10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended May 1, 2021 OR

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

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes¨ No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ¨  No x

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, a smaller reporting company, or an emerging growth company. See definition 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	☒
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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

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

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant was approximately $109 million based upon the closing market price of $2.30 per share of Common Stock on the New York Stock Exchange as of October 31, 2020. As of June 17, 2021, 51,384,234 shares of Common Stock, par value $0.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the 2021 Annual Meeting of Stockholders are incorporated by reference into Part III.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

INDEX TO FORM 10-K
		Page No.
Disclosure Regarding Forward-Looking Statements		3
Availability of Information		4
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	28
Item 2.	Properties	28
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	29
PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities	29
Item 6.	Selected Financial Data	30
Item 7.	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	32
	Overview	32
	Results Of Operations	34
	Adjusted Earnings, Adjusted EBITDA, and Free Cash Flow (non-GAAP)	42
	Liquidity And Capital Resources	45
	Critical Accounting Policies And Estimates	48
Item 7A.	Quantitative And Qualitative Disclosures About Market Risk	53
Item 8.	Financial Statements And Supplementary Data	54
Item 9.	Changes In And Disagreements With Accountants On Accounting And Financial Disclosure	89
Item 9A.	Controls And Procedures	89
Item 9B.	Other Information	92
PART III
Item 10.	Directors, Executive Officers And Corporate Governance	92
Item 11.	Executive Compensation	92
Item 12.	Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	92
Item 13.	Certain Relationships And Related Transactions, And Director Independence	92
Item 14.	Principal Accountant Fees And Services	93
PART IV
Item 15.	Exhibits, Financial Statement Schedules	93
Item 16.	Form 10-K Summary	95
	Signatures	96

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K 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-K 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;

•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;

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•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 of this Form 10-K.

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-K.

AVAILABILITY OF INFORMATION

Our website address is www.bned.com and our Investor Relations website address is investor.bned.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the U.S. Securities and Exchange Commission (SEC), which maintains an Internet site at www.sec.gov to access such reports. We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by the Company with the SEC are available free of charge on our website at investor.bned.com when such reports are available on the SEC’s website. We use our investor.bned.com website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor investor.bned.com, in addition to following our press releases, SEC filings and public conference calls and webcasts.

The contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

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PART I

Item 1. BUSINESS

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. References to “Student Brands” refer to our subsidiary Student Brands, LLC.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2021” means the 52 weeks ended May 1, 2021, “Fiscal 2020” means the 53 weeks ended May 2, 2020, and “Fiscal 2019” means the 52 weeks ended April 27,2019.

OVERVIEW

General

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 1,417 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omni channel 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 Fanatics 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 our partnership with Fanatics Retail Group Fulfillment, LLC, Inc. and Fanatics Lids College, Inc. (collectively referred to herein as 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 made significant progress in the ongoing rollout of the BNC Adoption & Insights Portal, an innovative platform that provides enhanced support for faculty and academic leadership to research, submit and monitor course material selections, further driving affordability and student success.

We provide product and service offerings designed to address the most pressing issues in higher education, including equitable 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® inclusive access programs, consisting of First Day and First Day Complete, in which course materials, including both physical and digital content, are offered at a reduced price through a course fee or included in tuition, and delivered to students on or before the first day of class. During Fiscal 2021, First Day total revenue increased 94% from the prior year period.

Technology-enabled learning is a rapid growth area in the higher education industry, as a growing number of students are enrolling in online services to complement print and digital course materials and classroom activities. We continue to enhance our digital content and services in an efficient, low-cost/high-value manner to complement our course materials business. Through our suite of online services, on both Student Brands and bartleby.com®, we provide critical services for students to achieve better success throughout their academic journey accessible anytime and anywhere. During Fiscal 2021, over 300,000 new subscribers paid for our bartleby® suite of products and services, representing 70% growth over Fiscal 2020.

During Fiscal 2021 and the fourth quarter of Fiscal 2020, our business was significantly negatively impacted by the COVID-19 pandemic, resulting in an unprecedented material decline in revenue. Please see our Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

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Segments

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. 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”. The following discussion provides information regarding the three segments.

RETAIL SEGMENT

General

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical campus bookstores and 648 virtual bookstores. Our bookstores typically operate under agreements with 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. Our physical and virtual bookstores, e-commerce sites and digital platforms serve and interact with the key constituents in our business ecosystem and enable us to act as a key partner for students, universities and publishers.

The Retail Segment offers existing and prospective clients the flexibility of physical, virtual or custom store solutions, which afford students a ship-to-campus option where course materials are conveniently delivered to a centralized campus location. Students have access to the right course materials at the right time, combined with a superior in-house customer service department to help with ordering, delivery, and digital content inquiries. Students also have the flexibility of using financial aid, and for certain institutions, proprietary campus debit cards for their course material purchases.

The Retail Segment also offers our First Day and First Day Complete inclusive access programs, in which course materials, including both physical and digital content, are offered at a reduced price through a course fee or included in tuition, and delivered to students on or before the first day of class. We have entered into several agreements with major publishers, including Cengage Learning, McGraw-Hill Education and Pearson Education, to distribute their digital content through First Day. Through First Day, digital course materials are adopted by a faculty member for a single course, and students receive their materials through their learning management system. First Day Complete is adopted by an institution and includes all classes, providing students both physical and digital materials. The First Day Complete model drives substantially greater adoption rates and unit sell-through against enrollment for the bookstore. Offering courseware sales through our inclusive access First Day and First Day Complete models is a key and increasingly important strategic initiative of ours to meet the market demands of supporting improved student outcomes, enhanced convenience and substantially reduced pricing to students. In Fiscal 2021, First Day total sales increased by 94% from the prior year.

Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open education resources (“OER”) courseware.

In Fiscal 2021, in the Retail Segment, we signed contracts for 98 new physical and virtual bookstores for estimated first year annual sales of approximately $103 million, which is generally fully achieved as store becomes fully-operational in their first full year of operations. On a net basis, we generated $77 million in net new business, as we looked to prune some under-performing, less profitable stores, and certain other contracts were awarded to competitors. Currently, we estimate that approximately 30% of college and university affiliated bookstores in the United States are operated by their respective institutions. We anticipate an increasing trend towards outsourcing by schools in the campus bookstore market, and we intend to aggressively pursue these opportunities to grow our businesses. We evaluate each new contract based on established profitability measures to ensure we maintain a portfolio of profitable accounts. Our ability to offer existing and prospective clients physical, virtual and custom store solutions is a key element of our competitive strategy.

During all of Fiscal 2021 and the fourth quarter of Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus and school closures. As colleges and universities moved to online remote learning, our wholesale operations continued to serve our bookstore and virtual retail customers. Additionally, 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. Together, our Retail and Wholesale businesses responded very quickly to the store closures, transitioning more than 300 stores to a Custom Store Solutions, or “CSS,” model. Through the CSS model, a customer places their courseware order on a bookstore website, and that order is then directed to the MBS warehouse, which fills and ships the order directly to the customer. This back-end solution is unnoticed by the customer but ensures there is no service delay. It underscores the strength of the virtual and fulfillment capabilities that MBS provides for the company and allows us to support customers through a difficult and uncertain time.

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Partnership with Fanatics and FLC

In December 2020, we entered into a new merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”). 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 under the merchandising partnership agreement, FLC purchased our logo and emblematic general merchandise inventory. 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 and Note 6. Equity and Earnings Per Share.

Contracts

Physical and Custom Campus Bookstore Solutions

We operate 769 physical campus bookstores. Our physical bookstores are typically operated under management agreements with the college or university to be the official university bookstore and the exclusive seller of course materials and supplies, including physical and digital products sold in-store, online or through learning management systems. We pay the school a percentage of sales for the right to be the official college or university bookstore and the use of the premises; approximately half of our agreements do not have any minimum guaranteed amount to be paid to our partners. In addition, we have the non-exclusive right to sell all items typically sold in a college bookstore both in-store and online. We also have the ability to integrate the store's systems with the university’s systems in order to accept student financial aid, university debit cards and other forms of payment. Our decentralized management structure empowers local teams to make decisions based on the local campus needs and fosters collaborative working relationships with our partners.

We also offer “Custom Store Solutions”, as discussed above, where an institution has a physical on-campus store for general merchandise sales, but course materials are offered virtually and fulfilled direct-to-student (either to an individual address or a central campus pick-up point). Additionally, our virtual-only solutions, discussed below, also have the ability to offer ship-to-campus options.

The physical bookstore management contracts with colleges and universities typically include five year terms with renewal options and are typically cancelable by either party without penalty with 90 to 120 days' notice. Our campus bookstores have an average relationship tenure of 15 years. From Fiscal 2018 through Fiscal 2021, approximately 90% of these contracts were renewed or extended, often before their termination dates.

Virtual Campus Bookstore Solutions

We operate 648 virtual campus bookstores. Our virtual bookstores operate under a contract with the school as the exclusive online seller of course materials. We operate as the institution’s official source of course materials with exclusive rights to booklists and access to online programs that link course materials to the courses offered by the school. Our virtual-only solutions typically ship course materials directly to students, but also have the ability to offer ship-to-campus options.

Virtual bookstore agreements typically have a term that ranges between three to five years, with automatic renewal periods. For the past three years, we have retained over 90% of our contracts annually, with the majority of the contracts being automatically renewed as per the contract terms or renewed before their expiration dates. We pay the school a percentage of sales for the right to be the official college or university bookstore.

We also operate Textbooks.comSM which is one of the largest e-commerce sites for new and used textbooks. This division is primarily for direct-to-student sales.

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Customers and Distribution Network

As of May 1, 2021, we operate 769 physical college and university bookstore operations and 648 virtual bookstore operations (420 K-12 virtual stores or 65% and 228 Higher Education virtual stores or 35%) located in the United States, in 50 states and the District of Columbia. Our Retail sales team is organized by specific territory and offer all solutions (physical, virtual or custom store solutions) to public, state, private, community college, trade and technical, for-profit, online education institutions, including K-12 locations, within their respective territories.

Product and Service Offerings

We offer a broad suite of affordable course materials, including new and used print textbooks (which are available for sale or rent), digital textbooks and publisher hosted digital courseware, at our physical and virtual bookstores, as well as directly to students through Textbooks.com. We offer a robust used textbook selection, unique guaranteed buyback program, dynamic pricing, and marketplace offerings.

We service our physical and virtual bookstores with a comprehensive e-commerce experience and a broad suite of affordable course materials. Additionally, our physical campus stores are social and academic hubs through which students can access affordable course materials, along with emblematic apparel and gifts, trade books, technology, school supplies, café offerings, convenience food and beverages, and graduation products. The majority of physical campus stores also have school-branded e-commerce sites which we operate independently or along with our merchant partners, and which offer the same products as the on campus stores.

Product and service offerings include:

•Course Material Sales and Rentals. Sales and rentals of course materials are a core revenue driver and our faculty and student platforms operate as a seamless extension of our partner schools’ registration, student information and learning management systems. Students can purchase affordable course materials, including new and used print, eTextbooks, and publisher digital courseware platforms, which are available for sale or rent. We work directly with faculty to ensure the course materials they have chosen for their courses are available in all required formats before the start of classes. Our wholesale distribution channel enables our Retail Segment to optimize textbook sourcing so they are able to more efficiently source and distribute a comprehensive inventory of affordable course materials to customers. In Fiscal 2021, we made significant progress in the ongoing rollout of BNC Adoption & Insights Portal (“AIP”), an innovative platform that provides enhanced support for faculty and academic leadership to research, submit and monitor course material selections, further driving affordability and student success.

•Inclusive Access. We offer our BNC First Day® inclusive access programs, consisting of First Day and First Day Complete in which course materials are offered at a reduced price through a course fee or included in tuition, and delivered to students on or before the first day of class. We have partnered with VitalSource®, to use their technology to power our First Day inclusive access platform, for digitally formatted courseware, allowing us to accelerate and optimize First Day implementations. We have entered into several agreements with major publishers, including Cengage Learning, McGraw-Hill Education and Pearson, to provide their digital content through First Day. The seamless delivery is made possible by our First Day technology and publishers' technology integrations with campus systems. These initiatives provide students, faculty and institutions greater access to more affordable course materials. First Day offers the inclusive access model on a class-by-class basis, as adopted by the individual instructors on a campus, as compared to our First Day Complete program, in which the entire school adopts the inclusive access model for essentially all of their courses. In Fiscal 2021, First Day programs' total sales increased by 94% from the prior year. First Day Complete offers the delivery of both digital and physical courseware priced at substantial discounts compared to traditional individual student sales offerings. Offering courseware sales through our inclusive access First Day and First Day Complete models is a key and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students while, at the same time, increasing our market share, revenue and relative gross margins of courseware 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.

•BNC OER+. BNC OER+, a turnkey solution for colleges and universities, offers advanced, affordable learning materials built on a high-quality foundation of OER and enhanced with digital content that includes videos, activities and auto-graded practice assessments that faculty can easily customize to align with class objectives. BNC OER+ significantly reduces course material costs for students and is easy for faculty to implement. BNC OER+ is delivered digitally and can be seamlessly integrated with an institution's campus LMS. Optional print companions of the eTextbook are available to students. In Fiscal 2021, we offered 60 courses, including general education courses, sociology, psychology, economics, business, early childhood and criminal justice. In Fiscal 2021, we had BNC OER+ sales to over 7,000 students at 52 unique colleges and universities, including technical colleges and online programs.

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•eTextbooks. We have partnered with VitalSource®, a global leader in building, enhancing and delivering digital content, on our digital reading platform and digital content catalog. The partnership with VitalSource allows us to use its technology to power our First Day inclusive access platform, for digitally formatted courseware, allowing us to accelerate and optimize First Day implementations.

•General Merchandise. For our physical campus bookstores and custom store solutions, we drive general merchandise sales through both in-store and online channels and feature collegiate and athletic apparel, other custom-branded school spirit products, lifestyle products, technology products, supplies and convenience items. We continue to see significant growth in our general merchandise e-commerce sales, which we expect to be further bolstered through our FLC Partnership, as discussed above. We have made continued progress in the development of our next generation e-commerce platform, which launched in Fiscal 2021 to deliver increased high-margin general merchandise sales.

We operate 148 True Spirit e-commerce websites, which are dedicated virtual stores that appeal specifically to the alumni and sports fan base. We also operate pop-up retail locations at major sporting events, such as football and basketball games, for our partner colleges and universities. The True Spirit e-commerce websites for athletic branded merchandise and the physical pop-up retail locations continue to build our partner schools’ brands through alumni and athletics, fostering school spirit and capturing the excitement of collegiate sports. We utilize event driven direct marketing strategies for events, such as tournament playoffs or homecoming events, to target an online population of students, alumni and sports fans, with emails and search engine marketing.

•Cafés and Convenience Stores. At our physical campus locations, we operate 77 customized cafés, featuring Starbucks Coffee®, as well as regional coffee roasters, and 12 stand-alone convenience stores. Our Café locations and convenience marketplaces offer diverse grab-and-go options including organic, vegan, gluten-free and regional fresh food products. These offerings increase traffic and time spent in our physical stores. As market needs change, we are adapting our model to include more grab-and-go pre-packed fresh food items, simplified menus to reduce food waste and new technology to reduce operating complexity and make the customer experience more efficient. During Fiscal 2021, we reduced the number of our cafe locations and their product offerings due to the COVID-19 pandemic.

•Brand Partnerships. Through our unique relationship with students, colleges and universities, and our premier position on campus, we operate as a media channel for brands looking to target the college demographic, and derive revenue from these marketing programs. We also focus on promoting lifestyle products to students and faculty by promoting various brands to connect on a much more personal level. We create strategic, integrated campaigns which include research, email, social media, display advertising, on-campus events, signage, and sampling. Our client list includes brands such as Chase, Target, Masterpass, GEICO, DirecTV, GrubHub, Shutterfly, The New York Times and Tom's of Maine. Revenue from these services have higher margin rates due to the relatively low incremental cost structure to provide these services.

Merchandising and Supply Chain Management

Our purchasing procedures vary based on type of bookstore (physical or virtual) and by product type (i.e. course materials, general merchandise or trade books).

Course Materials and Trade Books

Purchases are made at the bookstore level with strategic corporate oversight to determine purchase quantities and maintain appropriate inventory levels. After titles are adopted for an upcoming term, we determine how much inventory to purchase based on several factors, including student enrollment and the previous term’s course material sales history. For physical campus bookstores, we use an automated sourcing system to determine if another store has the necessary new or used textbooks on hand and may transfer the inventory to the appropriate store.

The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. Our wholesale business significantly increases our textbook supply at competitive prices, as well as our ability to liquidate non-returnable inventory. Our broad wholesale distribution channel and warehousing systems also drive inventory efficiencies by using real-time information regarding title availability, edition status and market prices, allowing the Retail Segment to optimize its course material sourcing and purchasing processes. During Fiscal 2020, we have restructured our management of physical courseware inventory ordering and fulfillment functions to better integrate our Retail and Wholesale personnel and centralize decision-making to achieve efficiencies, cost savings and a more streamlined approach.

After internal sourcing, the bookstore purchases remaining inventory needs from outside suppliers and publishers. For course material sales and rentals, we utilize sophisticated inventory management platforms to manage pricing and inventory across all stores. Our primary suppliers of new textbooks are publishers, including Pearson Education, Cengage Learning, McGraw-Hill Education, Macmillan Learning, and John Wiley & Sons. Both unsold textbooks and trade books are generally returnable to publishers for full credit. Our primary suppliers of used textbooks are students, through returns of previously rented and purchased books. We offer a “Cash for Books” program in which students can sell their books back to the physical or virtual bookstore at the end of the semester, typically in December and May. Students typically receive up to 50% of the

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price they originally paid for the book if it has been adopted for a future class or the current wholesale price if it has not. Recently, the impact of fewer students on campus due to COVID-19 has significantly impacted our on-campus buyback programs.

The larger physical bookstores feature an expanded selection of trade books (general reading). Merchants meet with publishers on a regular basis to identify new titles and trends to support this changing business.

General Merchandise

General merchandise vendors and product selection is driven by our central merchant organization that is responsible for curating the overall product assortment for the academic year, as well as in partnership with FLC for logo and emblematic general merchandise. Benchmarks are established across school type, region and the demographics of each of our schools to allow for store level insights and customization for a product assortment that is unique to address the needs of each school that we serve. Our ability to support and promote our partner schools’ brands strengthens our relationships with the administration, faculty, alumni, fans, parents and students.

Customer Engagement and Marketing

Campus Community

Our campus relationships and contractual agreements allow us to seamlessly integrate into the college and university community. With direct access to our customer base through both physical and digital channels, we drive awareness, revenue and loyalty for the schools that we serve. We actively market and promote to all segments of our customer base for our physical and virtual bookstores, as well as Textbooks.com. We develop fully-integrated marketing programs to drive engagement with the students, parents, alumni and fans to promote all of our product and services, with a focus on academic course material needs, as well as school spirit, supply and technology categories. Textbooks.com marketing strategies target an online population of students, lifelong learners, parents and general textbook shoppers through a variety of channels including email, search engine marketing and affiliate marketing.

We have robust research capabilities that keep us ahead of the rapidly changing needs and behaviors of our customers, which allow us to proactively respond with relevant and dynamic solutions. Our Barnes & Noble College Insights® platform connects us to a community of over 11,000 students who help guide and inform our strategies and direction. In addition, we expect to benefit from the FLC Partnership for insights on logo and emblematic merchandise, brand selection and style preferences, as FLC may be able to identify certain retail trends for similar age demographics at their 1,100 Lids retail locations. We believe Lids has its finger on the pulse of the buyer behavior of the 12-20 year old student consumer to identify and act on trends prior to other retailers.

Our customizable technology delivers a seamless experience providing students and faculty with the ability to research, locate and purchase the most affordable course materials. Our platforms include single sign-on (“SSO”), student information system integration, registration integration, learning management system integration, real-time financial aid platform, point of sale platform and course fee solutions. Through our fully-integrated purchasing process, students can purchase their course materials in-store, online, or when registering for classes.

Faculty and School Administrators

We support faculty and academic leadership with our proprietary online platform which allows content search, discovery and course material adoption, enabling them to offer course materials that are both relevant and affordable for their students.

Seasonality

Our retail business is highly seasonal, 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. Revenue from the rental of physical textbooks is deferred and recognized over the rental period commencing at point of sale. Revenue from the rental of digital textbooks is recognized at time of sale.

WHOLESALE SEGMENT

General

The Wholesale Segment is comprised of the wholesale and virtual retail fulfillment, and support operations of our MBS subsidiary. The Wholesale Segment enables the Company to generate more value from the textbook marketplace through inventory and procurement synergies. Since our acquisition of MBS in 2017, we have achieved certain operational and cost synergies by our ongoing integration of various activities and functions, such as new business sales, inventory management, customer support, and information technology support, amongst other activities.

We are one of the largest textbook wholesalers in the country, providing a comprehensive selection of new and used textbooks at a lower cost of supply to approximately 3,300 physical bookstores, including our Retail Segment's 769 physical campus bookstores. Our wholesale business also sources and distributes new and used textbooks to our 648 virtual bookstores.

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Additionally, through our Wholesale Segment, we sell hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores.

As discussed in the Overview above, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus and school closures. As colleges and universities moved to online remote learning, our wholesale operations continued to serve our bookstore and virtual retail customers. Additionally, 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. Together, our Retail and Wholesale businesses responded very quickly to the store closures, transitioning more than 300 stores to a Custom Store Solutions, or “CSS,” model. Through the CSS model, a customer places their courseware order on a bookstore website, and that order is then directed to the MBS warehouse, which fills and ships the order directly to the customer. This back-end solution is unnoticed by the customer but ensures there is no service delay. It underscores the strength of the virtual and fulfillment capabilities that MBS provides for the company and allowed us to support customers through a difficult and uncertain time.

Product and Service Offerings

Product and Service offerings include:

•Wholesale Textbook Distribution. Our large inventory of used textbooks consists of approximately 280,000 textbook titles in stock, and utilizes a highly automated distribution facility that is capable of processing over 21 million textbooks annually.

Additionally, we are a national distributor for rental textbooks offered through McGraw-Hill Education's consignment rental program (which includes approximately 730 titles) and Pearson Education’s consignment rental program (which includes approximately 587 titles). Through our centrally located, advanced distribution center, we offer the seamless integration of these consignment rental programs and centralized administration and distribution to 1,649 stores, including the Retail Segment 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.

•Wholesale Inventory Management, Hardware and POS Software. We sell hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores. We provide on-site installation for point-of-sale terminals and servers, and offer technical assistance through user training and our support center facility. The cost savings and ease of deployment ensure clients get the most out of their management systems and create strong customer loyalty.

Supply Chain Management

An extensive national sales force secures a steady supply of high demand used textbooks, which is critical to the success of the wholesale business. A primary supplier of used textbooks are students, through the return of previously rented and purchased books to their campus bookstore. We purchase new and used textbooks from our physical and virtual bookstores, other bookstore operators, institutional bookstores, book dealers, publishers, other distributors and other wholesalers. We offer a “Cash for Books” program in which students can sell their books back to the store at the end of the semester, typically in December and May. 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.

Our broad wholesale distribution channel and warehousing systems also drives inventory efficiencies, allowing us to optimize our textbook sourcing, purchasing and liquidation processes. We leverage our wholesale distribution channel and warehousing systems to more efficiently source and distribute a robust, comprehensive inventory of affordable course materials to our bookstore customers. Through our proprietary Database Buying Guide, we have access to the best maintained, most accurate, and most complete source of college textbook information available - a key asset that allows us to develop superior supply and demand insights and risk management capabilities.

Customer Marketing Strategies

We have developed deep relationships with our wholesale customer base as a result of our substantial inventory of used textbooks, a comprehensive catalog of textbooks, and superior service and systems support. We continue to maintain a portfolio of profitable accounts, given the demand for used and new textbooks has historically been greater than the available supply.

Seasonality

Our wholesale business is highly seasonal, as a major portion of sales and operating profit is realized during the first, second and third fiscal quarters, when textbooks are sold for retail distribution.

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DIGITAL STUDENT SOLUTIONS SEGMENT

General

The Digital Student Solutions (“DSS”) Segment includes direct-to-student product and service offerings to assist students to study more effectively and improve academic performance, thus enabling them to gain the valuable skills necessary to succeed after college. DSS 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 services.

We offer these online solutions to students via the internet, and market our offerings directly to students in our physical and virtual bookstore footprint and nationally to students through search engine optimization. Our physical and virtual bookstore footprint, and associated student relationships, present a sizable addressable market for our digital products and services. We continue to enhance and invest in our digital content and solutions to complement and leverage our bookstore and wholesale businesses. Our well-established, deep relationships with college and university partners, as well as our physical presence on campus, provides us with a competitive advantage as we roll out new products and services on the campuses and universities we serve. This integration with our other operating segments allows us to offer students products and services in an increasingly relevant, cost effective, and targeted way. The addressable market outside our physical and virtual bookstore footprint is an additional area where we market these products and services to students.

We continue to expand our ecosystem of products and services through our own internal development, as well as by partnering with other companies to provide products and services designed to improve student success and outcomes. In December 2020, we entered into an agreement with Wolfram|Alpha to develop a math solver as a new feature in our bartleby suite of homework help and learning solutions. Powered by Wolfram|Alpha’s best-in-class computation engine, the math solver will allow students to access an interactive digital calculator that provides real-time, step-by-step explanations for even the most advanced math problems.

Customers and Service Offerings

Student Brands

Student Brands provides writing services in a direct-to-student subscription-based model. Subscription revenue is deferred and recognized over the service period. Student Brands also generates revenue from digital advertisements.

Student Brands has a community of online learners, across its digital properties, which include bartleby.com, 123HelpMe.com, PaperRater.com and StudyMode.com in the United States and TrabalhosFeitos.com, Etudier.com and Monografias.com in Brazil, France and Mexico, respectively.

Student Brands addresses writing pain points; students can search for a topic, develop an outline, and access authenticity technology. The content database allows students to leverage academic resources and references, with 60 million essays across 4 languages with subscribers representing more than 200 different countries. Student Brands utilizes deep data analytics and artificial intelligence to drive its content management system, the “Content Brain” which is also leveraged across the bartleby service offering. The study tools supplement the student’s learning ecosystem by assisting across multiple subjects and varied assignments on a digital platform.

bartleby

Bartleby is a central offering in our developing ecosystem of direct-to-student digital products and services, accessible anytime and anywhere. bartleby.com provides critical services for students to achieve better success throughout their academic journey. The bartleby product offerings consist of bartleby learn™ available on the web or via the bartleby app, comprised of over 2 million textbook solutions, over 3 million question and answer solutions, and student guides; bartleby write™ comprised of revision, plagiarism, citation and scoring tools; and bartleby tutor™ comprised of online tutoring services.

We offer these online solutions to students via the internet, and market our offerings directly to students in our physical and virtual bookstore footprint and nationally to students through search engine optimization. We provide these services in a direct-to-student subscription-based model. Subscription revenue is deferred and recognized over the service period.

Customer Marketing Strategies

The implementation of our digital strategy initially relies on leveraging our bookstore relationships, both physical and virtual, to help accelerate the adoption of our digital products and services. By leveraging our physical and virtual bookstore footprints among students and faculty of both K-12 schools and higher education institutions, as well with our search engine optimization efforts and marketing investment in other channels such as search engine marketing (“SEM”), we have substantially more opportunities to market the solutions students need to improve success in the classroom and beyond. For Fiscal 2021, we have achieved over 300,000 customers subscribed for bartleby homework solutions and writing services

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utilizing marketing and promotional offers, both within our managed bookstore footprint and nationally to students, representing a small percentage of the total addressable market opportunity.

Seasonality

Revenues and operating profit are realized relatively consistently throughout the year, although quarterly results may fluctuate depending on the timing of the start of the various schools' semesters.

COMPETITION

We operate within a competitive and rapidly changing business environment, and each of our lines of business face competition for the products and services they offer. As it relates to our full service campus bookstore operations, Follett is the primary competitor for institutional contracts. We also compete with other vendors for mostly smaller accounts, including BBA Solutions, Texas Book Company, and Slingshot. Our online/virtual course material store operations primarily face competition from eCampus and Akademos, and on occasion, Ambassador Educational Solutions. We also face competition from direct-to-student course material channels, including Amazon, Chegg.com, publishers (e.g. Cengage Learning, Pearson Education and McGraw-Hill Education) that bypass the retail distribution channel by selling directly to students and institutions and other third-party websites and/or local bookstores. We face competition from eTextbook/digital content providers VitalSource Technologies, Inc. and Red Shelf, which offer independent bookstores a catalog of digital content and distribution services and also have direct-to-student selling channels for digital materials.

Competitors for institutional contracts for our cafe and convenience general merchandise offerings include Sodexo and Aramark. Our general merchandise business also faces competition from direct-to-student sales from Walmart, Amazon, Dick’s Sporting Goods, other third-party online retailers, physical and online office supply stores and local and national retailers that offer college-themed and other general merchandise.

Competitors for our wholesale new and used textbook inventory and distribution include Amazon, BBA Solutions, Nebraska Book Company and Texas Book Company.

Our DSS Segment faces competition from other digital student solutions providers including Chegg.com, CourseHero, Grammarly, Quizlet, Noodle Tools, and Turnitin (iParadigms).  As we develop a wider range of products and services, our competitive landscape will change and include other competitors in the broader student services market.

TRENDS AND OTHER BUSINESS CONDITIONS AFFECTING OUR BUSINESS

The market for educational materials continues to undergo significant 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 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

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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.

•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.

GOVERNMENT REGULATIONS

We are subject to a number of laws and regulations that affect companies conducting business on the Internet and in the education industry, many of which are still evolving and could be interpreted in ways that could harm our business. For example, we often cannot be certain how existing laws and regulation, or new laws and regulations, will apply in the e-commerce and online context, including, but not limited to such topics as privacy, antitrust, credit card fraud, advertising, taxation, sweepstakes, promotions, content regulation, financial aid, scholarships, student matriculation and recruitment, quality of products and services and intellectual property ownership and infringement.

Numerous laws and regulatory schemes have been adopted at the national and state level in the United States, and in some cases internationally, that have a direct impact on our business and operations. For example:

The Controlling and Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”) and similar laws adopted by a number of states, regulate unsolicited commercial emails, create criminal penalties for emails containing fraudulent headers and control other abusive online marketing practices. Similarly, the U.S. Federal Trade Commission (“FTC”) has guidelines that impose responsibilities on us with respect to communications with consumers and impose fines and liability for failure to comply with rules with respect to advertising or marketing practices they may deem misleading or deceptive.

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The Telephone Consumer Protection Act of 1991 (“TCPA”) restricts telemarketing and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines. It also applies to unsolicited text messages advertising the commercial availability of goods or services. Additionally, a number of states have enacted statutes that address telemarketing. For example, some states, such as California, Illinois and New York, have created do-not-call lists. Other states, such as Oregon and Washington, have enacted “no rebuttal statutes” that require the telemarketer to end the call when the consumer indicates that he or she is not interested in the product being sold. Restrictions on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal Communications Commission, states and through the availability of statutory damages and class action lawsuits for violations of the TCPA. 

The Restore Online Shopper Confidence Act (“ROSCA”), and similar state laws, impose requirements and restrictions on online services that automatically charge payment cards on a periodic basis to renew a subscription service, if the consumer does not cancel the service.

