BNED 10-K & 10-Q changes, risk factors and insider trading

We operate within a competitive and rapidly changing business environment, in general, and each of our lines of business faces competition for the products and services they offer. We face competition from other college bookstore operators and educational content providers, including Follett Corporation, eCampus, University Gear Shop, ValorValore Campus, Textbook Brokers, Slingshot, and BibliU. Our online/virtual course material store operations also face competition from providers including eCampus, Akademos, and Ambassador Educational Solutions. We also face competition from other third-party sellers and local bookstores, as well as direct-to-student platforms including, Amazon, bn.com, the e-commerce platform of Barnes & Noble, Inc.; Chegg.com, an online textbook rental company; and publishers, including Cengage Learning, Pearson Education and McGraw-Hill Education, which bypass the traditional retail distribution channel by selling directly to students and institutions. We face competition from e-Textbook/digital content providers, VitalSource Technologies, Inc., and Red-Shelf. Our wholesale business competes with Amazon, GoTextbooks, and Texas Book Company. Competitors that compete with our general merchandise offerings include Amazon, Sodexo and Aramark, online retailers, physical and online office supply stores and local and national retailers that offer college-themed and other general merchandise. Students often purchase from multiple textbook providers, are highly price sensitive, and can easily shift spending from one provider or format to another. As a consequence, in addition to being competitive in the services we provide to our customers, our textbook business faces significant price competition. Some of our competitors have adopted, and may continue to adopt, aggressive pricing policies and devote substantial resources to marketing, website and systems development. In addition, a variety of business models are being pursued for the provision of print and digital textbooks, some of which may be more profitable or successful than our business model, including our BNC First Day® affordable access course material models. Furthermore, the market for course materials is diluted from counterfeiting and piracy of digital and print copies or illegal copies of selected chapters made by students or others; user-generated and faculty-created content; and sharing or non-purchase of required course materials by students.

Our wholesale business is a national distributor for rental textbooks offered through McGraw-Hill EducationsEducation's consignment rental program (which includes approximately 1,2921,428 titles) and Pearson Education’s consignment rental program (which includes approximately 9981,077 titles). Through its centrally located, advanced distribution center, our wholesale business offers the seamless integration of these consignment rental programs and centralized administration and distribution to approximately 1,3331,268 stores, including our retail stores. These consignment rental programs are available to our wholesale customers, including institutionally run and contract-managed campus bookstores, as well as our physical and virtual bookstores.

Many of our products are sourced and manufactured abroad. The Trump administration announced a series of tariffs throughout 2025 and 2026 on mostmany products originating from countries worldwide, including potential higher tariffs on most products of Chinese origin. The Trump administration has since reduced or temporarily paused some of the tariffs and has reached agreement on tariffs with certain countries. We cannot predict whether such reductions will remain in place or pauses will be extended, whether the Trump administration will continue to increase tariffs, or whether the Trump administration will enter into agreements with other countries to reduce tariffs. If these or other incremental tariffs go into effect, it could have a material adverse effect on our business, financial condition and results of operations.

In response to our changing business environment and to adapt to industry trends, we are focused on offering course materials sales through our affordable access First Day Complete and First Day models to meet the market demands of reducing costs to students and contributing to improved student outcomes, while increasing our market share, revenue and relative gross profits of course materials sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted. We are moving quicklyplan to accelerate our First Day Complete strategy. Many institutions adopted First Day Complete in Fiscal 2025, and we continue to scale the number of schools adopting First Day Complete. We cannot guarantee that we will be able to achieve these plans within these timeframes or at all. While we believe we have the capital resources, experience, management resources and internal systems to successfully implement our BNC First Day® affordable access models across our client portfolio, we may not be successful in implementing this strategy. The implementation of this strategy is a complex process and relies on leveraging our services and relationships to help accelerate the adoption of our First Day Complete strategy. The success of our future operating results will be dependent upon customer adoption of BNC First Day® affordable access models and our ability to scale our business to meet customer demand appropriately. If colleges and universities, faculty and students are not receptive to our BNC First Day® affordable access models or these models do not meet the expectations of these constituencies, there could be a negative impact on the implementation of our strategy. To successfully execute this strategy, we need to continue to further evolve the focus of our organization towards the delivery of cost effective and unique solutions for our customers. Any failure to successfully execute this strategy could adversely affect our operating results.

