remains priced for absolute disaster at 0.3x trailing sales. I like the First Day Complete program, but the dividend announcement looks rushed. The company could find better uses for the dividend cash, such as paying down debt or expanding the First Day Complete program to more campuses.
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.