Regulations related to the Program Participation Agreement of the U.S. Department of Education and other similar laws regulate the recruitment of students to colleges and other institutions of higher learning.

The Digital Millennium Copyright Act (“DMCA”) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing or linking to third-party content that infringes copyrights of others.

The Communications Decency Act provides that online service providers will not be considered the publisher or speaker of content provided by others, such as individuals who post content on an online service provider’s website.

The Company is subject to certain laws relating to the collection, use, retention, security and transfer of personal information. In many cases, these laws apply to not only third-party transactions, but also may impact transfers of personal information among the company and its affiliates. For example:

The General Data Protection Regulation (“GDPR”), became effective on May 18, 2018. This European Union (“EU”) law governing data practices and privacy applies to all of our activities conducted from an establishment in the EU or related to certain of our products and services offered in the EU, and imposes a range of new compliance obligations regarding the handling of personal data.

The California Consumer Privacy Act (“CCPA”), became effective on January 1, 2020. CCPA provides 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 CCPA also includes special requirements for California consumers under the age of 16.

The California Privacy Rights Act of 2020 (“CPRA”) will go into effect on January 1, 2023. CPRA expands upon CCPA by strengthening rights of California consumers, further restricting business use of consumer personal information, and establishing a new government agency for enforcement.

HUMAN CAPITAL

Overview

As of May 1, 2021, we had 4,095 domestic employees, of which approximately 2,761 were full-time and the remaining were regularly scheduled part-time employees. In addition, we employed approximately 6,500 temporary and seasonal employees during peak periods during Fiscal 2021. Of our 2,761 full-time employees, approximately 2,014 work in our Retail Segment, 675 work in our Wholesale Segment, 45 work in our Digital Student Solutions Segment and 27 work in corporate support functions. Our employees are not represented by unions, except for 11 employees. We believe that our relationship with our employees is good.

Personnel recruitment and training

We believe our continued success is dependent in part on our ability to attract, retain and motivate quality employees. Our success depends on our ability to promote and recruit qualified corporate personnel, regional and store managers and full-time and part-time store employees. Regional managers are primarily responsible for recruiting new store managers, while store managers are responsible for the hiring and training of store employees. Many of our part-time retail store employees are students attending the colleges and universities we serve. To attract and retain motivated and talented people, we look for opportunities to promote from within the Company. We recently completed an organizational restructuring in our Retail Segment that resulted in a significant number of employees being promoted to field leadership roles.

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We invest in our employees through structured training programs that offer all employees opportunities for development. We create, manage, or offer a large collection of courses for employees that cover a range of subjects such as goal setting, how to be an effective leader, situational leadership, and effective communication.

Compensation and benefits

We are committed to providing competitive pay and benefits to our employees. Corporate and store management, including store directors, regional managers and store managers, are compensated with base pay plus annual bonuses based on performance. We also offer equity awards to employees in several levels of management. Non-management employees are compensated on an hourly basis in addition to periodic contests and rewards. Many of our employees participate in one of our various incentive programs, which provide the opportunity to receive additional compensation based upon department or Company performance. We also provide our eligible employees the opportunity to participate in a 401(k) retirement savings plan which includes a 100% Company match of the employee’s elective contributions up to 4% of eligible compensation. Although the 401(k) match was suspended as part of the Company’s cost-saving measures in response to the COVID-19 pandemic, we expect to reinstate it during Fiscal 2022. We offer a competitive benefits package for eligible employees and an employee discount on merchandise purchased from our stores.

We also offer an employee assistance program that provides employees and their family members immediate support and guidance, including access to free short-term licensed counseling services, as well as assessments and referrals for further services. Employees have 24-hour access by phone and through an interactive website to find information and resources for hundreds of everyday work and life issues, search for clinicians, submit online service requests and participate in interactive, customizable self-improvement programs.

Inclusion and Diversity

We are focused on creating an inclusive culture and a diverse employee base to better serve our diverse customer base. We provide programming to our employees on inclusion and diversity topics Approximately, 63% of our full-time and part-time employees identify as women and approximately 30% identify as ethnically diverse.

We have required all employees to complete training aimed at preventing harassment and discrimination and will be adding courses in Fiscal 2022 regarding inclusion and diversity and unconscious bias. We have also created a D&I taskforce and engaged an outside consultant to evaluate current practices and impressions and assist us in educating employees on aspects of diversity and inclusion about which they may not have been aware.

Safety

Employee safety is a top priority. We have developed policies to ensure the safety of each employee and compliance with Occupational Safety and Health Administration (“OSHA”) standards. In response to the COVID-19 pandemic, we implemented measures to protect our employees and our customers consistent with OSHA standards and Centers for Disease Control and Prevention (“CDC”) guidelines such as temporary store closures, increased sanitization efforts at our stores, distribution centers and headquarters offices, limiting travel, physical distancing, adopting a mask policy for all customers and employees, and remote work arrangements for the majority of non-retail employees.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following sets forth information regarding our executive officers, including their positions (ages as of June 25, 2021):

Name	Age	Position
Michael P. Huseby	66	Chairman and Chief Executive Officer
Thomas D. Donohue	51	Executive Vice President, Chief Financial Officer
David G. Henderson	63	Executive Vice President, Strategic Services, and President, MBS Textbook Exchange, LLC
Michael C. Miller	49	Executive Vice President, Corporate Development and Affairs, and Chief Legal Officer, Secretary
Seema C. Paul	57	Senior Vice President, Chief Accounting Officer
Jonathan Shar	52	Executive Vice President, Retail

Michael P. Huseby, age 66, serves as our Chairman of the Board of Directors and Chief Executive Officer. He was a member of the Board of Directors of Barnes & Noble from January 2014 and served as the Chief Executive Officer of Barnes & Noble until the complete legal and structural separation of the Company from Barnes & Noble on August 2, 2015. Mr. Huseby was elected to the Board of Directors of the Company and was appointed Executive Chairman effective August 2, 2015. Effective September 19, 2017, Mr. Huseby became Chief Executive Officer of the Company in addition to his role as Chairman

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of the Board of Directors. Previously, Mr. Huseby was appointed President of Barnes & Noble in July 2013, and Chief Financial Officer of Barnes & Noble in March 2012. From 2004 to 2011, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Cablevision Systems Corporation, a leading telecommunications and media company, which was acquired by the Altice Group in June 2016. He served on the Cablevision Systems Corporation Board of Directors in 2000 and 2001. Prior to joining Cablevision, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Charter Communications, Inc., a large cable operator in the United States. Mr. Huseby served on the Board of Directors of Charter Communications from May 2013 through May 2016. Mr. Huseby served as Executive Vice President, Finance and Administration, of AT&T Broadband, a leading provider of cable television services from 1999 to 2002, when it was sold to Comcast Corporation. In addition, Mr. Huseby spent over 20 years at Arthur Andersen, LLP and Andersen Worldwide, S.C., where he held the position of Global Equity Partner serving a myriad of clients, including a number of large publicly-traded companies. Mr. Huseby served on the Board of Directors of CommerceHub, Inc., a cloud-based e-commerce fulfillment and marketing software platform company previously listed on Nasdaq, from July 2016 until May 2018 with his tenure ending upon the consummation of the sale of CommerceHub to financial sponsors. While on the Board of CommerceHub, Mr. Huseby served as chair of the Audit Committee and as a member of the Compensation Committee. Since October 2019, Mr. Huseby has served on the Board of Directors of Whip Media Group, a private technology-based company engaged in transforming the global entertainment content licensing ecosystem.

Thomas D. Donohue, age 51, serves as our Executive Vice President, Chief Financial Officer. In this role he is responsible for overseeing accounting, tax and enterprise risk management, internal audit, treasury and investor relations. Previously, he served as Senior Vice President, Treasurer and Investor Relations for the Company since 2015. Prior to joining Barnes & Noble Education, Mr. Donohue served as Treasurer of Barnes & Noble, Inc. since June 2012. Prior to joining Barnes & Noble, he spent 12 years at the Interpublic Group of Companies, a global provider of advertising and marketing services, where he served as Vice President, Assistant Treasurer, International.

David G. Henderson, age 63, serves as Executive Vice President, Strategic Services, and President, MBS Textbook Exchange, LLC. Mr. Henderson has been with MBS for more than 25 years, where he held various sales and marketing roles before being named President in 2017. Prior to joining MBS in 1993, Mr. Henderson served as Vice President of Sales at First Financial Management Corporation. He has also held management roles at Toy Distributors and Best Products, Inc.

Michael C. Miller, age 49, serves as our Executive Vice President, Corporate Development and Affairs, and Chief Legal Officer, Secretary. Previously, Mr. Miller served as Executive Vice President, Corporate Strategy and General Counsel. Mr. Miller joined Barnes & Noble Education in April 2017 and also serves as Corporate Secretary. Before joining the Company, he served as Executive Vice President, General Counsel and Secretary of Monster Worldwide, Inc. from December 2008 through December 2016, as Vice President and Deputy General Counsel from July 2008 to December 2008, and as Vice President and Associate General Counsel from October 2007 to July 2008. Prior to Monster, Mr. Miller was Senior Counsel for Motorola, Inc. from February 2007 to September 2007. From June 2002 to January 2007, he served in various capacities as Senior Corporate Counsel for Symbol Technologies, Inc. Prior to joining Symbol, Mr. Miller was associated with both Sullivan & Cromwell, LLP and Winthrop, Stimson, Putnam & Roberts in New York.

Seema C. Paul, age 57, joined the Company in July 2015 and serves as our Senior Vice President, Chief Accounting Officer. In this role she manages external reporting and technical accounting, corporate accounting, and financial reporting functions of the Company. Prior to joining the Company, Ms. Paul held positions of increasing responsibility at Covanta Holding Corporation, including Corporate Controller from July 2014 to July 2015, Senior Director-External Reporting & Technical Accounting from June 2013 to July 2014, Director-External Reporting from January 2011 to May 2013 and Manager-External Reporting from August 2005 to December 2010. Ms. Paul is a Certified Public Accountant and has held various senior financial roles with several large companies, including Net2Phone, Sybase, Inc. and Liberty Mutual Insurance Company.

Jonathan Shar, age 52, serves as Executive Vice President, Retail. Mr. Shar has overall responsibility for the growth and profitability of the Company’s Retail segment, including the development and implementation of client-focused solutions that deliver innovation and increased value to the higher education marketplace. Previously, Mr. Shar served as Senior Vice President, Revenue and Product Development for the Company. Prior to joining BNED in 2018, Mr. Shar was Chief Marketing Officer at Akademos, Inc., an e-commerce and digital marketing company that provides online bookstore services, from 2014 to 2018. He previously was the General Manager of NOOK Digital Content at Barnes & Noble, Inc. where he oversaw business development, product development and marketing for the Global NOOK Newsstand, NOOK Video and NOOK Apps digital businesses. Prior to his nearly five years with NOOK, he served as Senior Vice President and General Manager at CNNMoney, responsible for the CNNMoney website and mobile franchise. Prior to that, he was Vice President of Consumer Marketing at Sports Illustrated Group and Director of Consumer Marketing for FORTUNE Magazine Group.

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Item 1A. RISK FACTORS

The risks and uncertainties set forth below, as well as other risks and uncertainties described elsewhere in this Annual Report on Form 10-K including in our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or in other filings by BNED with the SEC, could adversely affect our business, financial condition, results of operations and the trading price of our common stock. Additional risks and uncertainties that are not currently known to us or that are not currently believed by us to be material may also harm our business operations and financial results. Because of the following risks and uncertainties, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

Risks Relating to the COVID-19 Pandemic

The impact of the COVID-19 pandemic, or the impact of any future pandemic, is uncertain and difficult to predict, but the COVID-19 pandemic and the measures taken to contain it has had a material adverse effect on our business and revenues to date and may have a material adverse effect on our business, financial condition, results of operations, stock price, and liquidity in the future.

The COVID-19 pandemic has materially and adversely impacted the U.S. economy and financial markets, 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. Our business, results of operations and financial condition were adversely affected by the COVID-19 pandemic in the fourth quarter of 2020, especially beginning in mid-March, and such impact has continued throughout Fiscal 2021. The COVID-19 pandemic, and measures taken to contain it, have subjected our business, results of operations, financial condition, stock price and liquidity to a number of material risks and uncertainties, all of which may continue or worsen.

Many colleges and K-12 schools were required or opted to cease or limit in-person classes in an attempt to limit the spread of COVID-19 and ensure the safety of their students and faculty. Although some academic institutions have reopened, most are still utilizing online learning as an alternative to traditional in-person instruction. An increase in the spread of COVID-19 or variants could force schools to close again. In addition, as a result of individual health concerns or financial difficulties, enrollment could be negatively impacted. If colleges and schools are required to close or significantly fewer students are on campus, we may experience lower customer engagement with our products and services, which could lead to a materially adverse impact on our business and result of operations.

COVID-19, related governmental reactions and economic conditions may have a negative impact on our business, liquidity, results of operations, and stock price due to the occurrence of some, or all, of the following events or circumstances:

•the closing or limited operations of our campus retail stores;

•reductions in government funding of education could negatively impact the budgets of colleges and K-12 schools public colleges, which could impact the demand for our products and services;

•our inability to realize our expected return on textbooks in our print textbook library as educators transition to online curriculums and the lack of supply of used textbooks as a result of limited on campus buyback opportunities;

•disruptions to the operations of our logistics and distribution partners, which could impact our ability to timely deliver our print textbooks to students;

•our partners’ inability to fill our textbook or general merchandise orders due to disruptions to their operations, supply chains or overwhelming demand from their own customers;

•system interruptions that slow our website or make our website unavailable as our third-party software and service providers experience increased usage;

•a significant reduction in U.S. economic activity and increased unemployment, which could lead to decreased enrollment and consumer spending;

•the potential negative impact on the health of our employees, particularly if a significant number of them are impacted, could affect our ability to ensure business continuity during the period of disruption related to the pandemic;

•governmental orders have forced many of our on-site and management office employees to work remotely, which may adversely impact our ability to effectively manage our business and maintain our financial reporting processes and related controls, as well as introduce operational risk, including an increased vulnerability to potential cyber security attacks; and

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•actions we have taken and may take in the future in response to the COVID-19 pandemic, including significantly reducing our non-essential capital expenditures, reducing our workforce, and other cost reduction efforts, may negatively impact our operations.

Taken individually, or together in any combination, the above could cause a material adverse effect on our business, financial condition, results of operations, and liquidity, although the extent of the potential effect will depend on future actions and outcomes, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the short-term and long-term economic impact of the outbreak, the actions taken to mitigate the impact of the virus, the availability of vaccinations and the pace of economic and financial market recovery when the COVID-19 pandemic subsides, among others. In addition, our results of operations significantly impact our determination of whether we will record a valuation allowance against certain deferred tax assets. 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 and it is possible we will conclude, in future periods, that a higher valuation allowance, than has currently been recorded, will be appropriate. Further, many of the Risk Factors described in this report may be more likely to occur and be further intensified as a result of the impact of the COVID-19 pandemic.

Risks Relating to Our Business and Industry

We face significant competition for our products and services, and we expect such competition to increase.

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, a contract operator of campus bookstores; Texas Book Company, bookstore management and operations; Slingshot; and BBA Solutions, a college textbook retailer. Our online/virtual course material store operations also face competition from eCampus, an online provider of course materials, and Akademos, a virtual bookstore and marketplace for academic institutions, and on occasion, Ambassador Educational Solutions. We also face competition from other third-party sellers and local bookstores, as well as direct-to-student platforms including, bn.com, the e-commerce platform of Barnes & Noble, Inc.; Chegg.com, an online textbook rental company; 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 eTextbooks/digital content providers, VitalSource Technologies, Inc., and Red Shelf. Our wholesale business competes with Amazon, BBA Solutions, Nebraska Book Company, 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. 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 and faculty created content; and sharing or non-purchase of required course materials by students.

Our Digital Student Solutions business faces competition from other providers of online instruction platforms and other direct-to-student writing skills, study tools and tutor services, such as Chegg.com, CourseHero, Grammarly, Quizlet, Noodle Tools, and Turnitin (iParadigms). As we develop a wider range of products and services, our competitive landscape will change and include other competitors in the broader student services market. We have been focused on expanding these offerings, in many instances through the acquisition of other companies, like Student Brands, LLC, or through commercial arrangements. In Fiscal 2019, we launched bartleby textbook solutions and expert question and answers, our first internally developed product within DSS, on bartleby.com. Our newer products and services, or any other products and services we may introduce or acquire, may not be integrated effectively into our business, achieve or sustain profitability or achieve market acceptance at levels sufficient to justify our investment. Our ability to fully integrate new products and services into our platforms or achieve satisfactory financial results from them is unproven. Because we have a limited history in operating a fully digital platform, and the market for our products and services, including newly acquired or developed products and services, is rapidly evolving, it is difficult for us to predict our operating results, particularly with respect to our newer offerings, and the ultimate size of the market for our products and services. If the market for a learning platform does not develop as we expect, or if we fail to address the needs of this market, our business will be harmed.

We have encountered and will continue to encounter these risks and if we do not manage them successfully, our business, financial condition, results of operations and prospects may be materially and adversely affected.

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We may not be able to enter into new managed bookstore contracts or successfully retain or renew our managed bookstore contracts on profitable terms.

An important part of our business strategy for our retail operation is to expand sales for our college bookstore operations by being awarded additional contracts to manage physical and/or virtual bookstores for colleges and universities, and K-12 schools, across the United States. Our ability to obtain those additional contracts is subject to a number of factors that we are not able to control. In addition, the anticipated strategic benefits of new and additional college and university bookstores may not be realized at all or may not be realized within the time frames contemplated by management. In particular for the operation of physical bookstores, contracts for additional managed stores may involve a number of special risks, including adverse short-term effects on operating results, diversion of management’s attention and other resources, standardization of accounting systems, dependence on retaining, hiring and training key personnel, unanticipated problems or legal liabilities, and actions of our competitors and customers. Because certain terms of any contract are generally fixed for the initial term of the contract and involve judgments and estimates that may not be accurate, including for reasons outside of our control, we have contracts that are not profitable and may have such contracts in the future. The retail price charged to the consumer for textbooks is set by our contracts with colleges and universities to be a maximum markup based on the publishers’ costs and as colleges continue to focus on affordability those prices have been reduced, which has negatively impacted our revenue and margin and further reductions could continue to have a negative impact. Even if we have the right to terminate a contract, we may be reluctant to do so even when a contract is unprofitable due to, among other factors, the potential effect on our reputation.

In addition, we may face significant competition in retaining existing physical and virtual store contracts and when renewing those contracts as they expire. Our physical bookstore contracts are typically for five years with renewal options, and most contracts are cancelable by either party without penalty with 90 to 120 days' notice. Our virtual bookstore contracts are typically for three to five years and most are cancelable without penalty with notice. Despite the lower startup and ongoing operating expense associated with virtual stores, the loss of such contracts could impact revenue and profitability. We may not be successful in retaining our current contracts, renewing our current contracts or renewing our current contracts on terms that provide us the opportunity to improve or maintain the profitability of managing stores that are the subject matter of such contracts.

We face the risk of disruption of supplier relationships.

The products that we sell originate from a wide variety of domestic and international vendors. During Fiscal 2021, our four largest retail suppliers, excluding our wholesale business which fulfills orders for all our physical and virtual bookstores, accounted for approximately 34% of our merchandise purchased, with the largest supplier accounting for approximately 13% of our merchandise purchased. Our wholesale business sources over 90% of its inventory from two primary channels, approximately 63% from retail bookstores (including our retail bookstores) and approximately 29% from third-party suppliers. While we believe that our relationships with our suppliers are good, suppliers may modify the terms of these relationships due to general economic conditions or otherwise or, especially with respect to wholesale inventory, publishers could terminate distribution to wholesalers, including our wholesale business.

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, 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. Furthermore, certain of our merchandise is sourced indirectly from outside the United States. Political or financial instability, merchandise quality issues, product safety concerns, trade restrictions, work stoppages, tariffs, foreign currency exchange rates, transportation capacity and costs, inflation, civil unrest, natural disasters, outbreaks of pandemics and other factors relating to foreign trade are beyond our control and could disrupt our supply of foreign-sourced merchandise.

We face the risk of fluctuating inventory supplies as a consequence of changes in the way publishers distribute course materials.

Our traditional retail and wholesale businesses are dependent on the continued supply of textbooks. The publishing industry generally has suffered recently due to, among other things, changing consumer preferences away from the print medium and the economic climate. A significant disruption in this industry generally or a significant unfavorable change in our relationships with key suppliers could adversely impact our business. In addition, any significant change in the terms that we have with our key suppliers including, purchase or rental terms, payment terms, return policies, the discount or margin on products or changes to the distribution model of textbooks, could adversely affect our financial condition and liquidity. For example, some textbook publishers have proposed to supply textbooks on consignment terms, instead of selling to us, which would eliminate those titles from the used textbook inventory supply. With respect to our wholesale business, the demand for used and new textbooks is typically greater than the available supply, and our wholesale business is highly dependent upon its ability to build its textbook inventory from publishers and suppliers in advance of the selling season. These relationships are not

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generally governed by long-term contracts and publishers and suppliers could choose not to sell to us. Any negative impact on our ability to build our textbook inventory could have an adverse impact on financial results.

In response to changes in the market, over the last few years, we have also significantly increased our textbook rental business, offering students a lower cost alternative to purchasing textbooks, which is also subject to certain inventory risks, such as textbooks not being resold or re-rented due to textbooks being returned late or in poor condition, faculty members not continuing to adopt or use certain textbooks, or, as discussed below, changes in the way publishers supply textbooks to us.

Some textbook publishers rent textbooks on consignment terms directly to students. Accordingly, we have entered into agreements with a number of textbook publishers to administer their consignment rental programs with distributors and their direct to student textbook consignment rental programs. These programs, if successful, will result in a substantial decrease in the supply of those titles from the used textbook inventory supply, which impacts our wholesale business.

Our wholesale business is a national distributor for rental textbooks offered through McGraw-Hill Education's consignment rental program (which includes approximately 730 titles) and Pearson Education’s consignment rental program (which includes approximately 587 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 1,649 stores, including our Retail Segment 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.

In addition, the profit margins associated with the traditional distribution model are fairly predictable and constant, but the move to a model of increased consignment rental programs combined with pressure to provide more affordable course materials to students could result in lower profit margins for a substantial part of our wholesale and retail business.

Our wholesale business may not be able to manage its inventory levels effectively which may lead to excess inventory or inventory obsolescence.

Our wholesale business sources new textbooks from publishers and new and used textbooks from other suppliers to resell to its customers. If it is unable to appropriately manage its inventory and anticipate the release of new editions of titles, faculty’s change in choice of titles, return rate, or use of alternative educational material, our wholesale business could be exposed to risks of excess inventory and less marketable or obsolete inventory. This may lead to excess or obsolete inventory which might have to be sold at a deep discount impacting its revenues and profit margin and may have a negative impact on our financial condition and results of operations.

Our business is dependent on the overall economic environment, college enrollment and consumer spending patterns.

A deterioration of the current economic environment could have a material adverse effect on our financial condition and operating results, as well as our ability to fund our growth and strategic business initiatives. Our business is affected by funding levels at colleges and universities and by changes in enrollments at colleges and universities, changes in student enrollments and lower spending on course materials and general merchandise. The growth of our business depends on our ability to attract new students and to increase the level of engagement by current student customers. To the extent we are unable to attract new students or students spend less generally, our business could be adversely affected.

Our business depends on our ability to attract and retain talented employees, including senior management.    

Management believes that our continued success will depend to a significant extent upon the efforts and abilities of certain of our executive officers and senior management, many of whom have significant experience and strong commercial relationships in our industry and capital market relationships. The loss of any of these individuals could harm our business, financial condition and results of operations. We do not maintain “key man” life insurance on any of our officers or other employees. Experienced management and technical, marketing and support personnel in our industry are in high demand, and competition for their talents is intense. If we are less successful in our recruiting efforts, or if we are unable to retain key employees, our ability to develop and deliver successful products and services may be adversely affected.

Our business is seasonal.

Our business is seasonal, particularly with respect to textbook sales and rentals, with sales and rentals attributable to our retail businesses generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming semesters, 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 for retail distribution. Less than satisfactory net sales during our peak fiscal quarters could have a material adverse effect on our financial condition or operating results for the year, and our results of operations from those quarters may not be sufficient to cover any losses that may be incurred in the other fiscal quarters of the year.

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Our international operations could result in additional risks.

Our operations are substantially limited to the United States; however, we have operations in India, offer services and products to students and other customers internationally, contract with service providers outside the United States and may continue to expand internationally. Such international expansion may result in additional risks that are not present domestically and which could adversely affect our business or our results of operations, including compliance with additional United States regulations and those of other nations applicable to international operations; cultural and language differences; currency fluctuations between the U.S. dollar and foreign currencies, which are harder to predict in the current adverse global economic climate; restrictions on the repatriation of earnings; potentially adverse tax consequences and limitations on our ability to utilize losses generated in our foreign operations; different regulatory requirements and other barriers to conducting business; and different or less stable political and economic environments. Further, conducting business abroad subjects us to increased regulatory compliance and oversight. For example, in connection with our international operations, we are subject to laws prohibiting certain payments to governmental officials, such as the Foreign Corrupt Practices Act. A failure to comply with applicable regulations could result in regulatory enforcement actions, as well as substantial civil and criminal penalties assessed against us and our employees.

We are dependent upon access to the capital markets, bank credit facilities, and short-term vendor financing for liquidity needs.

We must have sufficient sources of liquidity to fund working capital requirements. We believe that the combination of cash-on-hand, cash flow received from operations, funds available under our credit agreements and short-term vendor financing will be sufficient to meet our normal working capital and debt service requirements for at least the next twelve months. If these sources of liquidity do not satisfy our requirements, we may need to seek additional financing. In addition, we may require additional capital in the future to sustain or grow our business. The future availability of financing will depend on a variety of factors, such as economic and market conditions, and the availability of credit. These factors could materially adversely affect our costs of borrowing, and our financial position and results of operations would be adversely impacted. Volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if the economy worsens, our business, results of operations and financial condition could be materially and adversely affected.

Risks relating to our Strategic Plan

Our results also depend on the successful implementation of our strategic initiative to grow our digital products and services. We may not be able to implement this strategy successfully, on a timely basis, or at all.

In response to our changing business environment and to adapt to industry trends, we are focused on our digital initiatives to retain and expand existing customer relationships, acquire new accounts, expand sales channels and marketing efforts, integrate and develop direct-to-student digital solutions, and develop and market higher education digital products. While we believe we have the capital resources, experience, management resources and internal systems to successfully operate our digital business, we may not be successful in implementing this strategy. The implementation of our digital strategy is a complex process and relies on leveraging our core products, services and relationships to help accelerate the adoption of our new digital products and services. Success of our future operating results will be dependent upon rapid customer adoption of our new digital products and services and our ability to scale our business to meet customer demand appropriately. If colleges and universities, faculty and students are not receptive to our new products and services or our new products and services do not meet the expectations of these constituencies, there could be a negative impact on the implementation of our strategy. To successfully execute on 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. Further, even if successfully implemented, our business strategy may not ultimately produce positive results.

Part of our strategy includes pursuing strategic acquisitions and partnerships and we may not be able to identify and successfully complete such transactions.

As part of our strategy, we will continue to seek, and, may in the future acquire, businesses or business operations, or enter into other business transactions to grow our business and expand our product and service offerings. We may not be able to identify suitable candidates for additional business combinations and strategic investments, obtain financing on acceptable terms for such transactions, obtain necessary regulatory approvals, if any, or otherwise consummate such transactions on acceptable terms, or at all. In addition, we compete for acquisitions with other potential acquirers, some of which may have greater financial or operational resources than we do. This competition may increase costs of acquiring desirable businesses, and, as a result, we may be unable to make acquisitions or be forced to pay more or agree to less advantageous acquisition terms for the businesses that we are able to acquire. Any strategic acquisitions or investments that we are able to identify and complete may also involve a number of risks, including our inability to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees; the diversion of our management’s attention from our existing

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business to integrate operations and personnel; possible material adverse effects on our results of operations during the integration process; becoming subject to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition that were not known to us at the time of the acquisition; and our possible inability to achieve the intended objectives of the transaction, including the inability to achieve cost savings and synergies. Acquisitions may also have unanticipated tax, legal, regulatory and accounting ramifications, including recording goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges and incurring amortization expenses related to certain intangible assets.

We intend to offer new products and solutions to students to grow our business. If our efforts are not successful, our business and financial results would be adversely affected.

Our ability to attract and retain students and increase their engagement with our learning platform depends on our ability to connect them with the product, person or service they need to save time, save money, and get smarter. For example, in Fiscal 2019, we launched bartleby textbook solutions and expert question and answers, our first internally developed product within DSS, on bartleby.com. The markets for these new products and services may be unproven, and these products may include technologies and business models with which we have little or no prior development or operating experience or may significantly change our existing products and services. In addition, we may be unable to obtain long-term licenses from third-party content providers necessary to allow a product or service, including a new or planned product or service, to function. If our new or enhanced products and services fail to engage our students or attract new students, or if we are unable to obtain content from third parties that students want, we may fail to grow our student base or generate sufficient revenues, operating margin or other value to justify our investments, and our business would be adversely affected.

In the future, we may invest in new products and services and other initiatives to generate revenues, but there is no guarantee these approaches will be successful. Acquisitions of new companies, products and services create integration risk, while development of new products and services and enhancements to existing products and services involve significant time, labor and expense and are subject to risks and challenges, including managing the length of the development cycle, entry into new markets, integration into our existing business, regulatory compliance, evolution in sales and marketing methods and maintenance and protection of intellectual property and proprietary rights. If we are not successful with our new products and services, we may not be able to maintain or increase our revenues as anticipated or recover any associated acquisition or development costs, and our financial results could be adversely affected.

Risks relating to Data Privacy, Information Technology and Cybersecurity

We face data security risks with respect to personal information.

Our business involves the receipt, storage, processing and transmission of personal information about customers and employees. We may share information about such persons with vendors and third parties that assist with certain aspects of our business. Also, in connection with our student financial aid platform and the processing of university debit cards, we secure and have access to certain student personal information that has been provided to us by the universities we serve. Our handling and use of personal information is regulated at the international, federal and state levels and by industry standards, such as the Payment Card Industry Data Security Standard. As an entity that provides services to institutions of higher education, we are contractually bound to handle certain personal information from student education records in accordance with the requirements of Family Educational Rights and Privacy Act (“FERPA”). Privacy and information security laws, regulations, and industry standards change from time to time, and compliance with them may result in cost increases due to necessary systems changes and the development of new processes and may be difficult to achieve. If we fail to comply with these laws, regulations and standards, we could be subjected to legal risk. In addition, even if we fully comply with all laws, regulations and standards, and even though we have taken significant steps to protect personal information, we could experience a data security breach, and our reputation could be damaged, possibly resulting in a material breach of contract with one or more of our clients, lost future sales or decreased usage of credit and debit card products. Further, in the event that we disclose student information in violation of FERPA, the U.S. Department of Education could require a client to suspend our access to their student information for at least five years. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. A party that is able to circumvent our security measures could misappropriate our or our users’ proprietary information and cause interruption in our operations. Any compromise of our data security could result in a violation of applicable privacy and other laws or standards, significant legal and financial exposure beyond the scope or limits of insurance coverage, increased operating costs associated with remediation, equipment acquisitions or disposal and added personnel, and a loss of confidence in our security measures, which could harm our business or affect investor confidence. Data security breaches may also result from non-technical means, for example, actions by an employee.