•In the absence of a federal comprehensive data privacy law, 2022 U.S. states have enacted comprehensive consumer privacy laws as of May 3,2, 2025,2026, including California with the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020, with enforcement commencing on July 1, 2020. CCPA, as amended, provides California consumers the right to know what personal data companies collect, how it is used, and the right to access, delete and opt out of sale of their personal information to third parties. It also expands the definition of personal information and gives consumers increased privacy rights and protections for that information. The California Privacy Rights Act (“CPRA”) took effect on December 16, 2020, and became fully operative on January 1, 2023. CPRA amends and adds to CCPA by strengthening rights of California consumers, further restricting business use of consumer personal information, and establishing a new government agency for enforcement. Other states enacting comprehensive consumer privacy laws include Alabama, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia.

In 2025, thereThere have been numerous recent actions and proposals by the federal government that have created uncertainty for public and private college institutions, as well as their students. Should any of these actions and policies move forward they, or even the threat of these actions, could negatively impact student enrollment at U.S. colleges and universities, decrease operating budgets, and adversely affect our business and operating results and financial condition. Among these proposed or actual policies are:

•Restrictions on issuances of student visas, and deportation of foreign students. In 2025,2026, therewe have beencontinued to witness high profile instances of students with traditionally protective immigration status being arrested, deported, or having their student visas revoked. There have also been proposals to expand the scope of bans on visa issuances. In addition, an executive order wasissued recentlyin issuedlate 2025 that bans travelers from 19 countries from entering the U.S. and partial bans apply with respect to 20 other countries. Changes in U.S. immigration regulations or other laws, practices and frequency or methods of enforcement which discourage immigration or international study could adversely affect our future growth. Reduced or disrupted international study patterns are likely to reduce enrollment and harm our operating results.

We have concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of May 3,2, 20252026 due to material weaknesses, which hascould adversely affectedaffect our ability to report our financial results in a timely and accurate manner and could have a material adverse impact on our business and financial condition.

We are required to evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on a periodic basis and publicly disclose the results of these evaluations and related matters in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. As described in Part II - Item 9A. Controls and Procedures of this Annual Report on Form 10-K, weour haveremediation identifiedof material weaknesses in internal controls over financial reporting.reporting first identified in connection with the audit of our Fiscal 2025 financial results have not yet been fully completed or tested by us and our independent auditors, and therefore, remain outstanding. As a result of these material weaknesses, our management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of May 3,2, 2025.2026.

We arehave engaged in developingdeveloped and implementingimplemented aour remediation plan, as described in Part II - Item 9A. Controls and Procedures of this Form 10-K, designed to address the material weaknesses, but our remediation efforts are not complete and are ongoing.ongoing, and must be tested by us before such weaknesses can be deemed to no longer exist. Although we are workingcontinue to remedy the ineffectiveness of the Company’s internal control over financial reporting, there can be no assurance as to when the remediation plan will be fully developed, when it will be fully implemented, or the aggregate cost of implementation. Until our remediation plan is fully implemented,implemented; our management will continue to devote time and attention to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that we will be unable to timely file future periodic reports with the SEC and that our future consolidated financial statements could contain errors that will be undetected. If we are unable to report our results in a timely and accurate manner, our stock may be delisted from the New York Stock Exchange (the “NYSE”) and we will not be able to comply with the applicable covenants in our financing arrangements, including our credit agreement, as described in Risks Related to our Business and Industry, “We are dependent upon access to the capital markets, bank credit facilities and short-term vendor financing for liquidity needs.” In addition, we could be subject to regulatory investigations and penalties or stockholder litigation. Any of these risks could have a material adverse impact on our business and financial condition.

We have incurred, and may continue to incur, significant expenses related to legal, accounting and other professional services in connection with matters relating to or arising from the subject of the Investigation in fiscal years 2025 and 2026.Restatement. To the extent steps we take to remediate deficiencies in our internal controls over financial reporting are not successfully identified and implemented, we may incur significant additional time and expense.

We arehave undertakingtaken and continue to take significant efforts to remediate material weaknesses in our internal control over financial reporting and to enhance our disclosure controls and procedures. These efforts have required and will continue to require significant management time and financial resources. We may incur substantial costs in connection with these remediation activities, including consulting fees, audit and professional service fees, and upgrades to our financial reporting systems and controls.controls and internal control processes. These additional expenses could materially adversely affect our results of operations and financial condition.

Our past failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital, may impact our ability to obtain alternative financing, and could have negative consequences under the terms of our existing credit agreements.

OurAs failurea result of matters arising from the Investigation and Restatement, we were unable to timely file our periodicAnnual Report on Form 10-K for Fiscal 2025 and certain Quarterly Reports on Form 10-Q. Although we have since filed those reports and are currently in compliance with theour SEC restrictsreporting obligations, our prior untimely filings continue to restrict our ability to use a registration statement on Form S-3, which limits our ability to access the public markets quickly and efficiently. It may also restrict our ability to raise capital through traditional private placements, as potential investors may be reluctant to invest in a company that is not current or has a history of not being current in its SEC filings. In addition, our past failure to file periodic reports could constitute a default under certain covenants in existing or future credit facilities, which could lead to the acceleration of outstanding indebtedness or other adverse consequences. The combined effect of these factors could materially and adversely affect our liquidity, financial condition, and results of operations.

ThreeTwo of our stockholders collectively own close to a majority of the Company’s outstanding shares, and their interests could differ from the interests of our other stockholders.

As of May 3,2, 2025,2026, Immersion Corporation (“Immersion”), VitalSource, and Fanatics, respectively,VitalSource own 32.9%, 9.5%32.9% and 4.9%,9.5%, respectively, of the Company’s outstanding shares of Common Stock.

Based on the foregoing, Immersion, VitalSourceImmersion and FanaticsVitalSource have considerable influence or effective control regarding the outcome of any transaction or action that requires stockholder approval, including the election of our Board of Directors, mergers, acquisitions, amendments to our charter and various corporate governance actions.

Our Board of Directors is composed of sevensix members, fourthree of whom are members of the Board of Directors of Immersion Corporation, two of whom are also executives of Immersion Corporation. Immersion has agreed to maintain at least three directors on our Board of Directors that satisfy the independence standard under NYSE rules applicable to audit committee members. However, Immersion through its stock ownership may have significant influence over the election of all Board members, inclusive of the independent directors.

Each of Immersion, VitalSourceImmersion and FanaticsVitalSource may have interests different than those of other stockholders. For example, they may delay or prevent a change of control of us, even if such a change of control would benefit other stockholders, or pursue strategies that are different from the wishes of other investors. The significant concentration of stock ownership may adversely affect the trading price of our Common Stock due to investors’ perception that conflicts of interest may exist or arise.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2026” means the 52 weeks ended May 2, 2026, “Fiscal 2025” means the 53 weeks ended May 3, 2025, “Fiscal 2024” means the 52 weeks ended April 27, 2024.2025.

The following should be read in conjunction with "Explanatory Note", "Disclosures Regarding Forward-Looking Statements" and our consolidated financial statements and notes thereto included in Item 15 of this Annual Report on Form 10-K (this “Form 10-K”).

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 and inventory management hardware and software providers. We operate 1,1461,116 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment. The Barnes & Noble brand (licensed from our former parent) and our subsidiary brands, BNC and MBS, are important to our relationships with leading publishers who rely on us as one of their primary distribution channels. For a detailed description of our business, products and services, strategic initiatives, key relationships, and competitive position, see “Business” in Part I, Item 1 of this Form 10-K.

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 provide product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer our BNC First Day® affordable access course material programs, consisting of First Day Complete and First Day, which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition. During the 5352 weeks ended May 3,2, 2025,2026, BNC First Day® total revenue increased by $119.9$166.3 million, or 25.3%,28.0%, to $593.8$760.1 million compared to $473.9$593.8 million during the prior year period. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results. In Fiscal 2025,2026, the growth of our BNC First Day® programs offset the declines in a la carte courseware sales and closed store sales. We are moving quicklycontinue to acceleratesee ourstrong institutional interest in First Day Complete strategy. Many institutions adoptedand First Day Completeprograms, inreflecting Fiscalan 2025,ongoing shift by colleges and weuniversities continuetoward affordable access course material models that increase student participation and improve access to scalerequired thecourse number of schools adopting First Day Complete.materials.