Our business is subject to a variety of domestic and international laws, rules, policies and other obligations regarding data protection.

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Although most of our operations are in the United States, we do have some operations and offer services and products internationally. Our international operations subject us to a complex array of federal, state and international laws relating to the collection, use, retention, disclosure, security and transfer of personally identifiable data. Many jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. The interpretation and application of data protection laws in the United States, Europe, including but not limited to the GDPR, and elsewhere are uncertain and evolving. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. Complying with these various laws is difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

Further, although we are implementing internal controls and procedures designed to protect sensitive information and confidential and personal data and comply with the GDPR and other privacy-related laws, rules and regulations, our facilities, and systems may be vulnerable to security breaches and other data loss, including cyber-attacks. Such a security breach or data loss could lead to negative publicity, damage to our reputation, exposure to litigation and liability, theft, modification or destruction of proprietary information or key information, damage to or inaccessibility of critical systems, manufacture of defective products, production downtimes, operational disruptions and remediation and other significant costs, which could adversely affect our reputation, financial condition and results of operations.

Computer malware, viruses, hacking and phishing attacks could harm our business and results of operations.

We are increasingly dependent upon information technology systems, infrastructure and data. Our computer systems may be vulnerable to service interruption or destruction, malicious intrusion, ransomware and random attack. Cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. Cyber-attacks could include the deployment of harmful malware, denial-of service, social engineering, ransomware and other means to affect service reliability and threaten data confidentiality, integrity and availability. Our key business partners face similar risks, and a security breach of their systems could adversely affect our security posture. While 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, there can be no assurance that our efforts will prevent service interruptions, or identify breaches in our systems, that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm.

Defects, errors, installation difficulties or performance issues with our point-of-sales and other systems could expose us to potential liability, harm our reputation and negatively impact our business.

Our wholesale business sells and services point-of-sales systems to its college bookstore customers. These systems are complex and incorporate third-party hardware and software. Despite testing and quality control, we cannot be certain that defects or errors will not be found in these systems. In addition, because these systems are installed in different environments, we may experience difficulty or delay in installation. Our products may be integrated with other components or software, and, in the event that there are defects or errors, it may be difficult to determine the origin of defects or errors. Additionally, any difficulty or failure in the operation of these systems could cause business disruption for our customers. If any of these risks materialize, they could result in additional costs and expenses, exposure to liability claims, diversion of technical and other resources to engage in remediation efforts, loss of customers or negative publicity, each of which could impact our business and operating results.

We rely upon third party web service providers to operate certain aspects of our service and any disruption of or interference with such services would impact our operations and our business would be materially and adversely impacted.

Amazon Web Services (“AWS”) and other third-party web service providers provide a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service. We have architected our software and computer systems so as to utilize data processing, storage capabilities, and other services provided by AWS and other providers.

We rely on third-party software and service providers, including AWS, to provide systems, storage and services, including user log in authentication, for our website. Any technical problem with, cyber-attack on, or loss of access to such third parties’ systems, servers or technologies could result in the inability of our students to rent or purchase print textbooks, interfere with access to our digital content and other online products and services or result in the theft of end-user personal information.

Our reliance on AWS or other third-party providers makes us vulnerable to any errors, interruptions, or delays in their operations. Any disruption in the services provided by AWS could harm our reputation or brand or cause us to lose students or revenues or incur substantial recovery costs and distract management from operating our business.

Any disruption of or interference with our use of AWS or other third-party service providers would impact our operations and our business would be materially and adversely impacted.

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AWS may terminate its agreement with us upon 30 days' notice. Upon expiration or termination of our agreement with AWS, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

Risks relating to Laws and Regulations

Laws or regulations may be enacted which restrict or prohibit use of emails or similar marketing activities that we currently rely on.

Our marketing and sales efforts are centered around an active digital community, which includes engaged email subscribers, text messaging, interest-based online advertising, recurring billing and our continuous dialogue with customers on our school-customized social media channels. For example, the following laws and regulations may apply:    

•the CAN-SPAM Act of 2003 and similar laws adopted by a number of states regulate unsolicited commercial emails, create civil and criminal penalties for emails containing fraudulent headers and control other abusive online marketing practices;    

•the U.S. Federal Trade Commission (the “FTC”) has guidelines that impose responsibilities on companies with respect to communications with consumers and impose fines and liability for failure to comply with rules with respect to advertising or marketing or sales practices they may deem misleading or deceptive;

•the Telephone Consumer Protection Act of 1991 (“TCPA”) restricts telemarketing and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages and SMS text messages. It also applies to unsolicited text messages advertising the commercial availability of goods or services. Additionally, a number of states have enacted statutes that address telemarketing. For example, some states, such as California, Illinois and New York, have created do-not-call lists. Other states, such as Oregon and Washington, have enacted “no rebuttal statutes” that require the telemarketer to end the call when the consumer indicates that he or she is not interested in the product being sold. Restrictions on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal Communications Commission, states and through the availability of statutory damages and class action lawsuits for violations of the TCPA;

•The Restore Online Shopper Confidence Act (“ROSCA”), and similar state laws, impose requirements and restrictions on online services that automatically charge payment cards on a periodic basis to renew a subscription service, if the consumer does not cancel the service; 

•the General Data Protection Regulation (“GDPR”), became effective in May 2018. This European Union (“EU”) law governing data practices and privacy which applies to certain of our activities related to products and services offered in the EU, imposes a range of new compliance obligations regarding the handling of personal data; and

•the California Consumer Privacy Act of 2018 (“CCPA”), which came into effect on January 1, 2020, requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices, allows consumers to request the deletion of certain data, and allows consumers to opt out of certain data sharing with third parties and provides a new cause of action for data breaches. The burdens imposed by the CCPA and other similar laws that may be enacted at the federal and state level may require us to modify our data processing practices and policies and how we advertise to our users and to incur substantial expenditure in order to comply.

Even if no relevant law or regulation is enacted, we may discontinue use or support of these activities if we become concerned that students or potential students deem them intrusive or they otherwise adversely affect our goodwill and brand. If our marketing activities are curtailed, our ability to attract new students may be adversely affected.

Our business could be impacted by changes in federal, state, local or international laws, rules or regulations.

We are subject to general business regulations and laws relating to all aspects of our business. These regulations and laws may cover taxation, privacy, data protection (including complying with GDPR), our access to student financial aid, pricing and availability of educational materials, competition and/or antitrust, content, copyrights, distribution, college distribution, mobile communications, electronic contracts and other communications, consumer protection, the provision of online payment services, unencumbered Internet access to our services, the design and operation of websites and mobile application (including complying with the Americans with Disabilities Act), digital content (including governmental investigations and litigation relating to the agency pricing model for digital content distribution), the characteristics and quality of products and services and labor and employee benefits (including the costs associated with complying with the Patient Protection and Affordable Care Act or any legislation enacted in connection with repeal of the Affordable Care Act). Changes in federal, state, local or international laws, rules or regulations relating to these matters could increase regulatory compliance requirements in addition to increasing our costs of doing business or otherwise impact our business. For example, changes in federal and state minimum wage laws

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could raise the wage requirements for certain of our employees at our retail locations, which would increase our selling costs and may cause us to reexamine our wage structure for such employees.

Changes in tax laws and regulations might adversely impact our businesses or financial performance.

We collected sales tax on the majority of the products and services that we sold in our respective prior fiscal years that were subject to sales tax, and we generally have continued the same policies for sales tax within the current fiscal year. While management believes that the financial statements included elsewhere in this Form 10-K reflect management’s best current estimate of any potential additional sales tax liability based on current discussions with taxing authorities, we cannot assure you that the outcome of any discussions with any taxing authority will not result in the payment of sales taxes for prior periods or otherwise, or that the amount of any such payments will not be materially in excess of any liability currently recorded. In the future, our businesses may be subject to claims for not collecting sales tax on the products and services we currently sell for which sales tax is not collected. In addition, our provision for income taxes and our obligation to pay income tax is based on existing federal, state and local tax laws. Changes to these laws, in particular as they relate to depreciation, amortization and cost of goods sold, could have a significant impact on our income tax provision, our projected cash tax liability, or both.

Risks relating to Intellectual Property

We rely on third-party digital content and applications, which may not be available to us on commercially reasonable terms or at all.

We contract with certain third-parties to offer their digital content. Our licensing arrangements with these third-parties do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at all. Some third-party content providers currently, or in the future, may offer competing products and services, and could take action to make it more difficult or impossible for us to license our content in the future. Other content owners, providers or distributors may seek to limit our access to, or increase the total cost of, such content. If we are unable to offer a wide variety of content at reasonable prices with acceptable usage rules, our business may be materially adversely affected.

We rely heavily on proprietary technology and sophisticated equipment to manage certain aspects of our business, including to manage textbook inventory, process deliveries and returns of the textbooks and manage warehousing and distribution.

We use a proprietary system to source, distribute and manage inventory of textbooks and to manage other aspects of our operations, including systems to consider the market pricing for textbooks, general availability of textbook titles and other factors to determine how to buy textbooks and set prices for textbooks and other content in real time. We have invested significant amounts of resources in the hardware and software to develop this system. We rely on the expertise of our engineering and software development teams to maintain and enhance the equipment and software used for our distribution operations. We cannot be sure that the maintenance and enhancements we make to our distribution operations will achieve the intended results or otherwise be of value to students. If we are unable to maintain and enhance our technology to manage textbook sourcing, distribution and inventory, it could disrupt our business operations and have a material adverse impact on our results.

Our wholesale business is also dependent on sophisticated equipment and related software technology for the warehousing and distribution of the vast majority of textbooks supplied to our retail business and others, which is located at MBS’ warehouse facility in Columbia, Missouri. Our ability to efficiently manage our wholesale business depends significantly on the reliability and capacity of these systems. The failure of these systems to operate effectively, problems with maintenance, upgrading or transitioning to replacement systems, especially if such events were to occur during peak periods, could adversely affect our operations, the ability to serve our customers and our results of operations. In addition, substantially all of our wholesale inventory is located in the Columbia warehouse facility. We could experience significant interruption in the operation of this facility or damage or destruction of our inventory due to physical damage to the facility caused by natural disasters, accidents or otherwise. If a material portion of our inventory were to be damaged or destroyed, we would likely incur significant financial loss, including loss of revenue and harm to our customer relationships.

We may not be able to adequately protect our intellectual property rights or may be accused of infringing upon intellectual property rights of third parties.

We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology and similar intellectual property as important to our success, and we rely on trademark, copyright and patent law, domain name regulations, trade secret protection and confidentiality or license agreements to protect our proprietary rights, including our use of the Barnes & Noble trademark. Laws and regulations may not adequately protect our trademarks and similar proprietary rights. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or diminish the value of our trademarks and other proprietary or licensed rights.

We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. The protection of our intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps we

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take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights. We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights.

Other parties also may claim that we infringe their proprietary rights. Because of the changes in Internet commerce and digital content businesses, current extensive patent coverage, and the rapid rate of issuance of new patents, it is possible that certain of our products, content and business methods may unknowingly infringe existing patents or intellectual property rights of others. Successful intellectual property infringement claims against us could result in monetary liability or a material disruption in the conduct of our business. We cannot be certain that our products, content and business methods do not or will not infringe valid patents, trademarks, copyrights or other intellectual property rights held by third parties. We expect that infringement claims in our markets will increase in number. We may be subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. If we were found to have infringed the intellectual property rights of a third party, we could be liable to that party for license fees, royalty payments, lost profits or other damages, and the owner of the intellectual property might be able to obtain injunctive relief to prevent us from using the technology or software in the future. If the amounts of these payments were significant or we were prevented from incorporating certain technology or software into our products, our business could be significantly harmed.

We may incur substantial expenses in defending against these third-party infringement claims, regardless of their merit. As a result, due to the diversion of management time, the expense required to defend against any claim and the potential liability associated with any lawsuit, any significant litigation could significantly harm our business, financial condition and results of operations.

Our digital content offerings depend in part on effective digital rights management technology to control access to digital content. If the digital rights management technology that we use is compromised or otherwise malfunctions, we could be subject to claims, and content providers may be unwilling to include their content in our service.

In addition, the publishing industry has been, and we expect in the future will continue to be, the target of counterfeiting and piracy. We have entered into agreements with major textbook publishers to implement the textbook industry’s Anti-Counterfeit Best Practices. These best practices were developed as a mechanism to assist publishers and distributors in the eradication of counterfeit copies of textbooks in the marketplace. While we have agreed to implement the Anti-Counterfeit Best Practices and have in place our anti-counterfeit policies and procedures (which include removing from distribution suspected counterfeit titles) for preventing the proliferation of counterfeit textbooks, we may inadvertently purchase counterfeit textbooks which may unknowingly be included in the textbooks we offer for sale or rent to students or we may purchase such textbooks through our buyback program. As such, we may be subject to allegations of selling counterfeit books. We have in the past and may continue to receive communications from publishers alleging that certain textbooks sold or rented by us are counterfeit. When receiving such communications, we cooperate, and will continue to cooperate in the future, with such publishers in identifying fraudulent textbooks and removing them from our inventory. We may implement measures in an effort to protect against these potential liabilities that could require us to spend substantial resources. Any costs incurred as a result of liability or asserted liability relating to sales of counterfeit textbooks could harm our business, reputation and financial condition.

We do not own the Barnes & Noble trademark and instead rely on a license of that trademark and certain other trademarks, which license imposes limits on what those trademarks can be used to do.

In connection with the Spin-Off, Barnes & Noble, Inc. granted us an exclusive, perpetual, fully paid up, non-transferable and non-assignable license to use the trademarks “Barnes & Noble College,” “B&N College,” “Barnes & Noble Education” and “B&N Education” and the non-exclusive, perpetual, fully paid up, non-transferable and non-assignable license to use the marks “Barnes & Noble,” “B&N” and “BN,” solely in connection with the contract management of college and university bookstores and other bookstores associated with academic institutions and related websites, as well as education products and services (including digital education products and services) and related websites. These restrictions may materially limit our ability to use the licensed marks in the expansion of our operations in the future. In addition, we are reliant on Barnes & Noble, Inc. to maintain the licensed trademarks.

Risks Relating to our Common Stock and the Securities Market

Our stock price may fluctuate significantly.

We cannot predict the prices at which our Common Stock may trade. The market price of our Common Stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

•actual or anticipated fluctuations in our operating results due to factors related to our businesses;

•success or failure of our business strategies, including our digital education initiative;

•our quarterly or annual earnings or those of other companies in our industries;

•our ability to obtain financing as needed;

•announcements by us or our competitors of significant acquisitions or dispositions;

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•changes in accounting standards, policies, guidance, interpretations or principles;

•the failure of securities analysts to cover our Common Stock;

•changes in earnings estimates by securities analysts or our ability to meet those estimates;

•the operating and stock price performance of other comparable companies;

•investor perception of our Company and the higher education industry;

•overall market fluctuations;

•results from any material litigation or government investigation;

•changes in laws and regulations (including tax laws and regulations) affecting our business;

•changes in capital gains taxes and taxes on dividends affecting stockholders; and

•general economic conditions and other external factors.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our Common Stock.

Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and of Delaware law may prevent or delay an acquisition of the Company, which could affect the trading price of our Common Stock.

Our Amended and Restated Certificate of Incorporation and our Amended and Restated By-laws contain provisions which, together with applicable Delaware law, may discourage, delay or prevent a merger or acquisition that our stockholders consider favorable, including provisions that:

•authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive;

•provide that special meetings of the stockholders may be called only by or at the direction of a majority of our Board or the chairman of our Board of Directors; and

•require advance notice to be given by stockholders for any stockholder proposals or director nominations.

In addition, Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, may affect the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder”.

These provisions may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of the Company, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their Common Stock at a price above the prevailing market price.

Our Amended and Restated By-laws designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Amended and Restated By-laws provide that, subject to limited exceptions, the state and federal courts of the State of Delaware are the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-laws or (d) any other action asserting a claim that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and to have consented to these provisions. This provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees.

Alternatively, if a court were to find this provision of our Amended and Restated By-laws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

Facilities

We lease various office space in New Jersey, New York, Missouri, California, and India and we lease warehouse space in Missouri.

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For our physical campus retail operations, we typically have the exclusive right to operate the official physical school bookstore on college campuses through multi-year management service agreements with our schools. In turn, we pay the school a percentage of store sales and, in some cases, a minimum fixed guarantee. These contracts with colleges and universities are typically five years with renewal options, but can range from one to 15 years, and are typically cancelable by either party without penalty with 90 to 120 days' notice.

As of May 1, 2021, these contracts for the 769 physical stores that we operate expire as follows:

Contract Terms to Expire During  (12 months ending on or about April 30)	Number of Physical Campus Stores
2022	104
2023	50
2024	34
2025	70
2026	79
2027 and later	432

Item 3. 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 in the United States District Court for the District of Delaware, the United States District Court for the District of New Jersey, and the United States District Court for the Northern District of Illinois against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association. The plaintiffs are 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 has 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 October 16, 2020, three named student plaintiffs filed a Consolidated Amended Complaint, as did the retailer plaintiffs. The student plaintiffs and retailer plaintiffs each filed a Second Consolidated Amended Complaint on December 18, 2020, which all Defendants jointly moved to dismiss on January 22, 2021. On June 14, 2021, the Court ordered both cases dismissed with prejudice. Should Plaintiffs pursue an appeal, we intend to vigorously defend this matter. We are currently unable to estimate any potential losses.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BNED.”

As of May 1, 2021, 51,378,913 shares of our common stock and 0 shares of our preferred stock were outstanding. We have reserved 10,409,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. See Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense.

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Repurchase of Shares

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 Fiscal 2021, 2020 and 2018, we did not repurchase shares under the stock repurchase program. As of May 1, 2021, approximately $26.7 million remains available under the stock repurchase program.

During the years ended May 1, 2021, May 2, 2020, and April 27, 2019, we also repurchased 414,174 shares, 374,733 shares, and 351,043 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

Dividends

We paid no other dividends to common stockholders during Fiscal 2021, Fiscal 2020 and Fiscal 2019. We do not intend to pay dividends on our common stock in the foreseeable future.

Item 6. SELECTED FINANCIAL DATA

The selected financial information presented below should be read in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data.

	Fiscal Year (a)
(In thousands of dollars,  except for share and per share amounts)	2021 (b)		2020 (b)		2019 (c)		2018 (c)		2017 (c)
STATEMENT OF OPERATIONS DATA:
Sales:
Product sales and other	$	1,299,740	$	1,671,200	$	1,838,760	$	1,984,472	$	1,641,881
Rental income	134,150		179,863		195,883		219,145		232,481
Total sales	1,433,890		1,851,063		2,034,643		2,203,617		1,874,362
Cost of sales: (d)
Product and other cost of sales	1,093,989		1,303,702		1,395,339		1,522,687		1,281,043
Rental cost of sales	87,240		104,812		111,578		123,697		134,258
Total cost of sales	1,181,229		1,408,514		1,506,917		1,646,384		1,415,301
Gross profit	252,661		442,549		527,726		557,233		459,061
Selling and administrative expenses	338,280		404,472		423,880		433,746		380,793
Depreciation and amortization expense	52,967		61,860		65,865		65,586		53,318
Impairment loss (non-cash) (d)	27,630		433		57,748		313,130		—
Restructuring and other charges (d)	9,960		18,567		7,233		5,429		1,790
Transaction costs (e)	—		—		654		2,045		9,605
Operating (loss) income	(176,176)		(42,783)		(27,654)		(262,703)		13,555
Interest expense, net	8,087		7,445		9,780		10,306		3,464
(Loss) earnings before taxes	(184,263)		(50,228)		(37,434)		(273,009)		10,091
Income tax (benefit) expense	(52,476)		(11,978)		(13,060)		(20,443)		4,730
Net (loss) income	$	(131,787)	$	(38,250)	$	(24,374)	$	(252,566)	$	5,361
(Loss) Earnings per common share:
Basic	$	(2.65)	$	(0.80)	$	(0.52)	$	(5.40)	$	0.12
Diluted	$	(2.65)	$	(0.80)	$	(0.52)	$	(5.40)	$	0.11
Weighted average common shares (thousands):
Basic	49,669		48,013		47,306		46,763		46,317
Diluted	49,669		48,013		47,306		46,763		46,763

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	Fiscal Year (a)
(In thousands of dollars,  except for share and per share amounts)	2021 (b)		2020 (b)		2019 (c)		2018 (c)		2017 (c)
OTHER OPERATING DATA:
Adjusted EBITDA (non-GAAP) (f)	$	(65,625)	$	42,159	$	104,942	$	126,760	$	78,268
Adjusted Earnings (non-GAAP) (f)	$	(89,033)	$	(21,126)	$	25,412	$	56,949	$	12,347
Capital expenditures	$	37,223	$	36,192	$	46,420	$	42,809	$	34,670
OTHER OPERATING DATA - STORE COUNT:
Number of physical stores at period end	769		772		772		768		769
Number of virtual stores at period end	648		647		676		676		712

	Fiscal Year (a)
(In thousands of dollars,  except for share and per share amounts)	2021 (b)		2020 (b)		2019 (c)		2018 (c)		2017 (c)
BALANCE SHEET DATA  (at period end):
Total assets	$	1,038,418	$	1,156,432	$	946,180	$	1,039,211	$	1,299,832
Total liabilities	$	737,384	$	738,681	$	495,552	$	571,248	$	586,124
Short-term debt	$	50,000	$	75,000	$	100,000	$	100,000	$	100,000
Long-term debt	$	127,600	$	99,700	$	33,500	$	96,400	$	59,600
Total stockholders' equity	$	301,034	$	417,751	$	450,628	$	467,963	$	713,708

(a)Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2021” means the 52 weeks ended May 1, 2021, “Fiscal 2020” means the 53 weeks ended May 2, 2020, “Fiscal 2019” means the 52 weeks ended April 27, 2019, “Fiscal 2018” means the 52 weeks ended April 28, 2018, and “Fiscal 2017” means the 52 weeks ended April 29, 2017.

(b)    During Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(c)    We acquired PaperRater on August 21, 2018. The consolidated financial statements for Fiscal 2019 include the financial results of PaperRater from the acquisition date, August 21, 2018, to April 27, 2019.

We acquired Student Brands, LLC on August 3, 2017. The consolidated financial statements for Fiscal 2018 include the financial results of Student Brands from the acquisition date, August 3, 2017, to April 28, 2018.

We acquired MBS Textbook Exchange, LLC on February 27, 2017. The consolidated financial statements for Fiscal 2017 include the financial results of MBS from the acquisition date, February 27, 2017, to April 29, 2017.

(d)    For additional information, see Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies and Note 10. Supplementary Information.

(e)    Transaction costs are costs incurred for business development and acquisitions.

(f)    To supplement our results prepared in accordance with GAAP, we use the measure of Adjusted EBITDA and Adjusted Earnings, which are non-GAAP financial measures as defined by the Securities and Exchange Commission (the “SEC”). See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Adjusted Earnings (non-GAAP) and - Adjusted EBITDA (non-GAAP).

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Item 7.     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. References to “Student Brands” refer to our subsidiary Student Brands, LLC.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2021” means the 52 weeks ended May 1, 2021, “Fiscal 2020” means the 53 weeks ended May 2, 2020, and “Fiscal 2019” means the 52 weeks ended April 27,2019.

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 1,417 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omni channel 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 Fanatics 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 our partnership with Fanatics Retail Group Fulfillment, LLC, Inc. and Fanatics Lids College, Inc. 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 a discussion of our business, see Part I - Item 1. Business.

Partnership with Fanatics and FLC

In December 2020, we entered into a new merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”). 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 under the merchandising partnership agreement, FLC purchased our logo and emblematic general merchandise inventory. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we recognize

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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 and Note 6. Equity and Earnings Per Share.

COVID-19 Business Impact

Our business experienced an unprecedented and significant 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.

Our Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools adjusted their learning model and on-campus activities in response to the pandemic. Fewer students returned to campus, as many schools implemented a remote learning model and curtailed on-campus classes and activities. 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 general merchandise business. Additionally, sales were impacted by overall enrollment declines in higher education. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Other Long-Lived Assets related to the impairment loss (non-cash) recognized during Fiscal 2021.

To mitigate the impact of the business disruption, we have taken steps to significantly reduce costs, including periodically furloughing the majority of our Retail workforce during non-rush seasonal sales periods. We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. Certain elements of this plan were implemented in late Fiscal 2020, while other actions occurred in Fiscal 2021. We have achieved meaningful annualized cost savings from this program.

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 COVID-19 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, 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.

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”. The following discussion provides information regarding the three segments.

Retail Segment

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical bookstores and 648 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 3,300 physical bookstores (including our Retail Segment's 769 physical bookstores) and sources and distributes new and used textbooks to our 648 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 and Other Factors Affecting Our Business

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

Results of Operations

Elements of Results of Operations

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”).

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.

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.

Basis of Consolidation

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.

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Results of Operations - Summary

Our Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning model and on-campus activities in response to the pandemic. See "Overview" for more information. A detailed discussion of Fiscal 2019 items and year-over-year comparisons between Fiscal 2020 and Fiscal 2019 can be found in Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended May 2, 2020 filed with the SEC on July 14, 2020.

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Sales: (a)
Product sales and other	$	1,299,740	$	1,671,200	$	1,838,760
Rental income	134,150		179,863		195,883
Total sales	$	1,433,890	$	1,851,063	$	2,034,643
Net loss	$	(131,787)	$	(38,250)	$	(24,374)
Adjusted Earnings (non-GAAP) (b)	$	(89,033)	$	(21,126)	$	25,412
Adjusted EBITDA (non-GAAP) (b)
Retail	$	(66,827)	$	36,227	$	89,094
Wholesale	18,598		21,567		35,018
DSS	4,491		3,409		6,169
Corporate Services	(22,079)		(19,403)		(24,873)
Eliminations	192		359		(466)
Total Adjusted EBITDA (non-GAAP)	$	(65,625)	$	42,159	$	104,942

 

(a)In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)Adjusted Earnings and Adjusted EBITDA are a 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: 

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Sales:
Product sales and other	90.6	%	90.3	%	90.4	%
Rental income	9.4		9.7		9.6
Total sales	100.0		100.0		100.0
Cost of sales:
Product and other cost of sales (a)	84.2		78.0		75.9
Rental cost of sales (a)	65.0		58.3		57.0
Total cost of sales	82.4		76.1		74.1
Gross margin	17.6		23.9		25.9
Selling and administrative expenses	23.6		21.9		20.8
Depreciation and amortization expense	3.7		3.3		3.2
Impairment loss (non-cash)	1.9		—		2.8
Restructuring and other charges	0.7		1.0		0.4
Operating loss	(12.3)	%	(2.3)	%	(1.4)	%

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

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Results of Operations - 52 weeks ended May 1, 2021 compared with the 53 weeks ended May 2, 2020

	52 weeks ended, May 1, 2021 (a)
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations (b)		Total
Sales:
Product sales and other	$	1,196,320	$	165,825	$	27,374	$	—	$	(89,779)	$	1,299,740
Rental income	134,150		—		—		—		—		134,150
Total sales	1,330,470		165,825		27,374		—		(89,779)		1,433,890
Cost of sales:
Product and other cost of sales	1,047,613		131,142		5,056		—		(89,822)		1,093,989
Rental cost of sales	87,240		—		—		—		—		87,240
Total cost of sales	1,134,853		131,142		5,056		—		(89,822)		1,181,229
Gross profit	195,617		34,683		22,318		—		43		252,661
Selling and administrative expenses	278,149		16,085		22,116		22,079		(149)		338,280
Depreciation and amortization expense	39,634		5,461		7,763		109		—		52,967
Sub-Total:	$	(122,166)	$	13,137	$	(7,561)	$	(22,188)	$	192	(138,586)
Impairment loss (non-cash)											27,630
Restructuring and other charges											9,960
Operating loss											$	(176,176)

	53 weeks ended, May 2, 2020 (a)
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations (b)		Total
Sales:
Product sales and other	$	1,533,029	$	198,353	$	23,661	$	—	$	(83,843)	1,671,200
Rental income	179,863		—		—		—		—		179,863
Total sales	1,712,892		198,353		23,661		—		(83,843)		1,851,063
Cost of sales:
Product and other cost of sales	1,224,798		158,548		4,348		—		(83,992)		1,303,702
Rental cost of sales	104,812		—		—		—		—		104,812
Total cost of sales	1,329,610		158,548		4,348		—		(83,992)		1,408,514
Gross profit	383,282		39,805		19,313		—		149		442,549
Selling and administrative expenses	347,869		18,238		19,172		19,403		(210)		404,472
Depreciation and amortization expense	47,099		5,963		8,670		128		—		61,860
Sub-Total:	$	(11,686)	$	15,604	$	(8,529)	$	(19,531)	$	359	(23,783)
Impairment loss (non-cash)											433
Restructuring and other charges											18,567
Operating loss											$	(42,783)

(a)    In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)    For additional information related to the intercompany activities and eliminations, see Part II - Item 8. Financial Statements and Supplementary Data - Note 5. Segment Reporting.

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Sales

The following table summarizes our sales:

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		%
Product sales and other	1,299,740		1,671,200		(22.2)%
Rental income	134,150		179,863		(25.4)%
Total Sales	$	1,433,890	$	1,851,063	(22.5)%

Our total sales decreased by $417.2 million, or 22.5%, to $1,433.9 million during the 52 weeks ended May 1, 2021 from $1,851.1 million during the 53 weeks ended May 2, 2020. The sales decrease is primarily related to the impact of the additional week for Fiscal 2020, the impact from temporary store closings related to COVID-19 earlier in the fiscal year, as well as lower in store foot traffic, lower enrollments and fewer on-campus events due to COVID-19. The components of the variances are reflected in the table below.

Sales variances	52 weeks ended
Dollars in millions	May 1,  2021
Retail Sales
New stores	$	64.2
Closed stores	(35.4)
Comparable stores (a)	(409.2)
Textbook rental deferral	(3.3)
Service revenue (b)	(0.7)
Other (c)	2.0
Retail Sales subtotal:	$	(382.4)
Wholesale Sales	$	(32.5)
DSS Sales	$	3.7
Eliminations (d)	$	(6.0)
Total sales variance	$	(417.2)

(a)    Comparable store sales includes sales from physical stores that have been open for an entire fiscal year period and virtual store sales for the period, does not include sales from closed stores for all periods presented. Sales for logo and emblematic general merchandise fulfilled by FLC inventory and digital agency sales are included on a gross basis.

(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 total sales decreased by $382.4 million, or 22.3%, to $1,330.5 million during the 52 weeks ended May 1, 2021 from $1,712.9 million during the 53 weeks ended May 2, 2020. Retail added 98 new stores and closed 100 stores (not including temporary store closings due to COVID-19) during the 52 weeks ended May 1, 2021, ending the period with a total of 1,417 stores.

	Fiscal 2021		Fiscal 2020
	Physical	Virtual	Physical	Virtual
Number of stores at beginning of period	772	647	772	676
Opened	40	58	50	71
Closed	43	57	50	100
Number of stores at end of period	769	648	772	647

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Product and other sales for Retail decreased by $336.7 million, or 22.0%, to $1,196.3 million during the 52 weeks ended May 1, 2021 from $1,533.0 million during the 53 weeks ended May 2, 2020. 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 COVID-19 earlier in the fiscal year, as well as the impact of fewer students returning to campus, as many schools 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 high-margin general merchandise business. Additionally, sales were impacted by overall enrollment declines in higher education. Textbook (Course Materials) revenue for Retail decreased primarily due to lower new and used textbook and other course materials sales, while First Day (our inclusive access program), digital and eTextbook revenue increased.