The following table summarizes our BNC First Day® sales for the 52 weeks ended May 2, 2026 and the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024:

On June 10, 2024, we completed various transactions (the "“Transactions"”), including an equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, to substantially deleverage our Consolidated Balance Sheet. TheseFor Transactionsa raiseddetailed additional capital for repaymentdescription of indebtednessthese transactions, see “Financing Arrangements” in Part I, Item 1, Business and provideNote additional10, flexibilityDebt, forin workingthe capital needs, which will also allow usNotes to strategicallyConsolidated investFinancial in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program. Upon closing of the Transactions on June 10, 2024:Statements.

For a discussion of our trends and other factors affecting our business, see Part I - Item 1. Business.Business and Item 1A, Risk Factors.

Our 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 cost of sales primarily includes costs such as merchandise costs, textbook rental 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.

Results of Operations Summary - Continuing Operations (a)

For a detailed discussion of Fiscal 20252026 and year-over-year comparison to Fiscal 2024,2025, see Results of Operations - Continuing Operations - 53 weeks ended May 3, 2025, compared with the 52 weeks ended April 27, 2024, below.

(a)Adjusted Net Lossincome -Continuing Operations(loss) and Adjusted EBITDA - Continuing Operations are non-GAAP financial measures. See Use of Non-GAAP Measures.

Results of Operations - Continuing52 Operationsweeks -ended May 2, 2026, compared with the 53 weeks ended May 3, 2025, compared with the 52 weeks ended April 27, 20242025

Our total sales increased by $43.0$104.6 million, or 2.7%,6.5%, to $1,714.8 million during the 52 weeks ended May 2, 2026 from $1,610.2 million during the 53 weeks ended May 3, 2025 from $1,567.1 million during the 52 weeks ended April 27, 2024 which is primarily related to improved compcomparable store sales driven by growth in our BNC First Day® programs and generalnew merchandisestore sales, offset by declines in general merchandise sales, a la carte course material sales and lower sales as a result of closed stores. The components of the sales variances for the 53 weeks ended versus 52-week period are reflected in the table below.

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

During the 5352 weeks ended May 3,2, 2025,2026, we opened 5664 stores that contributed approximately $100.0 million of sales in Fiscal 2026, and closed 15594 physical and virtual stores,stores withthat had estimated net annual sales of $(53.5)$69.0 million. The Company’s strategic initiative is to close under-performing and less profitable stores.

◦Course material product sales increased by $49.5$107.3 million, or 5.1%,10.5%, to $1,021.5$1,128.8 million during the 5352 weeks ended May 3,2, 2025,2026, compared to $972.0$1,021.5 million in the prior year period. The increase was primarily due to the growth of our BNC First Day® programs, which increased by $119.9$166.3 million, or 25.3%,28.0%, to $593.8$760.1 million, and new store sales, offset by a decline in a la carte courseware sales,sales and including lower sales resulting from closed stores.

◦ServiceGeneral andmerchandise otherproduct revenuenet decreasedsales increased by $7.9$2.8 million, or 8.4%,0.8%, to $86.5$358.1 million, compared to $94.4$355.3 million in the prior year period, primarily due to higher othergraduation income for non-return rental penalty fees, offset by lower partnership marketingproduct and marketplacecafe and convenience product sales.

•Rental income for course materials increased by $10.2$3.5 million, or 7.5%,2.4%, to $150.4 million during the 52 weeks ended May 2, 2026 from $146.9 million during the 53 weeks ended May 3, 2025 from $136.7 million during the 52 weeks ended April 27, 2024,2025, primarily due to the growth of our BNC First Day® programs, partially offset by closed stores and the shift to digital products.