Effective April 4, 2021, as per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis. Additionally, general merchandise sales for Retail decreased primarily due to lower emblematic apparel sales (as many athletic events were canceled due to COVID-19), lower supply product sales and lower graduation product sales (primarily due to COVID-19 related campus closures). We have made continued progress in the development of our next generation e-commerce platform, which launched in Fiscal 2021 to deliver increased high-margin general merchandise sales.

Rental income for Retail decreased by $45.7 million, or 25.4%, to $134.2 million during the 52 weeks ended May 1, 2021 from $179.9 million during the 53 weeks ended May 2, 2020. Rental income is impacted by comparable store sales, new store openings and store closings. The decrease in rental income is primarily due to decreased rental activity due to the COVID-19 pandemic as discussed above and the impact of increased digital offerings.

Comparable store sales for Retail decreased for the 52 week sales period. Comparable store sales were impacted primarily by COVID-19 related campus temporary store closures, lower enrollment and on-campus events (all discussed above), a shift to lower cost options and more affordable solutions, including digital offerings, increased consumer purchases directly from publishers and other online providers, lower general merchandise sales (including graduation products and logo products for athletic events). These decreases were partially offset by increased First Day, digital and eTextbook revenue. Comparable store sales variances for Retail by category for the 52 week period is as follows:

Comparable Store Sales variances for Retail (a)	52 weeks ended
Dollars in millions	May 1, 2021
Textbooks (Course Materials)	$	(158.4)	(15.2)	%
General Merchandise	(235.3)		(45.9)	%
Trade Books	(20.9)		(64.3)	%
Total Comparable Store Sales	$	(414.6)	(26.1)	%

(a) Comparable sales data exclude the impact of the additional week for Fiscal 2020. Comparable store sales includes sales from physical stores that have been open for an entire fiscal year period and virtual store sales for the period, does not include sales from closed stores for all periods presented. Sales for logo and emblematic general merchandise fulfilled by FLC inventory and digital agency sales are included on a gross basis. We believe the current comparable store sales calculation method reflects the manner in which management views comparable sales, as well as the seasonal nature of our business.

Wholesale

Wholesale sales decreased by $32.5 million, or 16.4%, to $165.8 million during the 52 weeks ended May 1, 2021 from $198.3 million during the 53 weeks ended May 2, 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.

DSS

DSS total sales increased by $3.7 million, or 15.7%, to $27.4 million during the 52 weeks ended May 1, 2021 from $23.7 million during the 53 weeks ended May 2, 2020, primarily due to higher bartleby subscription sales, which were partially offset by lower Student Brands sales.

Cost of Sales and Gross Margin

Our cost of sales increased as a percentage of sales to 82.4% during the 52 weeks ended May 1, 2021 compared to 76.1% during the 53 weeks ended May 2, 2020. Our gross margin decreased by $189.9 million, or 42.9%, to $252.7 million, or 17.6% of sales, during the 52 weeks ended May 1, 2021 from $442.5 million, or 23.9% of sales, during the 53 weeks ended May 2, 2020.

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During the 52 weeks ended May 1, 2021, we recognized a merchandise inventory loss and write-off of $15.0 million in cost of goods sold in the Retail Segment discussed below. Excluding the merchandise inventory loss and write-off, cost of goods sold and gross margin was 81.3% and 18.7%, respectively, of sales during the 52 weeks ended May 1, 2021 compared to 76.1% and 23.9%, respectively, of sales during the 53 weeks ended May 2, 2020. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization and Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

Retail

The following table summarizes the Retail cost of sales: 

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		% of Related Sales	May 2,  2020		% of Related Sales
Product and other cost of sales	$	1,047,612	87.6%	$	1,224,798	79.9%
Rental cost of sales	87,240		65.0%	104,812		58.3%
Total Cost of Sales	$	1,134,852	85.3%	$	1,329,610	77.6%

The following table summarizes the Retail gross margin:

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		% of Related Sales	May 2,  2020		% of Related Sales
Product and other gross margin	$	148,708	12.4%	$	308,231	20.1%
Rental gross margin	46,910		35.0%	75,051		41.7%
Gross Margin	$	195,618	14.7%	$	383,282	22.4%

For the 52 weeks ended May 1, 2021, the Retail gross margin as a percentage of sales decreased as discussed below:

•Product and other gross margin decreased (770 basis points), driven primarily by lower margin rates (435 basis points) due to higher markdowns, an unfavorable sales mix (370 basis points) due to lower high-margin general merchandise sales of approximately $231.2 million and the shift to lower margin digital courseware, and a merchandise inventory loss and write-off (100 basis points) of $15.0 million, comprised of a loss of $10.3 million related to the sale of our logo and emblematic general merchandise inventory below cost to FLC and an inventory write-off of $4.7 million related to our initiative to exit certain product offerings and streamline/rationalize our overall non-logo general merchandise product assortment resulting from the centralization of our merchandising decision-making during the year, partially offset by higher contract costs as a percentage of sales related to our college and university contracts (130 basis points) resulting from contract renewals and new store contracts.

•Rental gross margin decreased (670 basis points), driven primarily by higher contract costs as a percentage of sales related to our college and university contracts (620 basis points) and unfavorable rental mix (80 basis points), partially offset by higher rental margin rates (30 basis points).

Wholesale

The cost of sales and gross margin for Wholesale were $131.1 million, or 79.1% of sales, and $34.7 million, or 20.9% of sales, respectively, during the 52 weeks ended May 1, 2021. The cost of sales and gross margin for Wholesale were $158.5 million, or 79.9% of sales, and $39.8 million, or 20.1% of sales, respectively, during the 53 weeks ended May 2, 2020. The gross margin increased to 20.9% during the 52 weeks ended May 1, 2021 from 20.1% during the 53 weeks ended May 2, 2020. The increase was primarily due to the favorable impact of returns and allowances and lower markdowns, partially offset by an unfavorable sales mix.

DSS

Gross margin for the DSS segment was $22.3 million, or 81.5% of sales, during the 52 weeks ended May 1, 2021 and $19.3 million, or 81.6% of sales, during the 53 weeks ended May 2, 2020. The increase in gross margin was primarily due to higher bartleby subscription sales.

Intercompany Eliminations

During the 52 weeks ended May 1, 2021 and 53 weeks ended May 2, 2020, sales eliminations were $89.8 million and $83.9 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.

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During the 52 weeks ended May 1, 2021 and 53 weeks ended May 2, 2020, the cost of sales eliminations were $89.8 million and $84.0 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.

The $0.1 million of gross margin elimination reflects the net impact of the sales eliminations and cost of sales eliminations during both the 52 weeks ended May 1, 2021 and 53 weeks ended May 2, 2020, 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

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		% of Sales	May 2,  2020		% of Sales
Selling and Administrative Expenses	$	338,280	23.6%	$	404,472	21.9%

During the 52 weeks ended May 1, 2021, selling and administrative expenses decreased by $66.2 million, or 16.4%, to $338.3 million from $404.5 million during the 53 weeks ended May 2, 2020. The variances by segment are as follows:

Retail

For Retail, selling and administrative expenses decreased by $69.7 million, or 20.0%, to $278.2 million during the 52 weeks ended May 1, 2021 from $347.9 million during the 53 weeks ended May 2, 2020. This decrease was primarily due to a $59.3 million decrease in stores payroll and operating expenses, including comparable stores, primarily due to temporary furloughed store employees, lower virtual stores and new/closed stores payroll and operating expenses, and a decrease of $10.4 million in corporate payroll, infrastructure costs, product development costs and digital operations costs.

Wholesale

For Wholesale, selling and administrative expenses decreased by $2.1 million, or 11.8%, to $16.1 million during the 52 weeks ended May 1, 2021 from $18.2 million during the 53 weeks ended May 2, 2020. The decrease in selling and administrative expenses was primarily driven by lower payroll and operating costs.

DSS

For DSS, selling and administrative expenses increased by $2.9 million to $22.1 million during the 52 weeks ended May 1, 2021 from $19.2 million during the 53 weeks ended May 2, 2020. The increase in costs was primarily driven by an increase in payroll costs, higher professional services and advertising costs.

Corporate Services

Corporate Services' selling and administrative expenses increased by $2.7 million, or 13.8%, to $22.1 million during the 52 weeks ended May 1, 2021 from $19.4 million during the 53 weeks ended May 2, 2020. The increase was primarily due to higher compensation-related expenses and higher operating expenses.

Depreciation and Amortization Expense

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		% of Sales	May 2,  2020		% of Sales
Depreciation and Amortization Expense	$	52,967	3.7%	$	61,860	3.3%

Depreciation and amortization expense decreased by $8.9 million, or 14.4%, to $53.0 million during the 52 weeks ended May 1, 2021 from $61.9 million during the 53 weeks ended May 2, 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. See impairment loss discuss below.

Impairment loss (non-cash)

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. For information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies and Note 7. Fair Value Measurements.

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During the 52 weeks ended May 1, 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27.6 million, $20.5 million after-tax, comprised of $5.1 million, $13.3 million, $6.3 million and $2.9 million of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively.

During the 53 weeks ended May 2, 2020, we recognized an impairment loss (non-cash) of $0.4 million in the Retail segment related to net capitalized development costs for a project which are not recoverable.

Restructuring and other charges

During the 52 weeks ended May 1, 2021, we recognized restructuring and other charges totaling $10.0 million, comprised primarily of $5.9 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, $5.2 million for professional service costs related to restructuring, process improvements, the financial advisor strategic review process, costs related to development and integration associated with Fanatics and FLC partnership agreements and shareholder activist activities, and $0.5 million related to liabilities for a facility closure, partially offset by a $1.6 million in an actuarial gain related to a frozen retirement benefit plan (non-cash).

During the 53 weeks ended May 2, 2020, we recognized restructuring and other charges totaling $18.6 million comprised primarily of $12.7 million for severance and other employee termination and benefit costs associated with several management changes, the elimination of various positions as part of cost reduction objectives, and professional service costs for process improvements, $2.8 million for professional service costs for shareholder activist activities, $2.7 million in an actuarial loss related to a frozen retirement benefit plan (non-cash), and $0.6 million for a store level asset impairment charge, offset by $0.2 million related to reduction of liabilities for a facility closure.

Operating Loss

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		% of Sales	May 2,  2020		% of Sales
Operating Loss	$	(176,176)	(12.3)%	$	(42,783)	(2.3)%

Our operating loss was $(176.2) million during the 53 weeks ended May 1, 2021 compared to operating loss of $(42.8) million during the 53 weeks ended May 2, 2020. This operating loss increase was due to the matters discussed above.

For the 52 weeks ended May 1, 2021, excluding the $15.0 million of merchandise inventory loss and write-off, $10.0 million of restructuring and other charges and the $27.6 million impairment loss (non-cash), all discussed above, operating loss was $(123.6) million (or (8.6)% of sales).

For the 53 weeks ended May 2, 2020, excluding the $18.6 million of restructuring and other charges and the $0.4 million impairment loss, all discussed above, operating loss was $(23.8) million (or (1.3)% of sales).

Interest Expense, Net

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020
Interest Expense, Net	$	8,087	$	7,445

Net interest expense increased by $0.6 million to $8.1 million during the 52 weeks ended May 1, 2021 from $7.4 million during the 53 weeks ended May 2, 2020 primarily due to higher average borrowings.

Income Tax Benefit

	52 weeks ended			53 weeks ended
Dollars in thousands	May 1,  2021		Effective Rate	May 2,  2020		Effective Rate
Income Tax Benefit	$	(52,476)	28.5%	$	(11,978)	23.8%

We recorded an income tax benefit of $(52.5) million on a pre-tax loss of $(184.3) million during the 52 weeks ended May 1, 2021, which represented an effective income tax rate of 28.5% and an income tax benefit of $(12.0) million on a pre-tax loss of $(50.2) million during the 53 weeks ended May 2, 2020, which represented an effective income tax rate of 23.8%.

The effective tax rate for the 52 weeks ended May 1, 2021 is higher as compared to the comparable prior year period due to various permanent differences and the impact of the CARES Act.

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Impact of U.S. Tax Reform

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, among other provisions. In accordance with SAB 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118), we completed our accounting for the tax effects of the enactment of the Act within the provisional period as of April 27, 2019. We recorded measurement period adjustments during Fiscal 2019 to reduce our net deferred tax liability by $3.9 million, which primarily relates to the acceleration of certain deductions as permitted by the U.S. tax code. The most significant impact of the legislation for the Company was a $20.4 million reduction of the value of our net deferred (which represents future tax liabilities) and long-term tax liabilities as a result of lowering the U.S. corporate income tax rate from 35% to 21%, which was recorded in Fiscal 2018. We also recorded a liability associated with the one-time transition tax. This amount is not material.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”) was enacted. We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contribution and net operating loss limitations (“NOLs”), modifications to the deductibility of business interest expense, as well as Alternative Minimum Tax (“AMT”) credit acceleration. The most significant impact of the legislation for the Company was an income tax benefit of $7.2 million for the carryback of NOLs to higher tax rate years, recorded in Fiscal 2021. As of May 1, 2021, we recognized a current income tax receivable for NOL carrybacks of $30.5 million in prepaid and other current assets on the consolidated balance sheet.

Net Loss 

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020
Net Loss	$	(131,787)	$	(38,250)

As a result of the factors discussed above, we reported a net loss of $(131.8) million during the 52 weeks ended May 1, 2021, compared with a net loss of $(38.3) million during the 53 weeks ended May 2, 2020. Adjusted Earnings (non-GAAP) is $(89.0) million during the 52 weeks ended May 1, 2021, compared with $(21.1) million during the 53 weeks ended May 2, 2020. See Adjusted Earnings (non-GAAP) discussion below.

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 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 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.

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Adjusted Earnings (non-GAAP)

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Net loss (a)	$	(131,787)	$	(38,250)	$	(24,374)
Reconciling items, after-tax (below)	42,754		17,124		49,786
Adjusted Earnings (non-GAAP)	$	(89,033)	$	(21,126)	$	25,412
Reconciling items, pre-tax
Impairment loss (non-cash) (b)	$	27,630	$	433	$	57,748
Merchandise inventory loss and write-off (c)	14,960		—		—
Content amortization (non-cash) (d)	5,034		4,082		1,096
Restructuring and other charges (e)	9,960		18,567		7,233
Transaction costs (f)	—		—		654
Reconciling items, pre-tax	57,584		23,082		66,731
Less: Pro forma income tax impact (g)	14,830		5,958		16,945
Reconciling items, after-tax	$	42,754	$	17,124	$	49,786

Adjusted EBITDA (non-GAAP)

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Net loss (a)	$	(131,787)	$	(38,250)	$	(24,374)
Add:
Depreciation and amortization expense	52,967		61,860		65,865
Interest expense, net	8,087		7,445		9,780
Income tax benefit	(52,476)		(11,978)		(13,060)
Impairment loss (non-cash) (b)	27,630		433		57,748
Merchandise inventory loss and write-off (c)	14,960		—		—
Content amortization (non-cash) (d)	5,034		4,082		1,096
Restructuring and other charges (e)	9,960		18,567		7,233
Transaction costs (f)	—		—		654
Adjusted EBITDA (non-GAAP)	$	(65,625)	$	42,159	$	104,942

(a) In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

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

(c)    See Management Discussion and Analysis - Results of Operations - Cost of Sales and Margin discussion above.

(d)    Earnings are adjusted for amortization expense (non-cash) related to content development costs which are included in cost of goods sold.

(e)    See Management Discussion and Analysis - Restructuring and Other Charges discussion above.

(f)    Transaction costs are costs incurred for business development and acquisitions.

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

The following is Adjusted EBITDA by segment for Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Adjusted EBITDA - by Segment	52 weeks ended May 1, 2021 (a)
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations		Total Fiscal 2021
Sales	$	1,330,470	$	165,825	$	27,374	$	—	$	(89,779)	$	1,433,890
Cost of sales (b)	(1,119,148)		(131,142)		(767)		—		89,822		(1,161,235)
Gross profit	211,322		34,683		26,607		—		43		272,655
Selling and administrative expenses	278,149		16,085		22,116		22,079		(149)		338,280
Adjusted EBITDA (non-GAAP)	$	(66,827)	$	18,598	$	4,491	$	(22,079)	$	192	$	(65,625)

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Adjusted EBITDA - by Segment	53 weeks ended May 2, 2020 (a)
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations		Total Fiscal 2020
Sales	$	1,712,892	$	198,353	$	23,661	$	—	$	(83,843)	$	1,851,063
Cost of sales (c)	(1,328,796)		(158,548)		(1,080)		—		83,992		(1,404,432)
Gross profit	384,096		39,805		22,581		—		149		446,631
Selling and administrative expenses	347,869		18,238		19,172		19,403		(210)		404,472
Adjusted EBITDA (non-GAAP)	$	36,227	$	21,567	$	3,409	$	(19,403)	$	359	$	42,159

Adjusted EBITDA - by Segment	52 weeks ended April 27, 2019
Dollars in thousands	Retail		Wholesale		DSS		Corporate Services		Eliminations		Total Fiscal 2019
Sales	$	1,889,008	$	223,374	$	21,339	$	—	$	(99,078)	$	2,034,643
Cost of sales (d)	(1,436,684)		(167,033)		(666)		—		98,562		(1,505,821)
Gross profit	452,324		56,341		20,673		—		(516)		528,822
Selling and administrative expenses	363,230		21,323		14,504		24,873		(50)		423,880
Adjusted EBITDA (non-GAAP)	$	89,094	$	35,018	$	6,169	$	(24,873)	$	(466)	$	104,942

(a) In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)    For the 52 weeks ended May 1, 2021, gross margin excludes $0.7 million and $4.3 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively. For the 52 weeks ended May 1, 2021, gross margin also excludes a merchandise inventory loss and write-off of $15.0 million in the Retail Segment. See Management Discussion and Analysis - Results of Operations - Cost of Sales and Margin discussion above.

(c)    For the 53 weeks ended May 2, 2020, gross margin excludes $0.8 million and $3.7 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively.

(d) For the 52 weeks ended April 27, 2019, gross margin excludes $0.5 million and $0.6 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively.

Free Cash Flow (non-GAAP)

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Adjusted EBITDA (non-GAAP)	$	(65,625)	$	42,159	$	104,942
Less:
Capital expenditures (a)	37,223		36,192		46,420
Cash interest	6,778		6,796		8,589
Cash taxes	6,008		(4,141)		10,277
Free Cash Flow (non-GAAP)	$	(115,634)	$	3,312	$	39,656

(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

Dollars in thousands	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Physical store capital expenditures	$	10,382	$	13,926	$	19,362
Product and system development	11,747		15,710		13,581
Content development costs	8,741		4,335		11,509
Other	6,353		2,221		1,968
Total Capital Expenditures	$	37,223	$	36,192	$	46,420

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Liquidity and Capital Resources

Our primary sources of cash are net cash flows from operating activities, funds available under a credit agreement and short-term vendor financing. As of May 1, 2021, we had $177.6 million of borrowings outstanding under the Credit Agreement. See Financing Arrangements discussion below.

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.

COVID-19 Business Impact

Our Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools adjusted their learning model and on-campus activities in response to the pandemic. Fewer students returned to campus, as many schools implemented a remote learning model and curtailed on-campus classes and activities. 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 general merchandise business. Additionally, sales were impacted by overall enrollment declines in higher education. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Other Long-Lived Assets related to the impairment loss (non-cash) recognized during Fiscal 2021.

To mitigate the impact of the business disruption, we have taken steps to significantly reduce costs, including periodically furloughing the majority of our Retail workforce during non-rush seasonal sales periods. We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. Certain elements of this plan were implemented in late Fiscal 2020, while other actions occurred in Fiscal 2021. We have achieved meaningful annualized cost savings from this program.

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 COVID-19 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, 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.

Sale of Treasury Shares and Merchandise Inventory

In December 2020, we entered into a new merchandising partnership with Fanatics and FLC which included a strategic equity investment in the Company. Fanatics, Inc. and Lids Holdings, Inc. jointly purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $15.0 million, representing a share price of $6.50 per share. The premium price paid above the fair market value of our common stock at closing was approximately $4.1 million and was recognized as a contract liability ($0.2 million in accrued liabilities and $3.9 million in other long-term liabilities on our consolidated balance sheet) which is expected to be earned over the term of the merchandising contracts for Fanatics and FLC.

On April 4, 2021, as contemplated by the merchandising partnership agreement, we closed on the sale of our logo and emblematic general merchandise inventory to FLC and received proceeds of $41.8 million, and recognized a merchandise inventory loss on the sale of $10.3 million in cost of goods sold during the 52 weeks ended May 1, 2021 in the statement of operations for the Retail Segment. The final inventory purchase price will be determined during the first quarter of Fiscal 2022.

For additional information regarding the merchandising partnership, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Partnership with Fanatics and FLC, Note 2. Summary of Significant Accounting Policies - Merchandise Inventories, and Note 6. Equity and Earnings Per Share - Sale of Treasury Shares.

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Sources and Uses of Cash Flow

Our Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning model and on-campus activities in response to the pandemic. See "Overview" for more information. A detailed year-over-year comparisons between Fiscal 2020 and Fiscal 2019 can be found in 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 year ended May 2, 2020 filed with the SEC on July 14, 2020.

Dollars in thousands	Fiscal 2021		Fiscal 2020		Fiscal 2019
Cash, cash equivalents, and restricted cash at beginning of period	$	9,008	$	14,768	$	16,869
Net cash flows provided by (used in) operating activities	32,882		(8,676)		121,791
Net cash flows used in investing activities	(36,875)		(37,019)		(55,620)
Net cash flows provided by (used in) financing activities	11,799		39,935		(68,272)
Cash, cash equivalents, and restricted cash at end of period	$	16,814	$	9,008	$	14,768

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 textbooks and other course materials are sold 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 schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Cash flows provided by operating activities during Fiscal 2021 were $32.9 million compared to cash flow used in operating activities of $(8.7) million during Fiscal 2020. This increase in cash provided by operating activities of $41.6 million was primarily due to proceeds from the sale of logo merchandise inventory to FLC of $41.8 million, partially offset by lower net income, an increase in other long-term liabilities due to sale of treasury shares at a premium (discussed above), and changes in working capital. As discussed above, our operations were highly impacted by the COVID-19 pandemic in Fiscal 2021.

Cash Flow from Investing Activities

Cash flows used in investing activities during Fiscal 2021 were $(36.9) million compared to $(37.0) million during Fiscal 2020. Cash used in investing activities is primarily for 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 and lower payments to acquire businesses and the change in other noncurrent assets for contractual obligations. Capital expenditures totaled $37.2 million and $36.2 million during Fiscal 2021 and Fiscal 2020, respectively.

Cash Flow from Financing Activities

Cash flows provided by financing activities during Fiscal 2021 were $11.8 million compared to $39.9 million during Fiscal 2020. This net change of $28.1 million is primarily due to higher net borrowings under the credit agreement and the sale of treasury shares of $10.9 million (discussed above), partially offset by the payment of deferred financing costs of $1.1 million.

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 five-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 52 weeks ended May 1, 2021, we borrowed $719.7 million and repaid $722.6 million under the Credit Agreement, with $177.6 million of outstanding borrowings as of May 1, 2021. During the 53 weeks ended May 2, 2020, we

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borrowed $600.9 million and repaid $559.7 million under the Credit Agreement, with $174.7 million of outstanding borrowings as of May 2, 2020. During 52 weeks ended April 27, 2019, we borrowed $521.2 million and repaid $584.1 million under the Credit Agreement, and had outstanding borrowings of $33.5 million and $100.0 million under the Credit Facility and FILO Facility, respectively, as of April 27, 2019. As of both May 1, 2021 and May 2, 2020, we have issued $4.8 million in letters of credit under the Credit Facility.

During the 52 weeks ended May 1, 2021, we incurred debt issuance costs totaling $1.1 million related to the March 31, 2021 Credit Facility amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

Interest under the Credit Facility accrues, at our election, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the Credit Facility. Loans will initially bear interest at LIBOR plus 2.00% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 1.00% per annum, in the alternative, and thereafter the interest rate will fluctuate between LIBOR plus 2.00% per annum and LIBOR plus 1.50% per annum (or between the alternate base rate plus 1.000% per annum and the alternate base rate plus 0.50% per annum), based upon the excess availability under the Credit Facility at such time.

Loans under the FILO Facility will bear interest at a rate equal to the LIBOR rate, plus 3.750%. In connection with the waiver, the applicable margin for credit extensions made under the FILO Facility after March 31, 2021 through the end of 2021 was increased by 0.50% (to 3.75% per annum for LIBO rate loans and 2.75% for base rate loans). The FILO Facility will be available solely during the draw period each year, from April 1 through July 31. We are required to borrow 100% of the aggregate commitments under the FILO Facility on April 1 of each year, and the loans must be repaid in full (including interest and fees) on July 31 of each year. The commitments under the FILO Facility will decrease from $50.0 million to $25.0 million on August 1, 2021. We will pay a commitment fee of 0.375% on the daily unused portion of the FILO Facility.

The Credit Facility contains customary negative covenants, which limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements and a minimum excess availability of the greater of 10% of the Loan Cap and $25.0 million when the FILO is funded) would be triggered, and the lenders would have the right to assume dominion and control over the Company's cash. The Credit Facility includes an anti-cash hoarding provision, which limits maximum excess cash allowed to $50.0 million when the FILO is funded.

The Credit Facility contains customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit Facility also contains customary affirmative covenants and representations and warranties. We are in compliance with all covenants, representations and warranties under the Credit Facility as of May 1, 2021.

Income Tax Implications on Liquidity

As of May 1, 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 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.

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 Fiscal 2021, Fiscal 2020, and Fiscal 2019, we did not purchase shares under the stock repurchase program. As of May 1, 2021, approximately $26.7 million remains available under the stock repurchase program.

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During Fiscal 2021, Fiscal 2020, and Fiscal 2019, we also repurchased 414,174 shares, 374,733 shares, and 351,043 shares of our common stock, respectively, in connection with employee tax withholding obligations for vested stock awards.

Contractual Obligations

The following table sets forth our contractual obligations as of May 1, 2021 (in millions):

	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Credit Facility (a)	$	127.6	$	127.6	$	—	$	—	$	—
FILO Facility (a)	75.0		50.0		25.0		—		—
Lease obligations (excluding imputed interest) (b)	320.8		99.7		89.1		61.8		70.2
Purchase obligations (c)	26.3		14.8		11.0		0.5		—
Other long-term liabilities reflected on the balance sheet under GAAP (d) (e)	—		—		—		—		—
Total	$	549.7	$	292.1	$	125.1	$	62.3	$	70.2

 

(a)As of May 1, 2021, we had a total of $177.6 million of outstanding borrowings under the Credit Facility and FILO Facility. See Financing Arrangements discussion above for information about future borrowings and payments under the FILO Credit Facility.

(b)Our contracts for physical bookstores with colleges and universities are typically five years with renewal options, but can range from one to 15 years, and are typically cancelable by either party without penalty with 90 to 120 days' notice. Annual projections are based on current minimum guarantee amounts. In approximately 50% of our contracts with colleges and universities that include minimum guarantees, the minimum guaranteed amounts adjust annually to equal less than the prior year's commission earned. Excludes obligations under store leases for property insurance and real estate taxes, which totaled approximately 2.7% of the minimum rent payments under those leases.

(c)Includes information technology contracts.

(d)Other long-term liabilities excludes $25.3 million of tax liabilities related to the long-term tax payable associated with the LIFO reserve for which we cannot make a reasonably reliable estimate of the amount and period of payment. See Income Tax Implications on Liquidity discussed above.

(e)    Other long-term liabilities excludes expected payments related to employee benefit plans. See Part II - Item 8. Financial Statements and Supplementary Data — Note 12. Employee Benefit Plans.

Certain Relationships and Related Party Transactions

See Part II - Item 8. Financial Statements and Supplementary Data — Note 11. Related Party Transactions.

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements in accordance with GAAP, we are required to use judgment in making estimates and assumptions that affect the amounts reported in our consolidated financial statements and related notes. In preparing these financial statements, management has made its best estimates and judgments with respect to certain amounts included in the financial statements, giving due consideration to materiality. We do not believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.

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 Part II - Item 8. Financial Statements and Supplementary Data - Note 4. 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.

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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.

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.

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.

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. There were no LIFO adjustments in Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory. Reserve calculations are sensitive to certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the non-returnable inventory reserve. However, if assumptions based on our history of liquidating non-returnable inventory are incorrect, we may be exposed to losses or gains that could be material. A 10% change in actual non-returnable inventory would have affected pre-tax earnings by approximately $6.0 million in Fiscal 2021.

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. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate shortage rates. However, if our estimates

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regarding shortage rates are incorrect, we may be exposed to losses or gains that could be material. A 10 basis point change in actual shortage rates would have affected pre-tax earnings by approximately $0.2 million in Fiscal 2021.

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. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate rental cost of goods sold. However, if our estimates regarding residual value are incorrect, we may be exposed to losses or gains that could be material. A 1% change in rental cost of goods sold would have affected pre-tax earnings by approximately $0.4 million in Fiscal 2021.

Long-Term Incentive Compensation

The assumptions used in calculating the fair value of long-term incentive compensation payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. See Part II - Item 8. Financial Statements and Supplementary Data — Note 13. Long-Term Incentive Compensation Expense for a further discussion of our stock-based incentive plan.

We are required to estimate the expected forfeiture rate, and only recognize expense for those shares expected to vest. If their actual forfeiture rate is materially different from their estimate, our long-term incentive compensation expense could be significantly different from what we recorded in the current period. 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.

Phantom shares will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed a specific price per share. The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model. 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.

We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to determine long-term incentive compensation expense. If actual results are not consistent with the assumptions used, the long-term incentive compensation expense reported in our financial statements may not be representative of the actual economic cost of the long-term incentive compensation. A 10% change in our long-term incentive compensation expense would have affected pre-tax earnings by approximately $0.9 million in Fiscal 2021.

Evaluation of Other Long-Lived Assets Impairment

As of May 1, 2021, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $89.2 million, $240.5 million, $150.9 million, and $29.1 million, respectively, on our consolidated balance sheet.

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 and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools adjusted their learning models and on-campus activities. Many of the trends observed during the Fall semester continued into the Spring semester, as fewer students have returned to campus for the Spring semester, many colleges and universities continued with remote learning models and on-campus classes and activities have been further curtailed, including many athletic conferences that have been either eliminated or severely restricted. These combined events impacted the Company’s course materials and general merchandise business. During the third quarter of Fiscal 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27.6 million, $20.5 million after-tax, comprised of $5.1 million, $13.3 million, $6.3 million and $2.9 million of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively,

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on the consolidated statement of operations. The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 7. Fair Value Measurements.

In the first quarter of Fiscal 2020, we recorded an impairment loss (non-cash) of $0.4 million in the Retail segment related to net capitalized development costs for a project which are not recoverable. During the fourth quarter of Fiscal 2020, in conjunction with COVID-19 related campus store closures, we evaluated certain of our long-lived assets associated with our Retail and Wholesale segments for impairment. Based on the results of the tests, for the Retail segment, we recognized an impairment loss of $0.6 million related to store-level assets in restructuring and other charges. These long-lived assets were not recoverable and had a de minimis fair value, as determined using an income approach (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets.

During the fourth quarter of Fiscal 2019, in conjunction with the change to reporting segments and the interim goodwill impairment test noted below, as well as operational changes in certain long-lived asset groups, we evaluated certain of our long-lived assets for impairment and recognized an impairment loss of $8.4 million, comprised of $8.1 million of intangible assets, primarily acquired technology, and $0.3 million of property and equipment related to our LoudCloud and Promoversity operations. These long-lived assets were not recoverable and had a de minimis fair value, as determined using the relief-from-royalty and income approaches (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets.

The impairment analysis process requires significant estimation to determine recoverability of each asset group and to determine the fair value of asset groups that were not recoverable, as well as the fair values of certain operating right-of-use assets included within the asset groups that were not recoverable. The significant assumptions used included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value. Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate. These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).

We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to calculate long-lived asset impairment losses. However, if actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material. A 10% decrease in our estimated discounted cash flows would not have materially affected the results of our operations in Fiscal 2021.

Evaluation of Goodwill Impairment

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets. 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. As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 million of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

During the third quarter of both Fiscal 2021 and Fiscal 2020, we completed our annual goodwill impairment test and concluded that 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.

During the third quarter of Fiscal 2019, we completed our annual goodwill impairment test and concluded that the fair value of the MBS and DSS reporting units, as they existed at that time, each exceeded their respective carrying values and no goodwill impairment was recognized. In the fourth quarter of Fiscal 2019, due to the change in our reporting units identified as a result of the change in our reportable segments, we recognized a total goodwill impairment (non-cash impairment loss) of $49.3 million associated with the MBS reporting unit (as it existed at that date) and allocated $20.5 million of goodwill to the Retail Segment and $28.7 million of goodwill to the Wholesale Segment.

Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; and the determination of the fair value of each reporting unit. In performing the valuation, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions.

We estimated the fair value of our reporting units using a weighting of fair values derived from the income approach and the market approach for our annual impairment testing and using the income approach for our interim impairment test. Under the income approach, we calculate the fair value of the reporting unit based on the present value of estimated future cash flows. Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital and tax rates. We also make certain forecasts about future

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economic conditions, interest rates, market data, and other observable trends, such as comparable store sales trends, recent changes in publisher relationships, and development of innovative digital products and services in the rapidly changing education landscape. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows. Under the market approach, we estimate the fair value based on market multiples of cash flows and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit and considering a reasonable control premium.

Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Changes in assumptions or estimates could materially affect the estimate of the fair value, and therefore could affect the likelihood and amount of potential impairment. The following assumptions are significant to our evaluation process:

Business Projections- We make assumptions about the level of revenues, gross profit, operating expenses, as well as capital expenditures and net working capital requirements. These assumptions drive our planning assumptions and represent key inputs for developing our cash flow projections. These projections are developed using our internal business plans over a five-year planning period that are updated at least annually;

Long-term Growth Rates- We also utilize an assumed long-term growth rate representing the expected rate at which our cash flow stream is projected to grow. These rates are used to calculate the terminal value and are added to the cash flows projected during our five-year planning period; and

Discount Rates- The estimated future cash flows are then discounted at a rate that is consistent with a weighted-average cost of capital that is likely to be expected by market participants. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.

Income Taxes

Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. FASB guidance on accounting for income taxes requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent we believe a portion will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience and expectations of future taxable income by taxing jurisdiction, the carryforward periods available to us for tax reporting purposes and other relevant factors. The actual realization of deferred tax assets may differ significantly from the amounts we have recorded.

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if available evidence indicates it is more likely than not that the tax position will be fully sustained upon review by taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, we do not recognize any portion of that benefit in the financial statements. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Our actual results could differ materially from our current estimates.

Recent Accounting Pronouncements

See Item 8. Financial Statements and Supplementary Data — Note 3. Recent Accounting Pronouncements for information related to new accounting pronouncements.

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We generally limit our interest rate risk by investing certain of our excess cash balances in short-term, highly-liquid instruments with an original maturity of one year or less. During Fiscal 2021, we did not have any invested cash balances. We do not expect any material losses from our invested cash balances and we believe that our interest rate exposure is modest. As of May 1, 2021, our cash and cash equivalents totaled approximately $8.0 million.

We may from time to time borrow money under the Credit Facility and FILO Facility at various interest rate options based on LIBOR or alternate base rate (each term as defined therein) depending upon certain financial tests. Accordingly, we may be exposed to interest rate risk on borrowings outstanding under the Credit Facility and FILO Facility. We had $177.6 million of borrowings outstanding under Credit Facility and FILO Facility as of May 1, 2021. A 25 basis point increase in interest rates or 25 basis point decrease in interest rates would affect interest expense by approximately less than $0.1 million in Fiscal 2021.

Effective April 28, 2019, we adopted Accounting Standards Codification ("ASC") Topic 842, Leases, and recognized lease assets and lease liabilities on the consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments. 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. A 25 basis point increase in the rate or 25 basis point decrease in the rate would not have materially affected the present value of future lease payments.

Foreign Currency Risk

We do not have any material foreign currency exposure as nearly all of our business is transacted in United States currency.

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Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENT INDEX
			Page No.
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on the consolidated financial statements of Barnes & Noble Education, Inc. for the years ended May 1, 2021, May 2, 2020, and April 27, 2019			55
Consolidated Statements of Operations for the years ended May 1, 2021, May 2, 2020, and April 27, 2019			57
Consolidated Balance Sheets as of May 1, 2021 and May 2, 2020			58
Consolidated Statements of Cash Flows for the years ended May 1, 2021, May 2, 2020, and April 27, 2019			59
Consolidated Statements of Equity for the years ended May 1, 2021, May 2, 2020, and April 27, 2019			60
Notes to Consolidated Financial Statements
	Note 1.	Organization	61
	Note 2.	Summary of Significant Accounting Policies	62
	Note 3.	Recent Accounting Pronouncements	70
	Note 4.	Revenue	70
	Note 5.	Segment Reporting	72
	Note 6.	Equity and Earnings Per Share	75
	Note 7.	Fair Value Measurements	76
	Note 8.	Credit Facility	77
	Note 9.	Leases	78
	Note 10.	Supplementary Information	79
	Note 11.	Related Party Transactions	80
	Note 12.	Employees Benefit Plans	80
	Note 13.	Long-Term Incentive Compensation Expense	80
	Note 14.	Income Taxes	84
	Note 15.	Legal Proceedings	86
	Note 16.	Commitments and Contingencies	87
Financial Statement Schedule
	Schedule II Valuation and Qualifying Accounts		88

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Barnes & Noble Education, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Barnes & Noble Education, Inc. and subsidiaries (the Company) as of May 1, 2021 and May 2, 2020, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended May 1, 2021 and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 1, 2021 and May 2, 2020, and the results of its operations and its cash flows for each of the three years in the period ended May 1, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of May 1, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated June 30, 2021 expressed an unqualified opinion thereon.

Adoption of Accounting Standards Update (ASU) No. 2016-02

As discussed in Note 2 to the consolidated financial statements, the Company changed its method for accounting for leases in the fiscal year ended May 2, 2020 due to the adoption of ASU 2016-02, Leases and associated amendments (Topic 842), using the modified retrospective approach.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee of the Company’s board of directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

	Non-Returnable Inventory Reserve
Description of the Matter	As described in Note 2 to the consolidated financial statements, the Company reserves for non-returnable inventory based on its history of liquidating non-returnable inventory.
	Auditing management’s estimate of the reserves for non-returnable inventory involved especially subjective auditor judgment as such estimates are based on various factors that are affected by current and future market and economic conditions. In particular, the reserve calculations are sensitive to certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

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How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's inventory reserve process, including management’s review controls over the determination of significant assumptions and the data underlying the calculations of the inventory reserves.
	Our procedures included, among others, evaluating the significant assumptions, identified above, and testing the accuracy and completeness of the underlying data used in management’s inventory reserve calculation. We recalculated the reserve using management’s methodology and assumptions, and we evaluated the methodology and the significant assumptions for reasonableness by comparing them to the related actual historical activity and expected future market and economic conditions. We also analyzed the impact of reasonable changes to the significant assumptions on the recorded inventory reserves.
	Long-Lived Asset Impairment
Description of the Matter	As described in Note 2 to the consolidated financial statements, the Company tests its long-lived assets for impairment if an event occurs or circumstances change that would indicate the carrying amount may not be recoverable. If the carrying amount of a long-lived asset (group) exceeds its fair value, the asset (group) is written down to its fair value and an impairment charge is recognized. During the fiscal year 2021, the Company recognized an impairment charge of $27.6 million related to long-lived assets at certain of its stores.
	Auditing the Company's impairment of store long-lived assets was complex and highly judgmental due to the significant estimation required to determine recoverability of each asset group and to determine the fair value of asset groups that were not recoverable, as well as the fair values of certain operating right-of-use assets included within the asset groups that were not recoverable. The significant assumptions used included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value. Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate. These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the store long-lived assets impairment process, including controls over the determination of the undiscounted projected cash flows of the stores with indicators of impairment, the fair values of the stores with carrying values that were not recoverable and the fair values of operating right-of-use assets within those stores. We also tested controls over management’s review of the significant assumptions described above.
	Our testing of the Company's impairment analysis included, among other procedures, evaluating the significant assumptions described above and the operating data used to calculate the estimated future cash flows of the stores and to determine fair values. We tested the completeness and accuracy of the data used by the Company in its analysis. We also compared the significant assumptions used to determine the projected cash flows to historical operating results of the stores, management’s expectations related to recovery from the pandemic and published third-party information regarding overall college and university enrollment trends; and, we obtained an understanding of the business initiatives supporting the assumptions used to estimate the future cash flows through inquiries of management and inspection of internal and external communications. We involved our internal valuation specialists to assist in evaluating the calculation of the fair values of certain operating lease right-of-use assets, which included assessing the reasonableness of the methodology utilized to determine market rental rates and evaluating the applied discount rate.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2015.

Iselin, New Jersey

June 30, 2021

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except per share data)

 

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Sales:
Product sales and other	$	1,299,740	$	1,671,200	$	1,838,760
Rental income	134,150		179,863		195,883
Total sales	1,433,890		1,851,063		2,034,643
Cost of sales:
Product and other cost of sales	1,093,989		1,303,702		1,395,339
Rental cost of sales	87,240		104,812		111,578
Total cost of sales	1,181,229		1,408,514		1,506,917
Gross profit	252,661		442,549		527,726
Selling and administrative expenses	338,280		404,472		423,880
Depreciation and amortization expense	52,967		61,860		65,865
Impairment loss (non-cash)	27,630		433		57,748
Restructuring and other charges	9,960		18,567		7,233
Transaction costs	—		—		654
Operating loss	(176,176)		(42,783)		(27,654)
Interest expense, net	8,087		7,445		9,780
Loss before income taxes	(184,263)		(50,228)		(37,434)
Income tax benefit	(52,476)		(11,978)		(13,060)
Net loss	$	(131,787)	$	(38,250)	$	(24,374)
Loss per share of Common Stock
Basic	$	(2.65)	$	(0.80)	$	(0.52)
Diluted	$	(2.65)	$	(0.80)	$	(0.52)
Weighted average shares of Common Stock outstanding:
Basic	49,669		48,013		47,306
Diluted	49,669		48,013		47,306

See accompanying notes to consolidated financial statements.

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Consolidated Balance Sheets

(In thousands, except per share data) 

	As of
	May 1, 2021		May 2, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	8,024	$	8,242
Receivables, net	121,072		90,851
Merchandise inventories, net	281,112		428,939
Textbook rental inventories	28,692		40,710
Prepaid expenses and other current assets	61,933		16,177
Total current assets	500,833		584,919
Property and equipment, net	89,172		97,739
Operating lease right-of-use assets	240,456		250,837
Intangible assets, net	150,904		175,125
Goodwill	4,700		4,700
Deferred tax assets, net	23,248		7,805
Other noncurrent assets	29,105		35,307
Total assets	$	1,038,418	$	1,156,432
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	137,578	$	143,678
Accrued liabilities	92,871		95,420
Current operating lease liabilities	92,513		92,571
Short-term borrowings	50,000		75,000
Total current liabilities	372,962		406,669
Long-term operating lease liabilities	184,780		186,142
Other long-term liabilities	52,042		46,170
Long-term borrowings	127,600		99,700
Total liabilities	737,384		738,681
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, 53,327 and 52,140 shares, respectively; outstanding, 51,379 and 48,298 shares, respectively	533		521
Additional paid-in capital	734,257		732,958
Accumulated deficit	(414,614)		(282,827)
Treasury stock, at cost	(19,142)		(32,901)
Total stockholders' equity	301,034		417,751
Total liabilities and stockholders' equity	$	1,038,418	$	1,156,432

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

(In thousands) 

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Cash flows from operating activities:
Net loss	$	(131,787)	$	(38,250)	$	(24,374)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization expense	52,967		61,860		65,865
Impairment loss (non-cash)	27,630		433		57,748
Merchandise inventory loss and write-off	14,960		—		—
Content amortization expense	5,034		4,082		1,096
Amortization of deferred financing costs	1,112		1,095		1,550
Deferred taxes	(15,443)		(5,380)		(4,531)
Stock-based compensation expense	5,095		6,638		9,017
Changes in operating lease right-of-use assets and liabilities	(4,367)		18,399		—
Changes in other long-term assets and liabilities and other, net	9,238		947		(5,340)
Changes in other operating assets and liabilities, net	68,443		(58,500)		20,760
Net cash flows provided by (used in) operating activities	32,882		(8,676)		121,791
Cash flows from investing activities:
Purchases of property and equipment	(37,223)		(36,192)		(46,420)
Acquisition of business, net of cash and restricted cash acquired	—		—		(10,000)
Changes in other noncurrent assets and other	348		(827)		800
Net cash flows used in investing activities	(36,875)		(37,019)		(55,620)
Cash flows from financing activities:
Proceeds from borrowings under Credit Agreement	722,600		600,900		521,200
Repayments of borrowings under Credit Agreement	(719,700)		(559,700)		(584,100)
Payment of deferred financing costs	(1,076)		—		(3,395)
Sale of treasury shares	10,869		—		—
Purchase of treasury shares	(894)		(1,265)		(1,977)
Net cash flows provided by (used in) financing activities	11,799		39,935		(68,272)
Net increase (decrease) in cash, cash equivalents, and restricted cash	7,806		(5,760)		(2,101)
Cash, cash equivalents, and restricted cash at beginning of period	9,008		14,768		16,869
Cash, cash equivalents, and restricted cash at end of period	$	16,814	$	9,008	$	14,768
Changes in other operating assets and liabilities, net:
Receivables, net	$	(30,221)	$	7,320	$	1,814
Merchandise inventories	132,867		(8,617)		23,237
Textbook rental inventories	12,018		6,291		778
Prepaid expenses and other current assets	(37,492)		(4,399)		69
Accounts payable and accrued liabilities	(8,729)		(59,095)		(5,138)
Changes in other operating assets and liabilities, net	$	68,443	$	(58,500)	$	20,760
Supplemental cash flow information:
Cash paid during the period for:
Interest paid	$	6,778	$	6,796	$	8,589
Income taxes paid (net of refunds)	$	6,008	$	(4,141)	$	10,277

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Equity

(In thousands)

				Additional
	Common Stock			Paid-In		Accumulated		Treasury Stock			Total
	Shares	Amount		Capital		Deficit		Shares	Amount		Equity
Balance at April 28, 2018	50,032	$	501	$	717,323	$	(220,203)	3,115	$	(29,658)	$	467,963
Stock-based compensation expense				9,017							9,017
Vested equity awards	998	9		(9)							—
Shares repurchased for tax withholdings for vested stock awards								352	(1,978)		(1,978)
Net loss						(24,374)					(24,374)
Balance at April 27, 2019	51,030	$	510	$	726,331	$	(244,577)	3,467	$	(31,636)	$	450,628
Stock-based compensation expense				6,638							6,638
Vested equity awards	1,110	11		(11)							—
Shares repurchased for tax withholdings for vested stock awards								375	(1,265)		(1,265)
Net loss						(38,250)					(38,250)
Balance at May 2, 2020	52,140	$	521	$	732,958	$	(282,827)	3,842	$	(32,901)	$	417,751
Stock-based compensation expense				5,095							5,095
Vested equity awards	1,187	12		(12)							—
Sale of treasury shares				(3,784)				(2,308)	14,653		10,869
Shares repurchased for tax withholdings for vested stock awards								414	(894)		(894)
Net loss						(131,787)					(131,787)
Balance at May 1, 2021	53,327	$	533	$	734,257	$	(414,614)	1,948	$	(19,142)	$	301,034

See accompanying notes to consolidated financial statements.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

Unless the context otherwise indicates, references in these Notes to the accompanying consolidated financial statements to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education, 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. References to “Student Brands” refer to our direct-to-student subscription-based writing services business operated through our subsidiary Student Brands, LLC.

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 1,417 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omni channel 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 Fanatics 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 our partnership with Fanatics Retail Group Fulfillment, LLC, Inc. and Fanatics Lids College, Inc. (collectively referred to herein as 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 and Part II - Item 8. Financial Statements and Supplementary Data - Note 5. Segment Reporting.

Partnership with Fanatics and FLC

In December 2020, we entered into a new merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”). 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 merchandising partnership agreement, we closed on the sale of our logo and emblematic general merchandise inventory to FLC. As the logo and emblematic general merchandise sales are fulfilled by FLC and Fanatics, we

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Notes to Consolidated Financial Statements - Continued

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

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.

COVID-19 Business Impact

During Fiscal 2021 and the fourth quarter of Fiscal 2020, our business was 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 COVID-19 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, 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 to determine when our operations can begin returning to normal levels of business. Please see our Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Other Long-Lived Assets related to the impairment loss (non-cash) recognized during Fiscal 2021.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

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”). In the opinion of the Company’s management, the accompanying 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.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended May 1, 2021 (“Fiscal 2021”), 53 weeks ended May 2, 2020 (“Fiscal 2020”), and 52 weeks ended April 27, 2019 (“Fiscal 2019”).

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. 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.

As discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of the COVID-19 pandemic on our operations affects the comparability of our results of operations and cash flows.

Consolidation

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.

Acquisition - PaperRater

On August 21, 2018, we acquired the assets of PaperRater in the DSS Segment. PaperRater is a leading website that offers students a suite of writing services aimed at improving multiple facets of writing. PaperRater's services include plagiarism detection, grammar feedback, and an AI-based writing score predictor, and are highly complementary to Student Brands' existing writing service offerings. PaperRater adds millions of pieces of content, from essays and dissertations to personal narratives and speeches, to our growing digital content library.

We completed the purchase for cash consideration of $10,000 and the transaction was funded from cash on-hand and availability under our existing Credit Agreement. The final purchase price was allocated primarily as follows: $5,300 intangible assets (primarily content with an estimated useful life of 5 years) and $4,700 goodwill. This acquisition is not material to our

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Notes to Consolidated Financial Statements - Continued

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

consolidated financial statements and therefore, disclosure of pro forma financial information has not been presented. The results of operations reflect the period of ownership of the acquired business.

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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

We consider all short-term, highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Restricted Cash

As of May 1, 2021, we had restricted cash of $8,790, comprised of $7,893 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to FLC for logo merchandise sales as per the merchandising partnership agreement and $897 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization.

As of May 2, 2020, we had restricted cash of $766 included in other noncurrent assets in the consolidated balance sheet for amounts held in trust for future distributions related to employee benefit plans.

Accounts Receivable

Receivables represent customer, private and public institutional and government billings (colleges, universities and other financial aid providers), credit/debit card receivables, advances for book buybacks, advertising and other receivables due within one year. Components of accounts receivables are as follows:

	As of
	May 1, 2021		May 2, 2020
Trade accounts	$	99,583	$	75,702
Advances for book buybacks	2,901		766
Credit/debit card receivables	4,433		2,177
Other receivables	14,155		12,206
Total receivables, net	$	121,072	$	90,851

Accounts receivable are presented on our consolidated balance sheets net of allowances. An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historical trends, the financial condition of our customers and an evaluation of economic conditions. We write-off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer. Allowance for doubtful accounts were $3,594, and $1,986 as of May 1, 2021 and May 2, 2020, respectively.

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. There were no LIFO adjustments in Fiscal 2021, Fiscal 2020 and Fiscal 2019.

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Notes to Consolidated Financial Statements - Continued

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

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. The Retail Segments four largest suppliers, excluding the supply sourced from our Wholesale Segment, accounted for approximately 35% of our merchandise purchased during the 52 weeks ended May 1, 2021. For our Wholesale Segment, the four largest suppliers, excluding textbooks purchased from students at our Retail Segment's bookstores, accounted for approximately 32% of merchandise purchases during the 52 weeks ended May 1, 2021.

On April 4, 2021, as contemplated by the merchandising partnership agreement, we closed on the sale of 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 in the statement of operations for the Retail Segment. The final inventory purchase price will be determined during the first quarter of Fiscal 2022. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization.

During the 52 weeks ended May 1, 2021, we also recognized a merchandise inventory write-off of $4,698 in cost of goods sold in the statement of operations for the Retail Segment related to our initiative to exit certain product offerings and streamline/rationalize our overall non-logo general merchandise product assortment resulting from the centralization of our merchandising decision-making during the year.

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.

Cloud Computing Arrangements

We adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") effective April 28, 2019 (first day of Fiscal 2020) prospectively for all implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract. The guidance requires implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract to be amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. Prior to adoption, we capitalized certain implementation costs, primarily related to digital and consumer data platforms, to property and equipment on the consolidated balance sheets and depreciated these implementation costs to depreciation and amortization expense in the consolidated statement of operations over the term of the service contract once the asset was ready for its intended use. Subsequent to adoption, implementation costs which were previously capitalized and depreciated as described above, are included in prepaid expenses and other assets in the consolidated balance sheets and amortized to selling and administrative expense in the consolidated statement of operations. Implementation costs incurred in cloud computing arrangements reflected in prepaid and other assets in the consolidated balance sheets were $10,516 and $4,262 as of May 1, 2021 and May 2, 2020, respectively. We had $283, $96, and $0 of amortization of implementation costs in selling and administrative expense in the consolidated statement of operations, for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over estimated useful lives. Maintenance and repairs are expensed as incurred, however major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. We had $35,024, $42,550, and $44,550, of depreciation expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Content development costs are primarily related to bartleby.com textbook solutions which was launched in Fiscal 2019. Content amortization is computed using the straight-line method over estimated useful lives. Amortization of content development costs is recorded to cost of goods sold. We had $5,034, $4,082, and $1,096, of content amortization expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Components of property and equipment are as follows:

		As of
	Useful Life	May 1, 2021		May 2, 2020
Property and equipment:
Leasehold improvements	(a)	$	131,784	$	141,602
Machinery, equipment and display fixtures	3 - 5	247,979		246,447
Computer hardware and capitalized software costs	(b)	152,941		145,764
Office furniture and other	2 - 7	62,031		62,209
Content development costs	3 - 5	25,526		16,729
Construction in progress		4,444		3,878
Total property and equipment		624,705		616,629
Less accumulated depreciation and amortization		535,533		518,890
Total property and equipment, net		$	89,172	$	97,739

(a)     Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from 1 - 15 years.

(b)     System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 2 - 5 years.

Intangible Assets

Amortizable intangible assets as of May 1, 2021 and May 2, 2020 are as follows:

		As of May 1, 2021
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	9 - 13	$	263,168	$	(122,565)	$	140,603
Content	1 - 2	19,400		(13,495)		5,905
Technology	1	9,500		(7,500)		2,000
Other (a)	1 - 7	8,930		(6,534)		2,396
		$	300,998	$	(150,094)	$	150,904

		As of May 2, 2020
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	10 - 14	$	271,800	$	(113,280)	$	158,520
Content	2 - 3	19,400		(9,615)		9,785
Technology	2	9,500		(5,900)		3,600
Other (a)	1 - 8	8,930		(5,710)		3,220
		$	309,630	$	(134,505)	$	175,125

(a)    Other consists of recognized intangibles for non-compete agreements, trade names, and favorable leasehold interests.

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Notes to Consolidated Financial Statements - Continued

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

All amortizable intangible assets are being amortized over their useful life on a straight-line basis.

Aggregate Amortization Expense:
For the 52 weeks ended May 1, 2021	$	17,943
For the 53 weeks ended May 2, 2020	$	19,310
For the 52 weeks ended April 27, 2019	$	21,314

Estimated Amortization Expense: (Fiscal Year)
2022	$	16,808
2023	$	13,429
2024	$	11,567
2025	$	11,210
2026	$	11,207
After 2026	$	86,683

For additional information about intangible assets, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

Leases

Effective April 28, 2019, we adopted Accounting Standards Codification ("ASC") Topic 842, Leases, and recognized lease assets and lease liabilities on the consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments. 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.

As a result of adopting ASC Topic 842, we recorded an initial operating lease right-of-use asset of $277,006 (inclusive of prepaid assets and accrued liabilities related to existing leases) and an operating lease liability of $294,727 as of April 28, 2019 for all leases that were not completed and with lease terms in excess of twelve months at that date. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

Impairment of Long-Lived Assets

As of May 1, 2021, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $89,172, $240,456, $150,904, and $29,105, respectively, on our consolidated balance sheet. As of May 2, 2020, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $97,739, $250,837, $175,125, and $35,307, respectively, on our consolidated balance sheet.

These amortizable intangible assets relate primarily to our customer and bookstore relationships with our colleges and university clients, and technology acquired. For additional information related to amortizable intangibles, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Intangible Assets.

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 and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning models and on-campus activities during the Spring semester of Fiscal 2021. Many of the trends observed during the Fall 2020 semester continued into the Spring 2021 semester, as fewer students have returned to campus for the Spring semester, many colleges and universities continued with remote learning models and on-campus classes and activities

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

have been further curtailed, including many athletic conferences that have been either eliminated or severely restricted. These combined events impacted the Company’s course materials and general merchandise business. During the third quarter of Fiscal 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, comprised of $5,085, $13,328, $6,278 and $2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations. The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations. The significant assumptions used in the income approach included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value. Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 7. Fair Value Measurements.

In the first quarter of Fiscal 2020, we recorded an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable. During the fourth quarter of Fiscal 2020, in conjunction with COVID-19 related campus store closures, we evaluated certain of our long-lived assets associated with our Retail and Wholesale segments for impairment. Based on the results of the tests, for the Retail segment, we recognized an impairment loss of $587 related to store-level assets in restructuring and other charges. These long-lived assets were not recoverable and had a de minimis fair value, as determined using an income approach (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets.

During the fourth quarter of Fiscal 2019, in conjunction with the change to reporting segments and the interim goodwill impairment test noted below, as well as operational changes in certain long-lived asset groups, we evaluated certain of our long-lived assets for impairment and recognized an impairment loss of $8,466, comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations. These long-lived assets were not recoverable and had a de minimis fair value, as determined using the relief-from-royalty and income approaches (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Significant Accounting Policies - Intangible Assets.

Goodwill

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets. 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. As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

During the third quarter of both Fiscal 2021 and Fiscal 2020, we completed our annual goodwill impairment test and concluded that 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.

During the third quarter of Fiscal 2019, we completed our annual goodwill impairment test and concluded that the fair value of the MBS and DSS reporting units, as they existed at that time, each exceeded their respective carrying values and no goodwill impairment was recognized. In the fourth quarter of Fiscal 2019, due to the change in our reporting units identified as a result of the change in our reportable segments, we recognized a total goodwill impairment (non-cash impairment loss) of $49,282 associated with the MBS reporting unit (as it existed at that date) and allocated $20,538 of goodwill to the Retail Segment and $28,744 of goodwill to the Wholesale Segment.

As of May 1, 2021, goodwill of approximately $67,015 was deductible for federal income tax purposes. This is higher than the goodwill balance reflected on the consolidated balance sheet as of May 1, 2021 due to impairment losses recorded in Fiscal 2018 and Fiscal 2019.

Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; and the determination of the fair value of each reporting unit. In performing the valuation, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions.

We estimated the fair value of our reporting units using a weighting of fair values derived from the income approach.

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Notes to Consolidated Financial Statements - Continued

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

Under the income approach, we calculate the fair value of the reporting unit based on the present value of estimated future cash flows. Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital and tax rates. We also make certain forecasts about future economic conditions, interest rates, market data, and other observable trends, such as comparable store sales trends, recent changes in publisher relationships, and development of innovative digital products and services in the rapidly changing education landscape. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows.

Refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates for a discussion of key assumptions used in our testing.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sales 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 Part II - Item 8. Financial Statements and Supplementary Data - Note 4. 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 per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis.

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.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

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 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.

Long-Term Incentive Compensation

We have granted awards in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan (the “Equity Incentive Plan”). Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock, restricted stock units, performance shares, performance share units, and phantom share units. See Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense for additional information regarding expense recognition for each type of award.

Advertising Costs

The costs of advertising are expensed as incurred during the year pursuant to ASC No. 720-35, Advertising Costs. Advertising costs charged to selling and administrative expenses were $12,916, $10,349, and $10,636 in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 14. Income Taxes.

As of May 1, 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

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

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.

Note 3. Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU replaces the existing incurred loss impairment model for trade receivables with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates. These changes may result in earlier recognition of credit losses. We adopted this guidance during the first quarter of Fiscal 2021 with no cumulative-effect adjustment to retained earnings.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The guidance seeks to simplify the accounting for income taxes by removing the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance seeks to further simplify the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. We adopted ASU 2019-12 during the third quarter of Fiscal 2021. As a result of adopting this standard, we did not record a cumulative adjustment and there was not a material impact on our consolidated financial statements.

Note 4. 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 5. Segment Reporting for a description of each segment's product and service offerings.

See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Pronouncements for additional information related to our revenue recognition policies and Part II - Item 8. Financial Statements and Supplementary Data - Note 5. Segment Reporting for a description of each segments product and service offerings.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Disaggregation of Revenue

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Retail
Product Sales	$	1,157,115	$	1,493,044	$	1,645,357
Rental Income	134,150		179,863		195,883
Service and Other Revenue (a)	39,205		39,985		47,768
Retail Total Sales	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale Sales	$	165,825	$	198,353	$	223,374
DSS Sales (b)	$	27,374	$	23,661	$	21,339
Eliminations (c)	$	(89,779)	$	(83,843)	$	(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643

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

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

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

Effective April 4, 2021, as per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis.

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 both May 1, 2021 and May 2, 2020 on our 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 merchandising contracts for Fanatics and FLC as discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Partnership with Fanatics and FLC and Note 6. Equity and Earnings Per Share - Sale of Treasury Shares.

Deferred revenue of $13,469 and $4,670 is recorded within accrued liabilities and other long-term liabilities on our consolidated balance sheet, respectively, as of May 1, 2021 and $13,373 is recorded within accrued liabilities on our consolidated balance sheet as of May 2, 2020.

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Notes to Consolidated Financial Statements - Continued

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

The following table presents changes in contract liabilities during the fiscal year ended May 1, 2021:

Deferred revenue as of April 27, 2019	$	20,418
Additions to deferred revenue during the period	193,235
Reductions to deferred revenue for revenue recognized during the period	(200,280)
Deferred revenue balance as of May 2, 2020	$	13,373
Additions to deferred revenue during the period	171,834
Reductions to deferred revenue for revenue recognized during the period	(167,068)
Deferred revenue balance as of May 1, 2021	$	18,139

As of May 1, 2021 we expect to recognize $13,469 of the deferred revenue balance within in the next 12 months.