Gross Comparable Store Sales increased by $117.2$71.3 million or 7.5%4.4% during the 5352 weeks ended May 3,2, 2025.2026, primarily driven by an increase in Course Materials sales, partially offset by lower General Merchandise sales. Course Materials sales increased by $106.7$82.3 million or 10.6%7.6% primarily due to the growth of BNC First Day® affordable access course material programs (as discussed above), offset by declines in a la carte courseware sales. The increase in general merchandise sales are primarily related to higher graduation and supplies product sales and cafe and convenience product sales, with logo product sales remaining flat, offset by lower trade books.

Gross Comparable Store Sales variances by category for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024 are as follows:

Our cost of sales increaseddecreased as a percentage of sales to 78.6% during the 52 weeks ended May 2, 2026 compared to 79.0% during the 53 weeks ended May 3, 20252025. comparedOur gross margin increased by $28.4 million, or 8.4%, to 78.0%$366.2 million, or 21.4% of sales, during the 52 weeks ended AprilMay 27,2, 2024.2026 Our gross margin decreased by $7.1 million, or (2.1)%, tofrom $337.8 million, or 21.0% of sales, during the 53 weeks ended May 3, 2025 from $344.9 million, or 22.0% of sales, during the 52 weeks ended April 27, 2024.2025.

The following table summarizes the cost of sales for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024:

The following table summarizes the gross margin for the 5352 and 52 weeks53weeks ended May 2, 2026 and May 3, 2025 and April 27, 2024:

There have been no material changes, during the 13 weeks ended JanuaryAugust 31,1, 2026 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 3, 2025.10-K.

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.

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 provide product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer our BNC First Day® affordable access course material programs, consisting of First Day® Complete and First Day,Day®, which provide faculty-required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results. We are moving quicklycontinue to acceleratesee ourstrong BNCinstitutional interest in First Day® programsComplete strategy. Institutions continued to adopt BNCand First Day® programsprograms, duringreflecting thean firstongoing threeshift quartersby ofcolleges Fiscaland 2026.universities toward affordable access course material models that increase student participation and improve access to required course materials.

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 3, 2025 filed with the SEC on December 23, 2025.10-K.

We provide product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer our BNC First Day® affordable access course material programs, consisting of First Day® Complete and First Day,Day®, which provide faculty-required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

•First Day® Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials. The First Day® Complete model drives substantially greater unit sales and sell-through for the bookstore.

•First Day® is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system (“LMS”).

Offering course materials through our affordable access, First Day® Complete and First Day® models is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results. We are moving quickly to accelerate our BNC First Day® programs strategy. Institutions continued to adopt BNC First Day® programs during the first three quartersquarter of Fiscal2027, 2026.and we continue to expand participation across our partner schools. Part of our strategy involves encouraging existing schools that have adopted our First Day® program, to transition to our First Day® Complete model, which may from time-to-time result in a reduction of First Day® sales over prior periods.

Our business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. The Company'sOur quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in itsour fiscal calendar dates. DuringThese shifts in timing may affect the current fiscal year, the Company experienced a modest increase in the numbercomparability of academicour startresults periodsacross occurring in the 13 and 39 weeks ended January 31, 2026, compared to the prior year, primarily due to differences in the fiscal calendar week alignment year over year.periods.

Product sales are 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. Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized upon delivery of the digital content as product revenue in our condensed consolidated financial statements. Revenue from the rental of physical textbooks 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 and is recognized as rental income in our condensed consolidated financial statements. Rental revenue and margin dollars deferral from third fiscal quarter is higher compared to prior year due to the growth of the BNC First Day® programs. Depending on the product mix offered under the BNC First Day® offerings, revenue recognized is consistent with our policies for product, digital and rental sales, net of an anticipated opt-out or return provision.

•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 customers. In the Spring and Fall of 2025,2025 and Spring of 2026, we observed increased year-over-year enrollment trends. Enrollment trends, specifically at community colleges, generallyhistorically correlatehave correlated 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. Additionally, enrollment trends are impacted by the dip in the United States birth rate resulting in fewer students at the traditional 18 to 24 year-old college age. Online degree program enrollments continue to grow, which impacts the level of in-store traffic for general merchandise sales, just as for cafe and convenience products.