Note 5. 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 this segments operations, see Part I - Item 1. Business.

Retail Segment

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical bookstores and 648 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 3,300 physical bookstores (including our Retail Segment's 769 physical bookstores) and sources and distributes new and used textbooks to our 648 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 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

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.

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Notes to Consolidated Financial Statements - Continued

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

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.

	As of
	May 1, 2021		May 2, 2020
Total Assets
Retail	$	800,012	$	867,288
Wholesale	199,698		248,464
DSS	33,937		35,689
Corporate Services	4,771		4,991
Total Assets	$	1,038,418	$	1,156,432

As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Capital Expenditures
Retail	$	21,208	$	28,546	$	33,008
Wholesale	5,905		2,126		1,824
DSS (a)	9,662		5,425		11,444
Corporate Services	448		95		144
Total Capital Expenditures	$	37,223	$	36,192	$	46,420

(a) Primarily comprised of content development costs for bartleby.com textbook solutions which was launched in Fiscal 2019.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Summarized financial information for our reportable segments is reported below:

	52 weeks ended May 1, 2021 (a)		53 weeks ended May 2, 2020 (a)		52 weeks ended April 27, 2019
Sales:
Retail	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale	165,825		198,353		223,374
DSS	27,374		23,661		21,339
Eliminations	(89,779)		(83,843)		(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643
Gross Profit
Retail (b)	$	195,617	$	383,282	$	451,871
Wholesale	34,683		39,805		56,341
DSS	22,318		19,313		20,030
Eliminations	43		149		(516)
Total Gross Profit	$	252,661	$	442,549	$	527,726
Depreciation and Amortization
Retail	$	39,634	$	47,099	$	51,728
Wholesale	5,461		5,963		6,014
DSS	7,763		8,670		7,974
Corporate Services	109		128		149
Total Depreciation and Amortization	$	52,967	$	61,860	$	65,865
Operating Loss
Retail (c)	$	(154,592)	$	(24,445)	$	3,751
Wholesale (c)	14,732		12,909		(2,131)
DSS	(8,132)		(8,529)		(3,345)
Corporate Services	(28,376)		(23,077)		(25,463)
Eliminations	192		359		(466)
Total Operating Loss (c)	$	(176,176)	$	(42,783)	$	(27,654)
The following is a reconciliation of segment Operating Loss to consolidated Income Before Income Taxes
Total Operating Loss	$	(176,176)	$	(42,783)	$	(27,654)
Interest Expense, net	(8,087)		(7,445)		(9,780)
Total Loss Before Income Taxes	$	(184,263)	$	(50,228)	$	(37,434)

(a)In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)In Fiscal 2021, gross margin includes a merchandise inventory loss and write-off of $14,960 in the Retail Segment. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

(c)In Fiscal 2021, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, in the Retail segment related to certain of our store-level long-lived assets. In Fiscal 2020, we recorded an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which were not recoverable. In Fiscal 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill ($20,538 and $28,744 in our Retail and Wholesale Segments, respectively).and $8,466 of long-lived assets. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Note 6. Equity and Earnings Per Share

Equity

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of May 1, 2021, 51,378,913 shares of our common stock and 0 shares of our preferred stock were issued and outstanding. Our common stock trades on the NYSE under the symbol “BNED”.

The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of shares of our common stock do not have cumulative voting rights in the election of directors. The holders of our common stock will be entitled to share ratably in our assets legally available for distribution to our stockholders, subject to the prior distribution rights of preferred stock, if any, then outstanding. The holders of our common stock do not have preemptive rights or preferential rights to subscribe for shares of our capital stock.

We have reserved 10,409,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. See Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense.

Repurchase of Shares

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 Fiscal 2021, 2020, and Fiscal 2019, we did not purchase shares under the stock repurchase program. As of May 1, 2021, approximately $26,669 remains available under the stock repurchase program.

During the Fiscal 2021, Fiscal 2020, and Fiscal 2019, we also repurchased 414,174, 374,733 shares, and 351,043 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

Sale of Treasury Shares

In December 2020, we entered into a new merchandising partnership with Fanatics and FLC which included a strategic equity investment in the Company. Fanatics, Inc. and Lids Holdings, Inc. jointly purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $15,000, representing a share price of $6.50 per share. The premium price paid above the fair market value of our common stock at closing was approximately $4,131 and was recorded as a contract liability ($175 in accrued liabilities and $3,956 in other long-term liabilities our consolidated balance sheet) which is expected to be recognized over the term of the merchandising contracts for Fanatics and FLC, as discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Partnership with Fanatics and FLC.

Dividends

We paid no other dividends to common stockholders during Fiscal 2021, Fiscal 2020 and Fiscal 2019. We do not intend to pay dividends on our common stock in the foreseeable future.

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 Fiscal 2021, Fiscal 2020 and Fiscal 2019, average shares of 3,387,185, 3,795,603, and 2,939,089, respectively, were excluded from the diluted earnings per share calculation using the two-class method as their inclusion would have been antidilutive.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

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

(shares in thousands)	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(131,787)	$	(38,250)	$	(24,374)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	49,669		48,013		47,306
Loss per share of Common Stock:
Basic and diluted loss per share of Common Stock	$	(2.65)	$	(0.80)	$	(0.52)

 

Note 7. Fair Values 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 and Liabilities

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.

During the 52 weeks ended May 1, 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, on the consolidated statement of operations. The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using our best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

During the 53 weeks ended May 2, 2020, we recognized an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable.

During the 52 weeks ended April 27, 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill and $8,466 of long-lived assets, comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations.

For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

The following table shows the fair values of our non-financial assets and liabilities that were required to be remeasured at fair value on a non-recurring basis and the total impairments recorded as a result of the remeasurement process:

	52 weeks ended May 1, 2021						53 weeks ended May 2, 2020
	Carrying Value Prior to Impairment		Fair Value		Impairment Loss (non-cash)		Carrying Value Prior to Impairment		Fair Value		Impairment Loss (non-cash)
Receivables, net	$	—	$	—	$	—	$	245	$	—	$	245
Property and equipment, net	5,505		420		5,085		300		—		300
Operating lease right-of-use assets	26,427		13,099		13,328		—		—		—
Intangible assets, net	7,723		1,445		6,278		—		—		—
Other noncurrent assets	3,539		600		2,939		—		—		—
Accrued liabilities	—		—		—		(112)		—		(112)
Total	$	43,194	$	15,564	$	27,630	$	433	$	—	$	433

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 May 1, 2021, we recorded a liability of $3,845 (Level 2 input) which is reflected in accrued liabilities ($2,509) and other long-term liabilities ($1,336) on the consolidated balance sheet. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense.

Note 8. 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.

During the 52 weeks ended May 1, 2021, we borrowed $722,600 and repaid $719,700 under the Credit Agreement, and had outstanding borrowings of $127,600 and $50,000 under the Credit Facility and FILO Facility, respectively, as of May 1, 2021. During the 53 weeks ended May 2, 2020, we borrowed $600,900 and repaid $559,700 under the Credit Agreement, and had outstanding borrowings of $99,700 and $75,000 under the Credit Facility and FILO Facility, respectively, as of May 2, 2020. During 52 weeks ended April 27, 2019, we borrowed $521,200 and repaid $584,100 under the Credit Agreement, and had outstanding borrowings of $33,500 and $100,000 under the Credit Facility and FILO Facility, respectively, as of April 27, 2019. As of both May 1, 2021 and May 2, 2020, we issued $4,759 in letters of credit under the Credit Facility, respectively.

During 52 weeks ended May 1, 2021, we incurred debt issuance costs totaling $1,076 related to the March 31, 2021 Credit Facility amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

Interest under the Credit Facility accrues, at our election, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the Credit Facility. Loans will initially bear interest at LIBOR plus 2.00% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 1.00% per annum, in the alternative, and thereafter the interest rate will fluctuate between LIBOR plus 2.00% per annum and LIBOR plus 1.50% per annum (or between the alternate base rate plus 1.00% per annum and the alternate base rate plus 0.50% per annum), based upon the excess availability under the Credit Facility at such time.

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Notes to Consolidated Financial Statements - Continued

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

Loans under the FILO Facility will bear interest at a rate equal to the LIBOR rate, plus 3.750%. In connection with the waiver, the applicable margin for credit extensions made under the FILO Facility after March 31, 2021 through the end of 2021 was increased by 0.50% (to 3.75% per annum for LIBO rate loans and 2.75% for base rate loans). The FILO Facility will be available solely during the draw period each year, from April 1 through July 31. We are required to borrow 100% of the aggregate commitments under the FILO Facility on April 1 of each year, and the loans must be repaid in full (including interest and fees) on July 31 of each year. The commitments under the FILO Facility will decrease from $50,000 to $25,000 on August 1, 2021. We will pay a commitment fee of 0.375% on the daily unused portion of the FILO Facility.

The Credit Facility contains customary negative covenants, which limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements and a minimum excess availability of the greater of 10% of the Loan Cap and $25,000 when the FILO is funded) would be triggered, and the lenders would have the right to assume dominion and control over the Company's cash. The Credit Facility includes an anti-cash hoarding provision, which limits maximum excess cash allowed to $50,000 when the FILO is funded.

The Credit Facility contains customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit Facility also contains customary affirmative covenants and representations and warranties. We are in compliance with all covenants, representations and warranties under the Credit Facility as of 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.

Note 9. Leases

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted FASB ASC 842, Leases (Topic 842), which required us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all lease arrangements. 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 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.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

The following table summarizes lease expense:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020
Variable lease expense	$	69,511	$	73,455
Operating lease expense	108,282		159,289
Net lease expense	$	177,793	$	232,744

The decrease in lease expense is primarily due to lower sales for contracts based on a percentage of revenue and the impact of the timing and reduction of minimum contractual guarantees.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of May 1, 2021:

	As of
	May 1, 2021
Fiscal 2022	$	99,657
Fiscal 2023	48,621
Fiscal 2024	40,506
Fiscal 2025	34,748
Fiscal 2026	27,045
Thereafter	70,234
Total lease payments	320,811
Less: imputed interest	(43,518)
Operating lease liabilities at period end	$	277,293

Future lease payment obligations related to leases that were entered into, but did not commence as of May 1, 2021, were not material.

The following summarizes additional information related to our operating leases:

	As of			As of
	May 1, 2021			May 2, 2020
Weighted average remaining lease term (in years)	5.5 years			5.2 years
Weighted average discount rate	4.9		%	4.6		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	111,167		$	140,670
ROU assets obtained in exchange for lease liabilities from initial recognition	$	123,556		$	131,175

Note 10. Supplementary Information

Impairment Loss (non-cash)

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. For information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

During the 52 weeks ended May 1, 2021, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, in the Retail segment comprised of $5,085, $13,328, $6,278 and $2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

During the 53 weeks ended May 2, 2020, we recognized an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable.

During the 52 weeks ended April 27, 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill ($20,538 and $28,744 in our Retail and Wholesale Segments, respectively).and $8,466 of long-lived assets,

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Notes to Consolidated Financial Statements - Continued

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

comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations.

Restructuring and Other Charges

During the 52 weeks ended May 1, 2021, we recognized restructuring and other charges totaling $9,960, comprised primarily of $5,888 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($3,246 is included in accrued liabilities in the consolidated balance sheet as of May 1, 2021), $5,213 for professional service costs related to restructuring, process improvements, the financial advisor strategic review process, costs related to development and integration associated with Fanatics and FLC partnership agreements and shareholder activist activities, and $454 related to liabilities for a facility closure, partially offset by a $1,595 in an actuarial gain related to a frozen retirement benefit plan (non-cash).

During the 53 weeks ended May 2, 2020, we recognized restructuring and other charges totaling $18,567 comprised of $12,667 for severance and other employee termination and benefit costs associated with several management changes ($10,370 is included in accrued liabilities in the consolidated balance sheet as of May 2, 2020), the elimination of various positions as part of cost reduction objectives, and professional service costs for process improvements, and $2,695 related to an actuarial loss for a frozen retirement benefit plan (non-cash), $2,841 for professional service costs for shareholder activist activities, and $587 related to a store-level asset impairment charge, offset by $223 related to reduction of liabilities for a facility closure.

During the 52 weeks ended April 27, 2019, we recognized restructuring and other charges totaling $7,233 comprised of $4,554 for severance and transition payments related to senior management changes, other employee termination and benefit costs, and other charges totaling $2,679, primarily comprised of $2,274 in an actuarial loss for a frozen retirement benefit plan (non-cash), $281 related to additional liabilities for a facility closure, and a write-off of $118 of existing unamortized debt issuance costs.

Note 11. Related Party Transactions

MBS Textbook Exchange, LLC

Prior to the acquisition of MBS on February 27, 2017, MBS was considered a related-party as it was majority-owned by Leonard Riggio, who is a principal owner holding substantial shares of our common stock, and other members of the Riggio family. Subsequent to the acquisition, the consolidated financial statements include the accounts of MBS and all material intercompany accounts and transactions have been eliminated in consolidation.

MBS leases its main warehouse and distribution facility located in Columbia, Missouri from MBS Realty Partners L.P. which is majority-owned by Leonard Riggio, with the remaining ownership by other sellers of MBS. The lease was originally entered into in 1991 and included a renewal option which extended the lease through September 1, 2023. Based upon a valuation performed as of the acquisition date, the lease was determined to be favorable from a lessee perspective with below market rent. Rent payments to MBS Realty Partners L.P. were approximately $1,380 in Fiscal 2021, Fiscal 2020 and Fiscal 2019.

Note 12. 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 $0, $5,015, and $6,702 during 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Effective April 2020, due to the significant impact as a result of COVID-19 related campus store closures, we have temporarily suspended employer matching contributions into our 401(k) plans through the end of Fiscal 2021.

Note 13. Long-Term Incentive Compensation Expense

We have reserved 10,409,345 shares of our common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and stock options.

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Notes to Consolidated Financial Statements - Continued

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

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.

Restricted Stock Awards

A RS award is an award of common stock that is subject to certain restrictions during a specified period. Restricted stock awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. Restricted stock awards will have a minimum vesting period of one year.

A RSU is a grant valued in terms of our common stock, but no stock is issued at the time of grant. Each restricted stock unit may be redeemed for one share of our common stock once vested. Restricted stock units are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). Restricted stock units generally vest over a period of three years, but will have a minimum vesting period of one year.

Performance Share Awards

PS awards and PSU awards were granted to employees. Each PS and PSU may be redeemed for one share of our common stock once vested and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the PS or PSU awards except in very limited circumstances and with the consent of the compensation committee. Shares of unvested PSU awards have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares or units, as the case may be, have vested). The PS and PSU awards will only vest based upon the achievement of pre-established performance goals related to Adjusted EBITDA, segment revenue, new business, and/or total shareholder return performance achieved over a period of time. The PS and PSU awards will vest based on company performance and/or market conditions during the subsequent two year period with one additional year of time-based vesting. The number of PS and PSU awards that will vest range from 0%-150% of the target award based on actual performance.

Stock Options

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. During Fiscal 2021, we granted 1,250,518 stock options with an exercise price of $2.46 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 1,250,518 stock options with an exercise price of $5.00 per stock option (Stock Option Grant #2) granted to employees. The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

The following summarizes the stock option fair value assumptions:

	Stock Option Grant #1			Stock Option Grant #2
Exercise Price	$	2.46		$	5.00
Valuation method utilized	Black-Scholes			Monte Carlo
Risk-free interest rate	0.27		%	0.68		%
Expected option term	6.2 years			10.0 years
Company volatility	73		%	73		%
Dividend yield	—		%	—		%
Grant date fair value per award	$	1.58		$	1.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. For Stock Option Grant #1, we are permitted to use the simplified approach to estimate the expected term of the stock options, which typically assumes exercise occurs at the mid-point between the end of the vesting period and the expiration date. The simplified approach is not allowed for premium-priced options (Stock Option Grant #2), which were estimated using a stock price multiple, as there is no option exercise history which to base an early exercise option. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term.

Phantom Shares

During Fiscal 2021, we granted 2,397,953 phantom share units granted to employees. Each phantom share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed three times the grant date stock price. The phantom shares vest and will be settled in three equal installments commencing one year after the date of grant. The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model.

The average fair value on the date of grant was determined based on using risk-free rates and annual volatility rates for each the three tranches within the respective grant as detailed in the table below based upon their vesting dates and remaining time to maturity. 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 of the respective awards. The following summarizes the phantom share fair value assumptions:

	Phantom Share Grant #1		Phantom Share Grant #2
Grant Date Stock Price	$	2.46	$	7.63
Stock Price Cap	$	7.38	$	22.89
Valuation method utilized	Black-Scholes		Black-Scholes
Grant Date Risk Free Rate Range	0.12% - 0.15%		0.07% - 0.31%
Grant Date Volatility Range	86% - 114%		90% - 110%
Average Grant date fair value per award	$	1.88	$	5.79

As of May 1, 2021, we recorded a liability of $3,845 (Level 2 input) of which $2,509 and $1,336 is reflected in accrued liabilities and other long-term liabilities on the consolidated balance sheet, respectively.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Long-Term Incentive Compensation Activity

The following table presents a summary of awards activity related to our current Equity Incentive Plan:

	Restricted Stock Awards			Restricted Stock Units			Performance Share Units
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	38,096	$	3.15	2,250,078	$	4.21	1,323,767	$	4.20
Granted	146,343	$	2.40	243,905	$	2.40	—	$	—
Vested	(38,096)	$	—	(1,210,566)	$	4.48	(138,060)	$	7.97
Forfeited (a)	—	$	—	(83,566)	$	4.18	(590,474)	$	5.34
Balance, May 1, 2021	146,343	$	2.40	1,199,851	$	3.56	595,233	$	2.23
	Stock Options			Phantom Shares
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	—	$	—	—	$	—
Granted	2,501,036	$	1.43	2,397,953	$	1.97
Exercised/Vested	—	$	—	—	$	—
Forfeited	(310,046)	$	1.43	(193,090)	$	1.88
Balance, May 1, 2021	2,190,990	$	1.43	2,204,863	$	1.97

(a) The PSUs forfeitures reflect a cumulative adjustment to reflect changes to the expected level of achievement of the respective grants.

Total fair value of vested share awards since the inception of the Equity Incentive Plan is $42,125.

Long-Term Incentive Compensation Expense

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Stock-based awards
Restricted stock expense	$	226	$	120	$	110
Restricted stock units expense	3,919		6,253		7,846
Performance shares expense (a)	—		12		87
Performance share units expense (a)	283		253		974
Stock option expense	667		—		—
Sub-total stock-based awards:	$	5,095	$	6,638	$	9,017
Cash settled awards
Phantom share units expense	$	3,845	$	—	$	—
Total compensation expense for long-term incentive awards	$	8,940	$	6,638	$	9,017

(a)     Long-term incentive compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants.

Total unrecognized compensation cost related to unvested awards as of May 1, 2021 was $11,099 and is expected to be recognized over a weighted-average period of 2.28 years.

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

Note 14. Income Taxes

For Fiscal 2021, Fiscal 2020, and Fiscal 2019, we had no material revenue or expense in jurisdictions outside the United States.

Impact of U.S. Tax Reform

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, among other provisions. In accordance with SAB 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118), we completed our accounting for the tax effects of the enactment of the Act within the provisional period as of April 27, 2019. We recorded measurement period adjustments during Fiscal 2019 to reduce our net deferred tax liability by $3,911, which primarily related to the acceleration of certain deductions as permitted by the U.S. tax code. The most significant impact of the legislation for the Company was a $20,425 reduction of the value of our net deferred (which represents future tax liabilities) and long-term tax liabilities as a result of lowering the U.S. corporate income tax rate from 35% to 21%, which was recorded in Fiscal 2018. We also recorded a liability associated with the one-time transition tax, however, such amount is not material.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”) was enacted. We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contribution and net operating loss limitations (“NOLs”), modifications to the deductibility of business interest expense, as well as Alternative Minimum Tax (“AMT”) credit acceleration. The most significant impact of the legislation for the Company was an income tax benefit of $7,164 for the carryback of NOLs to higher tax rate years, recorded in Fiscal 2021. As of May 1, 2021, we recognized a current income tax receivable for NOL carrybacks of $30,492 in prepaid and other current assets on the consolidate balance sheet.

Income tax benefits for Fiscal 2021, Fiscal 2020 and Fiscal 2019 are as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Current:
Federal	$	(36,187)	$	(5,471)	$	(6,494)
State	(846)		(1,127)		(2,035)
Total Current	(37,033)		(6,598)		(8,529)
Deferred:
Federal	(6,100)		(4,086)		(3,681)
State	(9,343)		(1,294)		(850)
Total Deferred	(15,443)		(5,380)		(4,531)
Total	$	(52,476)	$	(11,978)	$	(13,060)

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Federal statutory income tax rate (a)	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	4.4		3.7		6.3
Permanent book / tax differences	(0.9)		(2.9)		(3.9)
CARES Act NOL Carry-back	3.9		—		—
Provisional remeasurement due to Tax Legislation	—		—		10.4
Credits	—		0.5		0.3
Other, net	0.1		1.5		0.8
Effective income tax rate	28.5	%	23.8	%	34.9	%

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

The effective tax rate for Fiscal 2021 is significantly lower as compared to the comparable prior year period due to various permanent differences and the impact of the CARES Act recorded.

One percentage point on our Fiscal 2021 effective tax rate is approximately $1,843. The permanent book / tax differences are principally comprised of non-deductible compensation, non-deductible meals and entertainment costs, and federal income tax credits.

We account for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. The significant components of our deferred taxes consisted of the following:

	As of
	May 1, 2021		May 2, 2020
Deferred tax assets:
Estimated accrued liabilities	$	11,559	$	11,046
Inventory	8,073		7,167
Stock-based compensation	1,622		1,511
Insurance liability	505		528
Operating lease liabilities	65,456		65,334
Tax credits	433		484
Goodwill	16,759		18,438
Net operating losses	10,810		4,992
Other	10,570		8,853
Gross deferred tax assets	125,787		118,353
Valuation allowance	(1,202)		(1,231)
Net deferred tax assets	124,585		117,122
Deferred tax liabilities:
Intangible asset amortization	(33,547)		(37,864)
Operating lease right-of-use assets	(61,896)		(64,695)
Property and equipment	(5,894)		(6,758)
Gross deferred tax liabilities	(101,337)		(109,317)
Net deferred tax asset	$	23,248	$	7,805

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

As of May 1, 2021, we had $0 of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at April 28, 2018	$	97
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(6)
Balance at April 27, 2019	$	91
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(39)
Balance at May 2, 2020	$	52
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(52)
Balance at May 1, 2021	$	—

Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of May 1, 2021 and May 2, 2020, we had accrued $0 and $3, respectively, for net interest and penalties. The change in the amount accrued for net interest and penalties includes $3 in reductions for net interest and penalties recognized in income tax expense in our Fiscal 2021 consolidated statement of operations.

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. In evaluating our ability to utilize our deferred tax assets, we considered all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. We have recorded a valuation allowance of $1,202 and $1,231 for May 1, 2021 and May 2, 2020, respectively.

As of May 1, 2021, and based on our tax year ended January 2021, we had state net operating loss carryforwards (“NOLs”) of approximately $196,180 that are available to offset taxable income in our respective taxing jurisdiction beginning in the current period and that expire beginning in 2030. We had net state tax credit carryforwards totaling $548, which expire beginning in 2022.

As of May 2, 2021, we recorded $200 of foreign withholding tax related to repatriations of earnings from certain foreign subsidiaries. If additional earnings in these foreign subsidiaries were repatriated in the future, additional income and withholding tax expense would be incurred. Additional income and withholding tax expense on any future repatriated earnings is estimated to be less than $100.

We are subject to U.S. federal income tax, as well as income tax in jurisdictions of each state having an income tax. The tax years that remain subject to examination are primarily Fiscal 2015 and forward. Some earlier years remain open for a small minority of states. We retain an income tax liability for periods prior to the Spin-Off from Barnes & Noble, Inc. only for returns filed on a stand-alone basis.

Note 15. 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

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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

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

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 in the United States District Court for the District of Delaware, the United States District Court for the District of New Jersey, and the United States District Court for the Northern District of Illinois against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association. The plaintiffs are 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 has 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 October 16, 2020, three named student plaintiffs filed a Consolidated Amended Complaint, as did the retailer plaintiffs. The student plaintiffs and retailer plaintiffs each filed a Second Consolidated Amended Complaint on December 18, 2020, which all Defendants jointly moved to dismiss on January 22, 2021. On June 14, 2021, the Court ordered both cases dismissed with prejudice. Should Plaintiffs pursue an appeal, we intend to vigorously defend this matter. We are currently unable to estimate any potential losses.

Note 16. Commitments and Contingencies

We generally operate our physical bookstores pursuant to multi-year school management contracts under which a school designates us to operate the official school physical bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these service agreements for our physical bookstores under lease accounting. Prior to the adoption of FASB ASC 842, Leases (Topic 842) ("ASC 842") as discussed below, the excess of such minimum contract expense over actual contract payments (net of school allowances) was reflected in other long-term liabilities and accrued liabilities in the consolidated balance sheets.

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted ASC 842, which requires us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all fixed lease arrangements (excluding variable obligations) with a term greater than twelve months. For additional information on lease expense and minimum fixed lease obligations, excluding variable commissions, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

The expense related to our college and university contracts for physical bookstores, including rent expense, and other facility costs in the consolidated statements of operations for periods prior to adoption of ASC 842 in Fiscal 2020 are as follows: 

	52 weeks ended April 27, 2019
Minimum contract expense	$	169,131
Percentage contract expense	73,368
Total expense	$	242,499

Purchase obligations, which includes information technology contracts and inventory purchase commitments, as of May 1, 2021 are as follows: 

Less Than 1 Year	$	14,756
1-3 Years	10,994
3-5 Years	538
Total	$	26,288

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Schedule II—Valuation and Qualifying Accounts

Receivables Valuation and Qualifying Accounts

(In thousands)

For the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019:

	Balance at beginning of period		Charge (recovery) to costs and expenses		Write-offs		Balance at end of period
Allowance for Doubtful Accounts
May 1, 2021	$	1,986	$	4,600	$	(2,992)	$	3,594
May 2, 2020	$	2,135	$	1,710	$	(1,859)	$	1,986
April 27, 2019	$	2,083	$	2,670	$	(2,618)	$	2,135
	Balance at beginning of period		Addition Charged to Costs		Deductions		Balance at end of period
Sales Returns Reserves
May 1, 2021	$	5,063	$	145,595	$	(147,327)	$	3,331
May 2, 2020	$	5,282	$	186,305	$	(186,524)	$	5,063
April 27, 2019	$	5,229	$	197,799	$	(197,746)	$	5,282

All other schedules are omitted because the conditions requiring their filing do not exist, or because the required information is provided in the consolidated financial statements, including the notes thereto.

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Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 There were no disagreements with accountants on accounting and financial disclosure.

Item 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Management of the Company established and maintains disclosure controls and procedures that are designed to ensure that material information relating to the Company and its subsidiaries required to be disclosed in the reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company’s management conducted an evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Exchange Act), under the supervision and with the participation of the principal executive officer and principal financial officer, 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). 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 on management’s evaluation, and considering the items noted below, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, 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, and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and (iii) that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013 framework). Based upon the Company’s evaluation under this framework, management concluded that the Company’s internal control over financial reporting was effective as of May 1, 2021.

The effectiveness of internal control over financial reporting was audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report included on page 91.

(c) Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the most recent quarter ended May 1, 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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MANAGEMENT’S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS

The management of Barnes & Noble Education, Inc. is responsible for the contents of the Consolidated Financial Statements, which are prepared in conformity with accounting principles generally accepted in the United States of America. The Consolidated Financial Statements necessarily include amounts based on judgments and estimates. Financial information elsewhere in the Annual Report is consistent with that in the Consolidated Financial Statements.

The Company maintains a comprehensive accounting system, which includes controls designed to provide reasonable assurance as to the integrity and reliability of the financial records and the protection of assets. An internal audit staff is employed to regularly test and evaluate both internal accounting controls and operating procedures, including compliance with the Company’s Code of Business Conduct and Ethics. The Audit Committee of the Board of Directors, composed of directors who are not members of management, meets regularly with management, the independent registered public accountants and the internal auditors to ensure that their respective responsibilities are properly discharged.

Ernst & Young LLP and the internal auditors have full and free independent access to the Audit Committee. The role of Ernst & Young LLP, an independent registered public accounting firm, is to provide an objective examination of the Consolidated Financial Statements and the underlying transactions in accordance with the standards of the Public Company Accounting Oversight Board. The report of Ernst & Young LLP appears on page 91 of this report on Form 10-K for the year ended May 1, 2021.

OTHER INFORMATION

The Company has included the Section 302 certifications of the Chief Executive Officer and the Chief Financial Officer of the Company as Exhibits 31.1 and 31.2 to its Annual Report on Form 10-K for Fiscal 2020 filed with the Securities and Exchange Commission, and the Company will submit to the New York Stock Exchange a certificate of the Chief Executive Officer of the Company certifying that he is not aware of any violation by the Company of New York Stock Exchange corporate governance listing standards.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Barnes & Noble Education, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Barnes & Noble Education, Inc. and subsidiaries’ internal control over financial reporting as of May 1, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Barnes & Noble Education, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 1, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 1, 2021 and May 2, 2020, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended May 1, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated June 30, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Iselin, New Jersey

June 30, 2021

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Index to Form 10-K Index to FS

Item 9B. OTHER INFORMATION

None.

PART III 

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our executive officers is incorporated by reference herein from the discussion under Part I - Item 1. Business - Executive Officers of this Annual Report on Form 10-K. The remaining information with respect to directors, executive officers, the code of ethics and corporate governance of the Company is incorporated herein by reference to the Company’s definitive Proxy Statement relating to the Company’s 2021 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the Company’s fiscal year ended May 1, 2021 (the “Proxy Statement”).

The information with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the Proxy Statement.

Item 11. EXECUTIVE COMPENSATION

The information with respect to executive compensation is incorporated herein by reference to the Proxy Statement.

The information with respect to compensation of directors is incorporated herein by reference to the Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table sets forth equity compensation plan information as of May 1, 2021:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders	4,132,417	$	2.20	702,461
Equity compensation plans not approved by security holders	N/A	N/A		N/A
Total	4,132,417	$	2.20	702,461

The information with respect to security ownership of certain beneficial owners and management is incorporated herein by reference to the Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information with respect to certain relationships and related transactions and director independence is incorporated herein by reference to the Proxy Statement.

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Index to Form 10-K Index to FS

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information with respect to principal accountant fees and services is incorporated herein by reference to the Proxy Statement.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report:

1.Consolidated Financial Statements of Barnes & Noble Education, Inc.:

Included in Part II of this Report:

Consolidated Statements of Operations for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Consolidated Balance Sheets as of May 1, 2021 and May 2, 2020

Consolidated Statements of Cash Flows for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Consolidated Statements of Equity for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Notes to Consolidated Financial Statements, for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on the consolidated financial statements of Barnes & Noble Education, Inc. for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

2.Financial Statement Schedules of Barnes & Noble Education, Inc.:

Included in Part II of this report: Schedule II - Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable, not significant or not required, or because the required information is included in the financial statement notes thereto.

3.Exhibits:

EXHIBIT INDEX

Exhibit Number	Exhibit Description
Articles of Incorporation and By-Laws.
3.1	Certificate of Amendment of Amended and Restated Certificate of Incorporation of Barnes & Noble Education, Inc., filed as Exhibit 3.1 to Report on Form 8-K filed with the SEC on September 25, 2017, and incorporated herein by reference.
3.2	Amended and Restated By-Laws, as Amended, Effective as of September 21, 2017, of Barnes & Noble Education, Inc., filed as Exhibit 3.2 to Report on Form 8-K filed with the SEC on September 25, 2017, and incorporated herein by reference.
3.3	Certificate of Designation, Preferences, and Rights of Series A Junior Participating Preferred Stock of Barnes & Noble Education, Inc., dated as of March 25, 2020, filed as Exhibit 3.1 to Report on Form 8-K filed with the SEC on March 26, 2020, and incorporated herein by reference.
Instruments Defining the Rights of Securities; Description of Registrant’s Securities.
4.1	Description of Capital Stock
Material contracts.
10.1	Credit Agreement, dated as of August 3, 2015, by and among Barnes & Noble Education, Inc., as borrower, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other agents party thereto, filed as Exhibit 10.5 to Report on Form 8-K filed with the SEC on August 3, 2015, and incorporated herein by reference.
10.2	First Amendment to Credit Agreement, dated as of February 27, 2017, by and among the Company, the Lenders and the Agent, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on February 28, 2017, and incorporated herein by reference.

93

Index to Form 10-K Index to FS

10.3	Second Amendment, Waiver and Consent to Credit Agreement, dated as of March 1, 2019, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on March 5, 2019, and incorporated herein by reference.
10.4	Third Amendment and Waiver to Credit Agreement and First Amendment to Security Agreement, dated as of March 31, 2021, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on April 5, 2021, and incorporated herein by reference.
10.5	Trademark License Agreement, dated as of August 2, 2015, between Barnes & Noble Education, Inc. and Barnes & Noble, Inc., filed as Exhibit 10.4 to Report on Form 8-K filed with the SEC on August 3, 2015, and incorporated herein by reference.
10.6	Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan filed as Exhibit 10.1 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.
10.7	Barnes & Noble Education, Inc. Form of Performance Unit Award Agreement, filed as Exhibit 10.5 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.
10.8	Barnes & Noble Education, Inc. Form of Performance-Based Stock Unit Award Agreement, filed as Exhibit 10.6 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.
10.9	Barnes & Noble Education, Inc. Form of Performance-Based Stock Unit Award Agreement, filed as Exhibit 10.2 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.
10.10	Barnes & Noble Education, Inc. Form of Performance Share Award Agreement, filed as Exhibit 10.1 to Report on Form 10-Q filed with the SEC on September 8, 2016, and incorporated herein by reference.
10.11	Barnes & Noble Education, Inc. Form of Restricted Stock Unit Award Agreement, filed as Exhibit 10.7 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.
10.12	Barnes & Noble Education, Inc. Form of Restricted Stock Unit Award Agreement, filed as Exhibit 10.3 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.
10.13	Barnes & Noble Education, Inc. Form of Restricted Stock Award Agreement, filed as Exhibit 10.8 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.
10.14	Barnes & Noble Education, Inc. Form of Restricted Stock Award Agreement, filed as Exhibit 10.4 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.
10.15	Barnes & Noble Education, Inc. Form of Phantom Share Units Award Agreement.
10.16	Barnes & Noble Education, Inc. Form of Non-Qualified Stock Options Award Agreement.
10.17	Amended and Restated Employment Agreement, dated July 19, 2017, between Barnes & Noble Education, Inc. and Michael P. Huseby filed as Exhibit 10.2 to Report on Form 8-K filed with the SEC on July 20, 2017, and incorporated herein by reference.
10.18	Letter Agreement, dated as of April 1, 2020 between the Company and Michael P. Huseby, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on April 2, 2020, and incorporated herein by reference.
10.19	Amendment to Employment Agreement, dated September 24, 2020, with Michael P. Huseby, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on September 29, 2020, and incorporated herein by reference.
10.20	Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education, Inc. and Kanuj Malhotra, filed as Exhibit 10.23 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.
10.21	Resignation Letter, dated November 9, 2020, between Barnes & Noble Education, Inc. and Kanuj Malhotra, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on November 12, 2020, and incorporated herein by reference.
10.22	Retention Letter, dated February 28, 2019, between Barnes & Noble Education, Inc. and Michael C. Miller, filed as Exhibit 10.4 to Report on Form 10-Q filed with the SEC on March 5, 2019, and incorporated herein by reference.
10.23	Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education Inc., Barnes & Noble College Booksellers, LLC and Michael C. Miller, filed as Exhibit 10.24 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.

94

Index to Form 10-K Index to FS

10.24	Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education, Inc. and Thomas D. Donohue, filed as Exhibit 10.26 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.
10.25	Form of Director and/or Officer Indemnification Agreement, filed as Exhibit 10.14 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.
10.26	Cooperation Agreement, dated July 20, 2020, 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 21, 2020, and incorporated herein by reference.
Other.
21.1	List of subsidiaries of Barnes & Noble Education, Inc.
23.1	Consent of Ernst & Young LLP
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
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)

Item 16. FORM 10-K SUMMARY

None.

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Index to Form 10-K Index to FS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Barnes & Noble Education, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BARNES & NOBLE EDUCATION, INC.
(Registrant)
By:	/s/ Michael P. Huseby
	Michael P. Huseby
	Chairman and Chief Executive Officer
Date: June 30, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ Michael P. Huseby	Chairman and Chief Executive Officer and Director (Principal Executive Officer)	June 30, 2021
Michael P. Huseby
/s/ Thomas D. Donohue	Chief Financial Officer (Principal Financial Officer)	June 30, 2021
Thomas D. Donohue
/s/ Seema C. Paul	Chief Accounting Officer (Principal Accounting Officer)	June 30, 2021
Seema C. Paul
/s/ Emily C. Chiu	Director	June 30, 2021
Emily C. Chiu
/s/ Daniel A. DeMatteo	Director	June 30, 2021
Daniel A. DeMatteo
/s/ David G. Golden	Director	June 30, 2021
David G. Golden
/s/ Zachary D. Levenick	Director	June 30, 2021
Zachary D. Levenick
/s/ Lowell W. Robinson	Director	June 30, 2021
Lowell W. Robinson
/s/ John R. Ryan	Director	June 30, 2021
John R. Ryan
/s/ Jerry Sue Thornton	Director	June 30, 2021
Jerry Sue Thornton
/s/ David A. Wilson	Director	June 30, 2021
David A. Wilson

96

EX-4.1

EXHIBIT 4.1

DESCRIPTION OF CAPITAL STOCK

General

The following summary description of our capital stock is qualified in its entirety by our Amended and Restated Certificate

of Incorporation, our Amended and Restated By-laws and certain provisions of the Delaware General Corporation Law, or DGCL. Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws are incorporated by reference as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2019 and on file with the Securities and Exchange Commission, or SEC.

Authorized Capital Stock

Our authorized capital stock consists of 200 million shares of Common Stock, par value $0.01 per share, and five million shares of preferred stock, par value $0.01 per share.

Common Stock

Voting Rights. The holders of our Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of shares of our Common Stock do not have cumulative voting rights.

Other Rights. Subject to the preferential liquidation rights of any preferred stock that may be outstanding, upon our liquidation, dissolution or winding-up, the holders of our Common Stock are entitled to share ratably in our assets legally available for distribution to our stockholders.

Fully Paid. The issued and outstanding shares of our Common Stock are fully paid and non-assessable. Any additional shares of Common Stock that we may issue in the future will also be fully paid and non-assessable.

The holders of our Common Stock do not have preemptive rights or preferential rights to subscribe for shares of our capital

stock.

Preferred Stock

Our Amended and Restated Certificate of Incorporation authorizes our Board to designate and issue from time to time one or more series of preferred stock without stockholder approval. Our Board may fix and determine the preferences, limitations and relative rights of each series of preferred stock.

Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By- laws

Amended and Restated Certificate of Incorporation and Amended and Restated By-laws

Certain provisions in our Amended and Restated Certificate of Incorporation and our Amended and Restated By-laws summarized below may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders. These provisions are intended to discourage certain types of transactions that may involve an actual or threatened change of control.

Blank Check Preferred Stock. Our Amended and Restated Certificate of Incorporation permits us to issue, without any further vote or action by the stockholders, up to five million shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series. The ability to issue such preferred stock could discourage potential acquisition proposals and could delay or prevent a change in control.

No Stockholder Action by Written Consent. Our Amended and Restated Certificate of Incorporation expressly excludes the right of our stockholders to act by written consent. Stockholder action must take place at an annual meeting or at a special meeting of our stockholders.

Special Stockholder Meetings. Under our Amended and Restated By-laws, only the chairman of our Board or a majority of the members of our Board are able to call a special meeting of stockholders.

Requirements for Advance Notification of Stockholder Nominations and Proposals. Under our Amended and Restated By-laws, stockholders of record are able to nominate persons for election to our Board or bring other business constituting a proper matter for stockholder action only by providing proper notice to our secretary. Proper notice must be timely, generally between 90 and 120 days prior to the first anniversary of the prior year’s annual meeting, and must include, among other information, the name and address of the stockholder giving the notice, certain information regarding such stockholder’s beneficial ownership of our securities and any derivative instruments or other agreements the value of or return on which is based on or linked to the value of or return on our securities as of the date of the notice, certain information relating to each person whom such stockholder proposes to nominate for election as a director, including any arrangements or understandings between the nominating stockholder and the nominee, in the case of a director nomination, a representation that such stockholder is a holder of record of our Common Stock as of the date of the notice and a brief description of any other business such stockholder proposes to bring before the meeting and the reason for conducting such business, and, if such stockholder intends to solicit proxies, a representation to that effect.

Delaware Takeover Statute

Section 203 of the Delaware General Corporation Law, subject to certain exceptions, prohibits a Delaware corporation from engaging in any “business combination” (as defined below) with any “interested stockholder” (as defined below) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. See “Risk Factors—Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and of Delaware law may prevent or delay an acquisition of the Company, which could affect the trading price of the Common Stock.”

Stockholder Rights Plan

On March 25, 2020, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”), which was amended on July 13, 2020. In connection with our now-terminated Rights Agreement, the Board of Directors designated 100,000 shares of preferred stock as Series A Junior Participating Preferred Stock (the “Preferred Shares”), which series has certain rights and preferences that are greater than the rights of our common stock. The Rights Agreement expired in accordance with its terms on the close of business on December 31, 2020, and no rights were exercised or redeemed and no Preferred Shares were issued or are outstanding.

Listing

Our common stock is listed on the New York Stock Exchange under the symbol “BNED.”

Transfer Agent and Registrar.

The Transfer Agent and Registrar for the Class A common stock is Computershare Trust Company, N.A.

EX-10.15

EXHIBIT 10.15

PHANTOM SHARE AWARD AGREEMENT

Issued Pursuant to the
Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan

THIS PHANTOM SHARE AWARD AGREEMENT (“Agreement”), effective as of the grant date (the “Grant Date”) set forth in the attached Phantom Share Award Certificate (the “Certificate”), represents the grant of a cash-settled stock unit (“Phantom Share”) by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate, and the provisions of the Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan, as it may be amended from time to time (the “Plan”). The Phantom Shares are being granted under Article 8 of the Plan.

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1.Grant of Phantom Shares.  The Company hereby grants to the Participant the number of Phantom Shares set forth in the Certificate. Each Phantom Share is the economic equivalent of a share of common stock of the Company, par value $0.01 per share Common Stock (“Share”), subject to limitations as set forth herein.

2.Vesting Period and Settlement. (a) In General. Subject to the terms of this Agreement, the Certificate and the Plan, Phantom Shares granted hereunder are eligible to vest as indicated in the Certificate. For such vesting to occur on any vesting date set forth therein, the Participant must be continuously employed by the Company or any of its Affiliates from the Grant Date through such vesting date. Except as set forth in Section 6 or Section 13 below, if the Participant’s employment terminates before the last vesting date set forth in the Certificate, all Phantom Shares granted hereunder that are unvested as of the date of termination of employment shall be forfeited.

(b) Vesting. Except as set forth in Section 6 or Section 13 below, in no event shall the Participant have any rights to the Shares underlying the Phantom Shares granted hereunder prior to the date such Phantom Shares vest pursuant to the vesting schedule set forth in the Certificate and the Phantom Shares are settled.

(c) Settlement. On each vesting date, the Company shall deliver to the Participant an amount in cash equivalent to the lesser of (i) the Fair Market Value of a Share on the vesting date or (ii) $7.38 for each Phantom Share that is scheduled to vest on such date, plus accumulated dividends, in accordance with the Certificate and the terms of this Agreement and the Plan, subject to Section 11 below relating to tax withholding.

3.No Voting Rights. No Phantom Shares granted hereunder shall have any voting rights accorded to the underlying Shares. Each Phantom Share constitutes an unfunded and unsecured promise of the Company to deliver to the Participant a Share (or the equivalent value thereof).

4.Dividend Rights. (a) Cash Dividends. The Participant shall be entitled to receive an amount in cash equal to any cash dividends paid with respect to the number of Shares underlying these Phantom Shares granted hereunder. Any such cash dividends shall not be distributed to the Participant unless, until and except to the extent that these Phantom Shares vest.

(b) Non-Cash Dividends. Any stock dividends or other distributions or dividends of property other than cash with respect to the Shares underlying these Phantom Shares granted hereunder shall be subject to the same forfeiture restrictions and restrictions on transferability that apply to the Phantom Shares with respect to which such property was paid.

5.Nontransferability.  (a)  In General.  Except as may be provided in clause (b), below, the Phantom Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, except as provided in the Plan.  No assignment or transfer of the Phantom Shares in violation of this Section 5, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

(b)  Transfers With The Consent of the Committee.  With the consent of the Committee, the Phantom Shares granted hereby may be transferred by the Participant to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner) (each transferee thereof, a “Permitted Assignee”); provided, however, that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement relating to the transferred Phantom Shares and shall execute an agreement satisfactory to the Company evidencing such obligations; and providedfurther that such Participant shall remain bound by the terms and conditions of the Plan.  Notwithstanding the foregoing, in no event shall the Phantom Shares (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders.  The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 5(b).

6.Termination.  (a)  Termination for Cause.  In the event of the termination of the Participant’s employment for cause, unvested Phantom Shares and all rights granted hereunder shall be forfeited and deemed cancelled.  For purposes of this Agreement, the term “cause” shall be defined as actions by the Participant that constitute malfeasance.  Malfeasance includes, but is not limited to, the Participant engaging in fraud, dishonest conduct or other criminal conduct.  A determination of cause shall be made in the sole discretion of the Company’s management, subject to review by the Chairman of the Board.  The Board shall, upon request of the Participant, review the decision of whether the Participant has been discharged, released or terminated for cause and the Board shall confirm, modify or reverse such determination in its sole discretion.

(b)  Termination Without Cause.  Unless otherwise determined by the Committee, in the event of the termination of the Participant’s employment other than for cause or other than as a result of the Participant’s death or disability, unvested Phantom Shares and all rights granted hereunder shall be forfeited and deemed cancelled.

(c)  Death.  In the event a Participant dies while employed by the Company or any of its Affiliates, all restrictions set forth herein shall lapse and any Phantom Shares held by such Participant (or his or her Permitted Assignee) shall immediately vest in the estate of such Participant or in any person who acquired such Phantom Shares by bequest or inheritance, or by the Permitted Assignee. References in this Agreement to a Participant shall include any person who acquired Phantom Shares from such Participant by bequest or inheritance.

(d)  Disability.  In the event a Participant ceases to perform services of any kind for the Company or any of its Affiliates due to permanent and total disability, all restrictions set forth herein shall lapse and all Phantom Shares shall immediately vest in the Participant, or his guardian or legal representative, or a Permitted Assignee, as of the first date of permanent and total disability (as determined in the sole discretion of the Committee). For purposes of this Agreement, the term “permanent and total disability” means the Participant is 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, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee. Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (1) whether a Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (2) the first date of such permanent and total disability.

7.Recoupment. The Committee may, in its sole discretion, direct that the Phantom Shares be cancelled or that the Company recoup, and upon demand by the Company, the Participant agrees to return to the Company, any gain realized under previously settled Phantom Shares if (a) the Participant, without the consent of the

2

Company, while employed by or providing services to the Company or any of its Affiliates, (i) violates a non-competition, non-solicitation or non-disclosure agreement, (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities or (iii) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to the Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the Phantom Share or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time or (b) if a financial restatement reduces the amount that would have been earned under such Phantom Share. The amount to be recouped shall be determined by the Committee in its sole discretion but shall not exceed the Fair Market Value of the shares underlying the Phantom Share that vested under this Agreement. If after a demand for recoupment under this Section 7, the Participant fails to return any amount paid by the Company, the Participant acknowledges that the Company has the right to effect the recovery of the amount paid and the amount of its court costs, attorneys’ fees and other costs and expenses incurred in connection with enforcing this Agreement.

8.Administration.  (a) Generally. This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant and Permitted Assignees. Any inconsistency between this Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.

(b) Conflicts. The order of precedence as between the Plan, this Agreement or the Certificate, and any written employment agreement between the Participant and the Company shall be as follows: If there is any inconsistency between (i) the terms of this Agreement or the Certificate (on the one hand) and the terms of the Plan (on the other hand); or (ii) any such written employment agreement (on the one hand) and the terms of the Plan (on the other hand), the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement, the Certificate or the written employment agreement (as the case may be). If there is any inconsistency between the terms of this Agreement or the Certificate (on the one hand) and the terms of Participant’s written employment agreement, if any (on the other hand), the terms of this Agreement or the Certificate (as the case may be) shall completely supersede and replace the conflicting terms of the written employment agreement unless such written employment agreement was approved by the Committee, in which event such written employment agreement shall completely supersede and replace the conflicting terms of this Agreement or the Certificate (as the case may be).

9.Adjustments.  The number of Shares subject to this Phantom Share, and the Phantom Share Price, shall be subject to adjustment in accordance with Section 11.2 of the Plan.

10.Exclusion from Other Computations. By acceptance of these Phantom Shares granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt of the Phantom Shares, or upon disposition of any Shares received upon exercise, is special incentive compensation and shall not be taken into account, to the extent permissible under applicable law, as “wages,” “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

11.Withholding Taxes.  The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee), or otherwise require the Participant (or Permitted Assignee) to pay, any Federal, state, local or foreign income taxes, withholding taxes or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant of any Award, exercise of an Phantom Share, or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate.  In satisfaction of the requirement to pay Withholding Taxes, unless the Participant (or Permitted Assignee) elects in writing otherwise, the Company may withhold a portion of any Shares then issuable to the Participant (or Permitted Assignee) pursuant to these Phantom Shares.  If, notwithstanding the foregoing, the Participant (or Permitted

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Assignee) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant (or Permitted Assignee) or to take such other action as may be necessary to satisfy such Withholding Taxes.  In satisfaction of the requirement to pay Withholding Taxes, the Participant (or Permitted Assignee) may make a written election, which may be accepted or rejected in the discretion of the Committee, to tender other Shares to the Company having an aggregate Fair Market Value equal to the amount of such Withholding Taxes, either by actual delivery or attestation, in the sole discretion of the Committee, providedthat, except as otherwise determined by the Committee, the Shares that are tendered must have been held by the Participant (or Permitted Assignee) for at least six (6) months prior to their tender (or such lesser period as may be required to avoid adverse accounting consequences) to satisfy the Phantom Share Price or have been purchased on the open market.

12.Registration; Legend.  The Company may postpone the issuance and delivery of Shares upon any exercise of these Phantom Shares until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the same class are then listed and (b) the completion of such registration or other qualification of such Shares under any Federal or state law, rule or regulation as the Company shall determine to be necessary or advisable.  The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.

The Company may cause the following or a similar legend to be set forth on each certificate representing Shares or any other security issued or issuable upon exercise of these Phantom Shares unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO FORFEITURE AND OTHER LIMITATIONS AND RESTRICTIONS AS SET FORTH IN A PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT ON FILE WITH THE COMPANY. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

13.Change of Control.  (a) In the event of the occurrence of a Change of Control of the Company, the Phantom Share shall be treated in accordance with Article 10 of the Plan.

(b)    Notwithstanding the foregoing, in the event of a termination of the Participant’s employment by the successor company within 24 months following such Change of Control, the Phantom Share granted hereunder or any award substituted therefor held by the Participant at the time of the Change of Control shall vest as of the day immediately preceding the date of termination unless the termination was made by the successor company for cause. For purposes of this Agreement, “cause” shall mean either (i) material failure by the Participant to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with the Company after written notice of such breach or failure and the Participant failed to cure such breach or failure to the Company’s reasonable satisfaction within five days after receiving such written notice; or (ii) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of the Company or its funds, properties, assets or other employees.

14. Miscellaneous.

(a)    No Right to Employment. Neither this Agreement nor the Certificate shall confer upon the Participant any right to continuation of employment by the Company, nor shall this Agreement or the Certificate interfere in any way with the Company’s right to terminate the Participant’s employment at any time.

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(b)    Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to the Phantom Share granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

(c)    Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(d)    Consent to Board or Committee Action. By accepting this grant of the Phantom Share, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(e)    Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of the Phantom Share. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of the Phantom Share in accordance with the Plan.

(f)    Governmental Approvals. This Agreement and the Certificate shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(g)    Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(h)    Compliance with Code Section 409A. The grant of the Phantom Shares is intended to comply with Code Section 409A, and this Agreement shall be interpreted, operated and administered consistent with this intent. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of this Agreement under Code Section 409A or any other federal, state, local, foreign or other taxes. Tax consequences will depend, in part, upon the application of the relevant tax law to the relevant facts and circumstances. The Participant should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

(i)    Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with the Plan, this Agreement or the Certificate.

(j)    Exculpation. The Phantom Shares granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of the Phantom Shares granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to the Phantom Shares granted hereunder.

(k)    Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

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(l)    Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn: Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

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EX-10.16

EXHIBIT 10.16

OPTION AWARD AGREEMENT

Issued Pursuant to the
Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan

THIS OPTION AGREEMENT (“Agreement”), effective as of the grant date (the “Grant Date”) set forth in the attached Option Award Certificate (the “Certificate”), represents the grant of a nonqualified option (“Option”) by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate, and the provisions of the Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan, as it may be amended from time to time (the “Plan”). The Option granted hereby is not intended to be an “incentive stock option” as such term is described in Section 5.7 of the Plan.

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1.Grant of Option.  The Company hereby grants to the Participant an Option to purchase the number of Shares set forth in the Certificate, at the stated Option Price per Share, which is one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant, in the manner and subject to the terms and conditions of the Plan and this Agreement.

2.Option Term.  The term of this Option begins as of the Grant Date and continues through the Date of Expiration as specified in the Certificate (the “Expiration Date”), unless sooner terminated or extended in accordance with the terms of this Agreement.

3.Vesting Period:  (a)  In General.  Subject to the terms of this Agreement and the Plan, this Option shall vest and be exercisable as indicated in the Certificate.  For the specified vesting to occur on any vesting date set forth therein, the Participant must be continuously employed by or serving as a Director of the Company or any of its Affiliates from the Grant Date through such vesting date.

(b)  Vesting.  Except as set forth in Section 14 hereof, in no event shall the Participant have any rights to exercise any portion of this Option granted hereunder:  (i) prior to the date such portion vests pursuant to the Vesting Schedule set forth in the Certificate; or (ii) with respect to any partial Share.

4.Exercise.  The Participant, or the Participant’s Permitted Assignee (as defined below) or, in the case of the Participant’s death, the Participant’s estate, or in the case of the Participant’s disability, the Participant’s guardian or legal representative, may exercise this Option to the extent vested (as provided in Sections 3 and 7 hereof) at any time prior to the termination of this Option as provided in Sections 2 and 7 hereof and Section 12.11 of the Plan.

5.How to Exercise.  Once vested, the Options hereby granted shall be exercised by written notice to the Committee or such other administrator appointed by the Committee, specifying the number of Shares subject to this Option that Participant desires to exercise.  Payment for the Shares purchased pursuant to the exercise of the Options hereby granted shall be made in the manner set forth in Section 5.5 of the Plan, subject to any consents or approvals required thereunder.

6.Nontransferability.  (a)  In General.  Except as may be provided in clause (b), below, this Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, except as provided in the Plan.  No assignment or transfer of this Option in violation of this Section 6, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

(b)  Transfers With The Consent of the Committee.  With the consent of the Committee, the Options granted hereby may be transferred by the Participant to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner) (each transferee thereof, a “Permitted Assignee”); provided, however, that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement relating to the transferred Options and shall execute an agreement satisfactory to the Company evidencing such obligations; and providedfurther that such Participant shall remain bound by the terms and conditions of the Plan.  Notwithstanding the foregoing, in no event shall the Options (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders.  The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 6(b).

7.Termination.  (a)  Termination for Cause.  In the event of the termination of the Participant’s employment or Directorship for cause, this Option and all rights granted hereunder shall be forfeited and deemed cancelled and no longer exercisable on the date of such termination, unless the Committee determines otherwise.  For purposes of this Agreement, the term “cause” shall be defined as actions by the Participant that constitute malfeasance.  Malfeasance includes, but is not limited to, the Participant engaging in fraud, dishonest conduct or other criminal conduct.  A determination of cause shall be made in the sole discretion of the Company’s management, subject to review by the Chairman of the Board.  The Board shall, upon request of the Participant, review the decision of whether the Participant has been discharged, released or terminated for cause and the Board shall confirm, modify or reverse such determination in its sole discretion.

(b)  Termination Without Cause.  Unless otherwise determined by the Committee, in the event of the termination of the Participant’s employment or Directorship other than for cause or other than as a result of the Participant’s death or disability, this Option and all rights granted hereunder shall be forfeited and deemed cancelled and no longer exercisable on the 90th day after the date of such termination; provided, however, that (i) in no instance may the term of this Option, as so extended, exceed the Expiration Date, and (ii) only Options not previously expired or exercised, to the extent vested and exercisable on the date of termination, shall be exercisable (i.e., no vesting shall occur during the aforementioned 90-day post-termination period).

(c)  Death.  In the event the Participant dies while employed by or serving as a Director of the Company or any of its Affiliates, any Options held by the Participant (or his or her Permitted Assignee) and not previously expired or exercised shall, to the extent vested and exercisable on the date of death, be exercisable by the estate of the Participant or by any person who acquired such Option by bequest or inheritance, or by the Permitted Assignee, at any time within one year after the death of the Participant, whether such one-year anniversary is before or after the Expiration Date, unless earlier terminated pursuant to its terms.  References in this Agreement to a Participant shall include any person who acquired Options from such Participant by bequest or inheritance.

(d)  Disability.  In the event the Participant ceases to perform services of any kind (whether as an employee or Director) for the Company or any of its Affiliates due to permanent and total disability, the Participant, or his guardian or legal representative, or a Permitted Assignee, shall have the unqualified right to exercise any Options that have not been previously exercised or expired and which the Participant was eligible to exercise as of the first date of permanent and total disability (as determined in the sole discretion of the Committee), at any time within one year after the first date of permanent and total disability, whether such one-year anniversary is before or after the Expiration Date, unless earlier terminated pursuant to its terms.  For purposes of this Agreement, the term “permanent and total disability” means the Participant is 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, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee.  Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (1) whether the Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (2) the first date of such permanent and total disability.

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8.Recoupment. The Committee may, in its sole discretion, direct that the Option be cancelled or that the Company recoup, and upon demand by the Company, the Participant agrees to return to the Company, any gain realized under a previously paid Performance Share if (a) the Participant, without the consent of the Company, while employed by or providing services to the Company or any of its Affiliates, (i) violates a non-competition, non-solicitation or non-disclosure agreement, (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities or (iii) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to the Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the Option or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time or (b) if a financial restatement reduces the amount that would have been earned under such Option. The amount to be recouped shall be determined by the Committee in its sole discretion but shall not exceed the Fair Market Value of the shares underlying the Option that vested under this Agreement. If after a demand for recoupment under this Section 8, the Participant fails to return any amount paid by the Company, the Participant acknowledges that the Company has the right to effect the recovery of the amount paid and the amount of its court costs, attorneys’ fees and other costs and expenses incurred in connection with enforcing this Agreement.

9.Administration.  (a) Generally. This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant and Permitted Assignees. Any inconsistency between this Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.

(b) Conflicts. The order of precedence as between the Plan, this Agreement or the Certificate, and any written employment agreement between the Participant and the Company shall be as follows: If there is any inconsistency between (i) the terms of this Agreement or the Certificate (on the one hand) and the terms of the Plan (on the other hand); or (ii) any such written employment agreement (on the one hand) and the terms of the Plan (on the other hand), the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement, the Certificate or the written employment agreement (as the case may be). If there is any inconsistency between the terms of this Agreement or the Certificate (on the one hand) and the terms of Participant’s written employment agreement, if any (on the other hand), the terms of this Agreement or the Certificate (as the case may be) shall completely supersede and replace the conflicting terms of the written employment agreement unless such written employment agreement was approved by the Committee, in which event such written employment agreement shall completely supersede and replace the conflicting terms of this Agreement or the Certificate (as the case may be).

10.Adjustments.  The number of Shares subject to this Option, and the Option Price, shall be subject to adjustment in accordance with Section 11.2 of the Plan.

11.Exclusion from Other Computations. By acceptance of the Option granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt of the Option, or upon disposition of any Shares received upon exercise, is special incentive compensation and shall not be taken into account, to the extent permissible under applicable law, as “wages,” “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

12.Withholding Taxes.  The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee), or otherwise require the Participant (or Permitted Assignee) to pay, any Federal, state, local or foreign income taxes, withholding taxes or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant of any Award, exercise of an Option, or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate.  In

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satisfaction of the requirement to pay Withholding Taxes, unless the Participant (or Permitted Assignee) elects in writing otherwise, the Company may withhold a portion of any Shares then issuable to the Participant (or Permitted Assignee) pursuant to this Option.  If, notwithstanding the foregoing, the Participant (or Permitted Assignee) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant (or Permitted Assignee) or to take such other action as may be necessary to satisfy such Withholding Taxes.  In satisfaction of the requirement to pay Withholding Taxes, the Participant (or Permitted Assignee) may make a written election, which may be accepted or rejected in the discretion of the Committee, to tender other Shares to the Company having an aggregate Fair Market Value equal to the amount of such Withholding Taxes, either by actual delivery or attestation, in the sole discretion of the Committee, providedthat, except as otherwise determined by the Committee, the Shares that are tendered must have been held by the Participant (or Permitted Assignee) for at least six (6) months prior to their tender (or such lesser period as may be required to avoid adverse accounting consequences) to satisfy the Option Price or have been purchased on the open market.

13.Registration; Legend.  The Company may postpone the issuance and delivery of Shares upon any exercise of this Option until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the same class are then listed and (b) the completion of such registration or other qualification of such Shares under any Federal or state law, rule or regulation as the Company shall determine to be necessary or advisable.  The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.