•Regulatory Trends: In 2025, numerousNumerous actions and proposals by the federal government have created uncertainty for public and private college institutions, as well as their students. These actions and proposals include: restrictions on issuances of student visas, deportation of foreign students; reduced federal funding for colleges and universities; and reductions to, or the elimination of, student loan programs and potentially the elimination of the U.S. Department of Education itself. Should any of these actions and policies move forward, they, or even the threat of these actions continue, could negatively impact student enrollment at U.S. colleges and universities, decrease operating budgets, and adversely affect our business and operating results and financial condition.

•Increased Use of Open Educational Resources (“OER”), Online and Digital Platforms as Companions or Alternatives to Traditional Course Materials, Including Artificial Intelligence (“AI”) Technologies. 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.platforms, including the increased availability of OER, the creation of which has been facilitated through the use of AI.

•Suppliers, Supply Chain and Inventory. The products that we sell originate from a wide variety of domestic and international vendors. Since the demand for used textbooks has historically been greater than the available supply, our financial results are highly dependent upon our wholesale business'business's ability to build its textbook inventory from suppliers in advance of the selling season. Some textbook publishers have begun to supply textbooks pursuant to consignment or rental programs which could impact used textbook supplies in the future. Additionally, our wholesale business is a national distributor for rental textbooks offered through McGraw-Hill Education's and Pearson Education’s consignment rental program. We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content or services, particular payment terms or the extension of credit limits. If our current suppliers were to stop selling merchandise, content or services to us on acceptable terms, including as a result of one or more supplier bankruptcies due to poor economic conditions or refusal by such suppliers to ship products to us due to delayed or extended payment windows as a result of our own liquidity constraints, we may be unable to procure the same merchandise, content or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all. Additionally, delayed or incomplete publisher shipments of physical textbook orders, or delays in receiving digital courseware access codes, could have an adverse impact on sales, including our BNC First Day® Complete affordable access course material program, which relies upon timely receipt of inventory in advance of class start dates each academic term. The broader macro-economic global supply chain issues may also impact our ability to source school supplies and general merchandise sold in our campus bookstores, including technology-related products and emblematic clothing.

•First Day® Complete and First Day® Models. Offering course materials sales through our affordable access, First Day® Complete and First Day® models is a key, and increasingly important, strategic initiative of ours to meet the market demands of substantially reduced pricing to students. Our First Day® Complete and First Day programs contribute to improved student outcomes, while increasing our market share, revenue and relative gross profits of course materials sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines as the growth of our BNC First Day® programs offsets declines in a la carte courseware sales and closed store sales. We continue to move quickly to accelerate our First Day® Complete and First Day® strategy. Institutions continued to adopt our BNC First Day® programs during the threefirst quartersquarter of Fiscalfiscal 2026. We cannot guarantee that we will be able to achieve these plans within these timeframes or at all.2027.

•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 non-essential bookstores we operate may close, as we focus on the profitability of our stores. We are moving quickly and decisively to accelerateencourage new and existing accounts to adopt our First Day® Complete strategy.programs.

For additional discussion of our trends and other factors affecting the Company's business, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended May 3, 2025.10-K.

Our cost of sales primarily includes costs such as merchandise costs, textbook rental 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.

Our selling and administrative expenses consist primarily of store payroll and storeoverhead operatingpayroll, expenses.including long-term incentive plan compensation. Selling and administrative expenses also include long-termdirect incentiveexpenses planto compensationsupport expensethe and general office expenses, such asstores, merchandising, procurement, and field support, andconsisting of information technology, professional services.services and travel.

(a)Adjusted net income (loss) and Adjusted EBITDA are non-GAAP financial measures. See Use of Non-GAAP Measures discussion below.

Results of Operations - 13 and 39 weeks ended JanuaryAugust 31,1, 2026 compared with the 13 and 39 weeks ended JanuaryAugust 25,2, 2025

ForFirst thequarter 13fiscal weeksyear ended January 31, 20262027 revenue increased by 11.3%,0.8%, or $52.3$2.4 million, from last year to $515.1$290.6 million, primarily driven by growth in our BNC First Day® programsprograms, partially offset by the net impact of new and aclosed net increase in physical and virtual locations.stores. Gross Comparable Store Sales increased by $33.8$10.7 millionmillion, or 7.2%,3.7%, during the quarter, drivenincluding bya revenues$10.3 frommillion, or 9.0% increase in BNC First Day® programsprogram whichsales. increasedNet loss improved by $71.3$5.4 million, or 32.1%. Net income decreased by $11.3 million, or 62.9%29.3%, to $6.7$(12.9) million, compared towith $17.9$(18.3) million in the priorprior-year year.period. Adjusted EBITDA decreasedimproved by $1.2$2.2 million, or 4.7%,18.9%, to $23.6$(9.3) million from $24.8$(11.5) million last year, in part due to a decrease in gross margins that is a result of certain timing differences in revenue recognition during the spring rush selling season, as well as investigation costs and other expense incurred in the currentprior-year period.period, reflecting higher gross profit and lower operating expenses.

The following table summarizes our sales for the 13 and 39 weeks ended JanuaryAugust 31,1, 2026 and JanuaryAugust 25,2, 2025:

Generally, sales are impacted by revenue fromthe net impact of new/ and closed stores, conversion to BNC First Day® programs, increased campus traffic, and an increase in the number and timing of on campuson-campus activities and events, such as graduations, athletic events, alumni events, merchandising and marketing programs, and prospective student campus tours.

Our total sales increased by $52.3$2.4 million, or 11.3%,0.8%, to $515.1$290.6 million during the 13 weeks ended JanuaryAugust 31,1, 2026 from $462.8$288.2 million during the 13 weeks ended JanuaryAugust 25,2, 2025.

•Product sales and other increased by $52.2$2.7 million, or 12.4%,1.0%, to $471.8$276.9 million during the 13 weeks ended JanuaryAugust 31,1, 2026 from $419.7$274.2 million during the 13 weeks ended JanuaryAugust 25,2, 2025.

◦Course material product sales increased by $53.5$2.2 million, or 17.6%,1.3%, to $357.8$180.4 million during the 13 weeks ended JanuaryAugust 31,1, 2026, compared towith $304.2$178.2 million in the prior yearprior-year period. The increase was primarily related to higher comparable store sales and new store salessales, primarily due to organic growth in our BNC First Day® programs, which increased by $71.3 million, or 32.1%, to $293.6 million,partially offset by lowerthe salesnet resultingimpact fromof new and closed stores.

◦General merchandise product net sales decreasedincreased by $(2.2)$1.6 million, or (2.2)%,2.1%, to $95.1$76.0 million, compared towith $97.3$74.4 million in the prior yearprior-year period, primarily due to higher supply and graduation product sales, partially offset by lower emblematic product sales. Gross Comparable Store Sales for general merchandise decreasedincreased by $(9.9)$3.2 million, or (8.6)%,3.0%, compared towith the priorprior-year year periodperiod, as discussed below.

◦Service and other revenue decreased by $3.5$1.1 million, or 4.9%,5.1%, to $67.0$20.4 million, compared towith $70.5$21.5 million in the prior yearprior-year period, primarily due to lower liquidation sales, lower web deferrals revenue, lower shipping and handling and lower partnership marketing income, offset by higher rental penalty fees and higher marketplace sales.

•Rental income for course materials increaseddecreased by $5.4approximately $0.2 million, or 5.4%,1.8%, to $103.5$13.7 million during the 3913 weeks ended JanuaryAugust 31,1, 20262026, from $98.1$14.0 million during the 3913 weeks ended JanuaryAugust 25,2, 20252025, primarily due to closed stores, the growthtiming of ourdeferred BNCrental First Day® programs, offset by lower rentals due to closed storesrevenue and the continued shift to digital products.

The increase in courseGross materialComparable salesStore Sales for thecourse 39 weeks ended January 31, 2026materials was primarily due to the growth ofin BNC First Day® affordable access courseprograms, material programs (as discussed above),partially offset by declines in a la carte courseware sales. The decreaseincrease in Gross Comparable Store Sales for general merchandise sales arewas primarily relateddue to lowerhigher logosupply sales,and graduation product sales due to timing of graduation events shifting to fourth quarter of Fiscal 2025 from first quarter of Fiscal 2026.sales.