The Company may cause the following or a similar legend to be set forth on each certificate representing Shares or any other security issued or issuable upon exercise of this Option unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO FORFEITURE AND OTHER LIMITATIONS AND RESTRICTIONS AS SET FORTH IN A PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT ON FILE WITH THE COMPANY. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

14.Change of Control.  ( In the event of the occurrence of a Change of Control of the Company, the Option shall be treated in accordance with Article 10 of the Plan.

(b)    Notwithstanding the foregoing, in the event of a termination of the Participant’s employment by the successor company within 24 months following such Change of Control, the Option granted hereunder or any award substituted therefor held by the Participant at the time of the Change of Control shall vest as of the day immediately preceding the date of termination and be exercisable until the earlier of (i) the 90th day after termination and (ii) the Expiration Date unless the termination was made by the successor company for cause.For purposes of this Agreement, “cause” shall mean either (i) material failure by the Participant to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with the Company after written notice of such breach or failure and the Participant failed to cure such breach or failure to the Company’s reasonable satisfaction within five days after receiving such written notice; or (ii) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of the Company or its funds, properties, assets or other employees.

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15. Miscellaneous.

(a)    No Right to Employment. Neither this Agreement nor the Certificate shall confer upon the Participant any right to continuation of employment by the Company, nor shall this Agreement or the Certificate interfere in any way with the Company’s right to terminate the Participant’s employment at any time.

(b)    Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to the Option granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

(c)    Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(d)    Consent to Board or Committee Action. By accepting this grant of the Option, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(e)    Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of the Option. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of the Option in accordance with the Plan.

(f)    Governmental Approvals. This Agreement and the Certificate shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(g)    Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(h)    Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with the Plan, this Agreement or the Certificate.

(i)    Exculpation. The Option granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of the Option granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to the Option granted hereunder.

(j)    Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

(k)    Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn:

5

Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

6

EX-21.1

    Exhibit 21.1

Subsidiaries of Barnes & Noble Education, Inc.

1.B&N Education, LLC, a Delaware limited liability company

2.Barnes & Noble College Booksellers, LLC, a Delaware limited liability company

3.BNED Digital Holdings, LLC, a Delaware limited liability company

4.BNED LoudCloud, LLC, a Delaware limited liability company

5.BNED MBS Holdings, LLC, a Delaware limited liability company

6.Cram LLC, a Delaware limited liability company

7.Educate Ahora LLC, a Delaware limited liability company

8.Edúcate Ahora México, S. de R.L. de C.V., a Mexican company

9.Etudier Facile LLC, a Delaware limited liability company

10.LoudCloud Systems Private Limited, an Indian subsidiary

11.MBS Automation LLC, a Delaware limited liability company

12.MBS Direct, LLC, a Delaware limited liability company

13.MBS Internet, LLC, a Delaware limited liability company

14.MBS Service Company LLC, a Delaware limited liability company

15.MBS Textbook Exchange, LLC, a Delaware limited liability company

16.PaperRater, LLC, a Delaware limited liability company

17.Promoversity LLC, a Delaware limited liability company

18.Student Brands, LLC, a Delaware limited liability company

19.Study Mode LLC, a California limited liability company

20.Studymode Technologies Private Limited, an Indian company

21.TextbookCenter LLC, a Delaware limited liability company

22.Trabalhos Feitos, LLC, a Delaware limited liability company

23.TXTB.com LLC, a Delaware limited liability company

24.Worldwide Knowledge LLC, a Delaware limited liability company

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(i)Registration Statement (Form S-8 No. 333-227515), which relates to the Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan,

(ii)Registration Statement (Form S-8 No. 333-206893) and Registration Statement (Form S-8 No. 333-213673) each of which relates to the Barnes & Noble Education, Inc. Equity Incentive Plan;

of our reports dated June 30, 2021, with respect to the consolidated financial statements and schedule of Barnes & Noble Education, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Barnes & Noble Education, Inc. and subsidiaries included in this Annual Report (Form 10-K) for the year ended May 1, 2021.

/s/ Ernst & Young LLP

Iselin, New Jersey

June 30, 2021

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 Annual Report on Form 10-K 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: June 30, 2021

By:	/s/ Michael P. Huseby
	Michael P. Huseby
	Chairman & 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 Annual Report on Form 10-K 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: June 30, 2021

By:	/s/ Thomas D. Donohue
	Thomas D. Donohue
	Executive Vice President, 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 annual report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-K for the period ended May 1, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael P. Huseby, Chairman & 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 & Chief Executive Officer
Barnes & Noble Education, Inc.

June 30, 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 annual report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-K for the period ended May 1, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas D. Donohue, Executive Vice President, 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

Executive Vice President, Chief Financial Officer
Barnes & Noble Education, Inc.

June 30, 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 - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	May 01, 2021	Jun. 17, 2021	Oct. 31, 2020	May 02, 2020
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	May 01, 2021
Current Fiscal Year End Date	--05-01
Document Transition Report	false
Entity File Number	1-37499
Entity Registrant Name	BARNES & NOBLE EDUCATION, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-0599018
Entity Address, Address Line One	120 Mountain View Blvd.
Entity Address, City or Town	Basking Ridge
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07920
City Area Code	(908)
Local Phone Number	991-2665
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	BNED
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Share Price			$ 2.30
Entity Common Stock, Shares Outstanding		51,384,234
Common Stock, Par or Stated Value Per Share	$ 0.01			$ 0.01
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Entity Central Index Key	0001634117
Entity Filer Category	Accelerated Filer
ICFR Auditor Attestation Flag	true
Entity Public Float			$ 109
Entity Small Business	false

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Sales:
Product sales and other	$ 1,299,740	$ 1,671,200	$ 1,838,760
Rental income	134,150	179,863	195,883
Revenues	1,433,890	1,851,063	2,034,643
bned_Cost of Product and Other Cost of Sales	1,093,989	1,303,702	1,395,339
Rental cost of sales	87,240	104,812	111,578
Cost of Goods and Services Sold	1,181,229	1,408,514	1,506,917
Gross profit	252,661	442,549	527,726
Selling and administrative expenses	338,280	404,472	423,880
Depreciation and amortization expense	52,967	61,860	65,865
Impairment loss (non-cash)	27,630	433	57,748
Restructuring and other charges	9,960	18,567	7,233
Transaction costs	0	0	654
Operating income	(176,176)	(42,783)	(27,654)
Interest expense, net	8,087	7,445	9,780
Income before income taxes	(184,263)	(50,228)	(37,434)
Income tax expense	(52,476)	(11,978)	(13,060)
Net income (loss)	$ (131,787)	$ (38,250)	$ (24,374)
Earnings per share of common stock
Earnings Per Share, Basic	$ (2.65)	$ (0.80)	$ (0.52)
Earnings Per Share, Diluted	$ (2.65)	$ (0.80)	$ (0.52)
Weighted average common shares outstanding
Weighted Average Number of Shares Outstanding, Basic	49,669	48,013	47,306
Diluted	49,669	48,013	47,306

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	May 01, 2021	May 02, 2020
Current assets:
Cash and cash equivalents	$ 8,024	$ 8,242
Receivables, net	121,072	90,851
Merchandise inventories, net	281,112	428,939
Textbook rental inventories	28,692	40,710
Prepaid expenses and other current assets	61,933	16,177
Total current assets	500,833	584,919
Property and equipment, net	89,172	97,739
Operating Lease, Right-of-Use Asset	240,456	250,837
Intangible assets, net	150,904	175,125
Goodwill	4,700	4,700
Deferred Income Tax Assets, Net	23,248	7,805
Other noncurrent assets	29,105	35,307
Total assets	1,038,418	1,156,432
Current liabilities:
Accounts payable	137,578	143,678
Accrued Liabilities, Current	92,871	95,420
Operating Lease, Liability, Current	92,513	92,571
Short-term borrowings	50,000	75,000
Total current liabilities	372,962	406,669
Operating Lease, Liability, Noncurrent	184,780	186,142
Other long-term liabilities	52,042	46,170
Long-term borrowings	127,600	99,700
Total liabilities	737,384	738,681
Commitments and contingencies	0	0
Preferred stock, $0.01 par value	0	0
Common stock, $0.01 par value	533	521
Additional paid-in capital	734,257	732,958
Retained Earnings (Accumulated Deficit)	(414,614)	(282,827)
Treasury stock, at cost	(19,142)	(32,901)
Total stocholders' equity	301,034	417,751
Total liabilities and Parent Company equity	$ 1,038,418	$ 1,156,432
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	53,327,000	52,140,000
Common Stock, Shares, Outstanding	51,378,913	48,298,000

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Net Cash Provided by (Used in) Operating Activities	$ 32,882	$ (8,676)	$ 121,791
Cash flows from operating activities:
Net income (loss)	(131,787)	(38,250)	(24,374)
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization expense	52,967	61,860	65,865
Impairment loss (non-cash)	27,630	433	57,748
COGS Inventory Loss and Markdown	14,960	0	0
Content amortization expenses	5,034	4,082	1,096
Amortization of deferred financing costs	1,112	1,095	1,550
Deferred taxes	(15,443)	(5,380)	(4,531)
Stock-based compensation expense	5,095	6,638	9,017
Increase (Decrease) in Operating Liabilities	(4,367)	18,399	0
Changes in other long-term liabilities	9,238	947	(5,340)
Changes in other operating assets and liabilities, net	68,443	(58,500)	20,760
Net Cash Provided by (Used in) Investing Activities	(36,875)	(37,019)	(55,620)
Cash flows from investing activities:
Purchases of property and equipment	(37,223)	(36,192)	(46,420)
Acquisition of business, net of cash acquired	0	0	(10,000)
Increase (Decrease) in Other Noncurrent Assets	(348)	827	(800)
Cash flows from financing activities:
Proceeds from borrowings on Credit Facility	722,600	600,900	521,200
Repayments of borrowings on Credit Facility	(719,700)	(559,700)	(584,100)
Payments of deferred financing costs	(1,076)	0	(3,395)
Proceeds from Sale of Treasury Stock	10,869	0	0
Payments for Repurchase of Common Stock	(894)	(1,265)	(1,977)
Net Cash Provided by (Used in) Financing Activities	11,799	39,935	(68,272)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	7,806	(5,760)	(2,101)
Cash and cash equivalents at beginning of period	16,814	9,008	14,768
Changes in other operating assets and liabilities, net:
Receivables, net	(30,221)	7,320	1,814
Merchandise inventories	132,867	(8,617)	23,237
Textbook rental inventories	12,018	6,291	778
Prepaid expenses and other current assets	(37,492)	(4,399)	69
Accounts payable and accrued liabilities	(8,729)	(59,095)	(5,138)
Changes in other operating assets and liabilities, net	68,443	(58,500)	20,760
Supplemental Cash Flow Information [Abstract]
Interest Paid, Excluding Capitalized Interest, Operating Activities	6,778	6,796	8,589
Income taxes paid (net of refunds)	$ 6,008	$ (4,141)	$ 10,277

XML

Consolidated Statement of Equity Statement - USD ($) $ in Thousands	Total	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Common Stock [Member]	Retained Earnings
Common Stock, Shares, Issued				50,032,000
Stockholders' Equity Attributable to Parent	$ 467,963	$ 717,323	$ 29,658	$ 501	$ (220,203)
Treasury Stock, Shares			3,115,000
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	9,017	9,017
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures				998,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	$ 0	(9)		$ 9
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	351,043		352,000
Treasury Stock, Value, Acquired, Cost Method			$ 1,978
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation	$ 1,978
Net Income (Loss) Attributable to Parent	(24,374)				(24,374)
Proceeds from Sale of Treasury Stock	$ 0
Common Stock, Shares, Issued	51,030,000
Stockholders' Equity Attributable to Parent	$ 450,628	726,331	$ 31,636	$ 510	(244,577)
Treasury Stock, Shares			3,467,000
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	6,638	6,638
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures				1,110,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	$ 0	(11)		$ 11
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	374,733		375,000
Treasury Stock, Value, Acquired, Cost Method			$ 1,265
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation	$ 1,265
Net Income (Loss) Attributable to Parent	(38,250)				(38,250)
Proceeds from Sale of Treasury Stock	$ 0
Common Stock, Shares, Issued	52,140,000
Treasury Stock, Value	$ (32,901)
Stockholders' Equity Attributable to Parent	417,751	732,958		$ 521	(282,827)
Treasury Stock, Shares			3,842,000
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	5,095	5,095
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures				1,187,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	(12)		$ 12
Stock Issued During Period, Value, Treasury Stock Reissued	$ 14,653
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	414,174		414,000
Treasury Stock, Value, Acquired, Cost Method			$ 894
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation	$ 894
Net Income (Loss) Attributable to Parent	(131,787)				(131,787)
Adjustments to Additional Paid in Capital, Other	$ (3,784)
Stock Issued During Period, Shares, Treasury Stock Reissued	(2,307,692)		(2,308,000)
Proceeds from Sale of Treasury Stock	$ 10,869
Common Stock, Shares, Issued	53,327,000
Treasury Stock, Value	$ (19,142)
Stockholders' Equity Attributable to Parent	$ 301,034	$ 734,257	$ 19,142	$ 533	$ (414,614)
Treasury Stock, Shares			1,948,000

XML

Organization

12 Months Ended

May 01, 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 1,417 physical, virtual, and custom bookstores and serve more than 6 million students, delivering essential educational content and tools within a dynamic omni channel 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 Fanatics 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 our partnership with Fanatics Retail Group Fulfillment, LLC, Inc. and Fanatics Lids College, Inc. (collectively referred to herein as 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 and Part II - Item 8. Financial Statements and Supplementary Data - Note 5. Segment Reporting.

Partnership with Fanatics and FLC

In December 2020, we entered into a new merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. (“FLC”). 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 merchandising partnership agreement, we closed on the sale of our logo and emblematic general merchandise inventory to FLC. 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.

COVID-19 Business Impact

During Fiscal 2021 and the fourth quarter of Fiscal 2020, our business was 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 COVID-19 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, 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 to determine when our operations can begin returning to normal levels of business. Please see our Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Other Long-Lived Assets related to the impairment loss (non-cash) recognized during Fiscal 2021.

XML

Revenue Revenue

12 Months Ended

May 01, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Retail
Product Sales	$	1,157,115	$	1,493,044	$	1,645,357
Rental Income	134,150		179,863		195,883
Service and Other Revenue (a)	39,205		39,985		47,768
Retail Total Sales	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale Sales	$	165,825	$	198,353	$	223,374
DSS Sales (b)	$	27,374	$	23,661	$	21,339
Eliminations (c)	$	(89,779)	$	(83,843)	$	(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643

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

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

(c)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 during the fiscal year ended May 1, 2021:

Deferred revenue as of April 27, 2019	$	20,418
Additions to deferred revenue during the period	193,235
Reductions to deferred revenue for revenue recognized during the period	(200,280)
Deferred revenue balance as of May 2, 2020	$	13,373
Additions to deferred revenue during the period	171,834
Reductions to deferred revenue for revenue recognized during the period	(167,068)
Deferred revenue balance as of May 1, 2021	$	18,139

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Summary of Significant Accounting Policies (Notes)

12 Months Ended

May 02, 2020

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

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”). In the opinion of the Company’s management, the accompanying 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.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended May 1, 2021 (“Fiscal 2021”), 53 weeks ended May 2, 2020 (“Fiscal 2020”), and 52 weeks ended April 27, 2019 (“Fiscal 2019”).

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. 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.

As discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of the COVID-19 pandemic on our operations affects the comparability of our results of operations and cash flows.

Consolidation

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.

Acquisition - PaperRater

On August 21, 2018, we acquired the assets of PaperRater in the DSS Segment. PaperRater is a leading website that offers students a suite of writing services aimed at improving multiple facets of writing. PaperRater's services include plagiarism detection, grammar feedback, and an AI-based writing score predictor, and are highly complementary to Student Brands' existing writing service offerings. PaperRater adds millions of pieces of content, from essays and dissertations to personal narratives and speeches, to our growing digital content library.

We completed the purchase for cash consideration of $10,000 and the transaction was funded from cash on-hand and availability under our existing Credit Agreement. The final purchase price was allocated primarily as follows: $5,300 intangible assets (primarily content with an estimated useful life of 5 years) and $4,700 goodwill. This acquisition is not material to our

consolidated financial statements and therefore, disclosure of pro forma financial information has not been presented. The results of operations reflect the period of ownership of the acquired business.

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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

We consider all short-term, highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Restricted Cash

As of May 1, 2021, we had restricted cash of $8,790, comprised of $7,893 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to FLC for logo merchandise sales as per the merchandising partnership agreement and $897 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization.

As of May 2, 2020, we had restricted cash of $766 included in other noncurrent assets in the consolidated balance sheet for amounts held in trust for future distributions related to employee benefit plans.

Accounts Receivable

Receivables represent customer, private and public institutional and government billings (colleges, universities and other financial aid providers), credit/debit card receivables, advances for book buybacks, advertising and other receivables due within one year. Components of accounts receivables are as follows:

	As of
	May 1, 2021		May 2, 2020
Trade accounts	$	99,583	$	75,702
Advances for book buybacks	2,901		766
Credit/debit card receivables	4,433		2,177
Other receivables	14,155		12,206
Total receivables, net	$	121,072	$	90,851

Accounts receivable are presented on our consolidated balance sheets net of allowances. An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historical trends, the financial condition of our customers and an evaluation of economic conditions. We write-off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer. Allowance for doubtful accounts were $3,594, and $1,986 as of May 1, 2021 and May 2, 2020, respectively.

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. There were no LIFO adjustments in Fiscal 2021, Fiscal 2020 and Fiscal 2019.

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. The Retail Segments four largest suppliers, excluding the supply sourced from our Wholesale Segment, accounted for approximately 35% of our merchandise purchased during the 52 weeks ended May 1, 2021. For our Wholesale Segment, the four largest suppliers, excluding textbooks purchased from students at our Retail Segment's bookstores, accounted for approximately 32% of merchandise purchases during the 52 weeks ended May 1, 2021.

On April 4, 2021, as contemplated by the merchandising partnership agreement, we closed on the sale of 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 in the statement of operations for the Retail Segment. The final inventory purchase price will be determined during the first quarter of Fiscal 2022. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization.

During the 52 weeks ended May 1, 2021, we also recognized a merchandise inventory write-off of $4,698 in cost of goods sold in the statement of operations for the Retail Segment related to our initiative to exit certain product offerings and streamline/rationalize our overall non-logo general merchandise product assortment resulting from the centralization of our merchandising decision-making during the year.

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.

Cloud Computing Arrangements

We adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") effective April 28, 2019 (first day of Fiscal 2020) prospectively for all implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract. The guidance requires implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract to be amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. Prior to adoption, we capitalized certain implementation costs, primarily related to digital and consumer data platforms, to property and equipment on the consolidated balance sheets and depreciated these implementation costs to depreciation and amortization expense in the consolidated statement of operations over the term of the service contract once the asset was ready for its intended use. Subsequent to adoption, implementation costs which were previously capitalized and depreciated as described above, are included in prepaid expenses and other assets in the consolidated balance sheets and amortized to selling and administrative expense in the consolidated statement of operations. Implementation costs incurred in cloud computing arrangements reflected in prepaid and other assets in the consolidated balance sheets were $10,516 and $4,262 as of May 1, 2021 and May 2, 2020, respectively. We had $283, $96, and $0 of amortization of implementation costs in selling and administrative expense in the consolidated statement of operations, for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over estimated useful lives. Maintenance and repairs are expensed as incurred, however major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. We had $35,024, $42,550, and $44,550, of depreciation expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Content development costs are primarily related to bartleby.com textbook solutions which was launched in Fiscal 2019. Content amortization is computed using the straight-line method over estimated useful lives. Amortization of content development costs is recorded to cost of goods sold. We had $5,034, $4,082, and $1,096, of content amortization expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Components of property and equipment are as follows:

		As of
	Useful Life	May 1, 2021		May 2, 2020
Property and equipment:
Leasehold improvements	(a)	$	131,784	$	141,602
Machinery, equipment and display fixtures	3 - 5	247,979		246,447
Computer hardware and capitalized software costs	(b)	152,941		145,764
Office furniture and other	2 - 7	62,031		62,209
Content development costs	3 - 5	25,526		16,729
Construction in progress		4,444		3,878
Total property and equipment		624,705		616,629
Less accumulated depreciation and amortization		535,533		518,890
Total property and equipment, net		$	89,172	$	97,739

(a)     Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from 1 - 15 years.

(b)     System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 2 - 5 years.

Intangible Assets

Amortizable intangible assets as of May 1, 2021 and May 2, 2020 are as follows:

		As of May 1, 2021
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	9 - 13	$	263,168	$	(122,565)	$	140,603
Content	1 - 2	19,400		(13,495)		5,905
Technology	1	9,500		(7,500)		2,000
Other (a)	1 - 7	8,930		(6,534)		2,396
		$	300,998	$	(150,094)	$	150,904

		As of May 2, 2020
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	10 - 14	$	271,800	$	(113,280)	$	158,520
Content	2 - 3	19,400		(9,615)		9,785
Technology	2	9,500		(5,900)		3,600
Other (a)	1 - 8	8,930		(5,710)		3,220
		$	309,630	$	(134,505)	$	175,125

(a)    Other consists of recognized intangibles for non-compete agreements, trade names, and favorable leasehold interests.

All amortizable intangible assets are being amortized over their useful life on a straight-line basis.

Aggregate Amortization Expense:
For the 52 weeks ended May 1, 2021	$	17,943
For the 53 weeks ended May 2, 2020	$	19,310
For the 52 weeks ended April 27, 2019	$	21,314

Estimated Amortization Expense: (Fiscal Year)
2022	$	16,808
2023	$	13,429
2024	$	11,567
2025	$	11,210
2026	$	11,207
After 2026	$	86,683

For additional information about intangible assets, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

Leases

Effective April 28, 2019, we adopted Accounting Standards Codification ("ASC") Topic 842, Leases, and recognized lease assets and lease liabilities on the consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments. 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.

As a result of adopting ASC Topic 842, we recorded an initial operating lease right-of-use asset of $277,006 (inclusive of prepaid assets and accrued liabilities related to existing leases) and an operating lease liability of $294,727 as of April 28, 2019 for all leases that were not completed and with lease terms in excess of twelve months at that date. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

Impairment of Long-Lived Assets

As of May 1, 2021, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $89,172, $240,456, $150,904, and $29,105, respectively, on our consolidated balance sheet. As of May 2, 2020, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $97,739, $250,837, $175,125, and $35,307, respectively, on our consolidated balance sheet.

These amortizable intangible assets relate primarily to our customer and bookstore relationships with our colleges and university clients, and technology acquired. For additional information related to amortizable intangibles, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Intangible Assets.

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 and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Fiscal 2021 results have been significantly impacted by the ongoing COVID-19 pandemic, as many schools continued to adjust their learning models and on-campus activities during the Spring semester of Fiscal 2021. Many of the trends observed during the Fall 2020 semester continued into the Spring 2021 semester, as fewer students have returned to campus for the Spring semester, many colleges and universities continued with remote learning models and on-campus classes and activities

have been further curtailed, including many athletic conferences that have been either eliminated or severely restricted. These combined events impacted the Company’s course materials and general merchandise business. During the third quarter of Fiscal 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, comprised of $5,085, $13,328, $6,278 and $2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations. The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations. The significant assumptions used in the income approach included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value. Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 7. Fair Value Measurements.

In the first quarter of Fiscal 2020, we recorded an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable. During the fourth quarter of Fiscal 2020, in conjunction with COVID-19 related campus store closures, we evaluated certain of our long-lived assets associated with our Retail and Wholesale segments for impairment. Based on the results of the tests, for the Retail segment, we recognized an impairment loss of $587 related to store-level assets in restructuring and other charges. These long-lived assets were not recoverable and had a de minimis fair value, as determined using an income approach (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets.

During the fourth quarter of Fiscal 2019, in conjunction with the change to reporting segments and the interim goodwill impairment test noted below, as well as operational changes in certain long-lived asset groups, we evaluated certain of our long-lived assets for impairment and recognized an impairment loss of $8,466, comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations. These long-lived assets were not recoverable and had a de minimis fair value, as determined using the relief-from-royalty and income approaches (Level 3 input), resulting in a non-cash impairment charge for the full carrying value of those long-lived assets. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Significant Accounting Policies - Intangible Assets.

Goodwill

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets. 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. As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

During the third quarter of both Fiscal 2021 and Fiscal 2020, we completed our annual goodwill impairment test and concluded that 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.

During the third quarter of Fiscal 2019, we completed our annual goodwill impairment test and concluded that the fair value of the MBS and DSS reporting units, as they existed at that time, each exceeded their respective carrying values and no goodwill impairment was recognized. In the fourth quarter of Fiscal 2019, due to the change in our reporting units identified as a result of the change in our reportable segments, we recognized a total goodwill impairment (non-cash impairment loss) of $49,282 associated with the MBS reporting unit (as it existed at that date) and allocated $20,538 of goodwill to the Retail Segment and $28,744 of goodwill to the Wholesale Segment.

As of May 1, 2021, goodwill of approximately $67,015 was deductible for federal income tax purposes. This is higher than the goodwill balance reflected on the consolidated balance sheet as of May 1, 2021 due to impairment losses recorded in Fiscal 2018 and Fiscal 2019.

Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; and the determination of the fair value of each reporting unit. In performing the valuation, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions.

We estimated the fair value of our reporting units using a weighting of fair values derived from the income approach.

Under the income approach, we calculate the fair value of the reporting unit based on the present value of estimated future cash flows. Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital and tax rates. We also make certain forecasts about future economic conditions, interest rates, market data, and other observable trends, such as comparable store sales trends, recent changes in publisher relationships, and development of innovative digital products and services in the rapidly changing education landscape. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows.

Refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates for a discussion of key assumptions used in our testing.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sales 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 Part II - Item 8. Financial Statements and Supplementary Data - Note 4. 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 per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis.

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 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.

Long-Term Incentive Compensation

We have granted awards in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan (the “Equity Incentive Plan”). Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock, restricted stock units, performance shares, performance share units, and phantom share units. See Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense for additional information regarding expense recognition for each type of award.

Advertising Costs

The costs of advertising are expensed as incurred during the year pursuant to ASC No. 720-35, Advertising Costs. Advertising costs charged to selling and administrative expenses were $12,916, $10,349, and $10,636 in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 14. Income Taxes.

As of May 1, 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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Recent Accounting Pronouncements (Notes)

12 Months Ended

May 01, 2021

Recent Accounting Pronouncements

Note 3. Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU replaces the existing incurred loss impairment model for trade receivables with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates. These changes may result in earlier recognition of credit losses. We adopted this guidance during the first quarter of Fiscal 2021 with no cumulative-effect adjustment to retained earnings.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The guidance seeks to simplify the accounting for income taxes by removing the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance seeks to further simplify the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. We adopted ASU 2019-12 during the third quarter of Fiscal 2021. As a result of adopting this standard, we did not record a cumulative adjustment and there was not a material impact on our consolidated financial statements.

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Revenue Revenue (Notes)

12 Months Ended

May 01, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 4. 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 5. Segment Reporting for a description of each segment's product and service offerings.

See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Pronouncements for additional information related to our revenue recognition policies and Part II - Item 8. Financial Statements and Supplementary Data - Note 5. Segment Reporting for a description of each segments product and service offerings.

Disaggregation of Revenue

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Retail
Product Sales	$	1,157,115	$	1,493,044	$	1,645,357
Rental Income	134,150		179,863		195,883
Service and Other Revenue (a)	39,205		39,985		47,768
Retail Total Sales	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale Sales	$	165,825	$	198,353	$	223,374
DSS Sales (b)	$	27,374	$	23,661	$	21,339
Eliminations (c)	$	(89,779)	$	(83,843)	$	(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643

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

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

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

Effective April 4, 2021, as per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis.

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 both May 1, 2021 and May 2, 2020 on our 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 merchandising contracts for Fanatics and FLC as discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Partnership with Fanatics and FLC and Note 6. Equity and Earnings Per Share - Sale of Treasury Shares.

Deferred revenue of $13,469 and $4,670 is recorded within accrued liabilities and other long-term liabilities on our consolidated balance sheet, respectively, as of May 1, 2021 and $13,373 is recorded within accrued liabilities on our consolidated balance sheet as of May 2, 2020.

The following table presents changes in contract liabilities during the fiscal year ended May 1, 2021:

Deferred revenue as of April 27, 2019	$	20,418
Additions to deferred revenue during the period	193,235
Reductions to deferred revenue for revenue recognized during the period	(200,280)
Deferred revenue balance as of May 2, 2020	$	13,373
Additions to deferred revenue during the period	171,834
Reductions to deferred revenue for revenue recognized during the period	(167,068)
Deferred revenue balance as of May 1, 2021	$	18,139

As of May 1, 2021 we expect to recognize $13,469 of the deferred revenue balance within in the next 12 months.

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Segment Reporting (Notes)

12 Months Ended

May 01, 2021

Segment Reporting

Note 5. 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 this segments operations, see Part I - Item 1. Business.

Retail Segment

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical bookstores and 648 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 3,300 physical bookstores (including our Retail Segment's 769 physical bookstores) and sources and distributes new and used textbooks to our 648 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 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

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.

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.

	As of
	May 1, 2021		May 2, 2020
Total Assets
Retail	$	800,012	$	867,288
Wholesale	199,698		248,464
DSS	33,937		35,689
Corporate Services	4,771		4,991
Total Assets	$	1,038,418	$	1,156,432

As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Capital Expenditures
Retail	$	21,208	$	28,546	$	33,008
Wholesale	5,905		2,126		1,824
DSS (a)	9,662		5,425		11,444
Corporate Services	448		95		144
Total Capital Expenditures	$	37,223	$	36,192	$	46,420

(a) Primarily comprised of content development costs for bartleby.com textbook solutions which was launched in Fiscal 2019.

Summarized financial information for our reportable segments is reported below:

	52 weeks ended May 1, 2021 (a)		53 weeks ended May 2, 2020 (a)		52 weeks ended April 27, 2019
Sales:
Retail	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale	165,825		198,353		223,374
DSS	27,374		23,661		21,339
Eliminations	(89,779)		(83,843)		(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643
Gross Profit
Retail (b)	$	195,617	$	383,282	$	451,871
Wholesale	34,683		39,805		56,341
DSS	22,318		19,313		20,030
Eliminations	43		149		(516)
Total Gross Profit	$	252,661	$	442,549	$	527,726
Depreciation and Amortization
Retail	$	39,634	$	47,099	$	51,728
Wholesale	5,461		5,963		6,014
DSS	7,763		8,670		7,974
Corporate Services	109		128		149
Total Depreciation and Amortization	$	52,967	$	61,860	$	65,865
Operating Loss
Retail (c)	$	(154,592)	$	(24,445)	$	3,751
Wholesale (c)	14,732		12,909		(2,131)
DSS	(8,132)		(8,529)		(3,345)
Corporate Services	(28,376)		(23,077)		(25,463)
Eliminations	192		359		(466)
Total Operating Loss (c)	$	(176,176)	$	(42,783)	$	(27,654)
The following is a reconciliation of segment Operating Loss to consolidated Income Before Income Taxes
Total Operating Loss	$	(176,176)	$	(42,783)	$	(27,654)
Interest Expense, net	(8,087)		(7,445)		(9,780)
Total Loss Before Income Taxes	$	(184,263)	$	(50,228)	$	(37,434)

(a)In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)In Fiscal 2021, gross margin includes a merchandise inventory loss and write-off of $14,960 in the Retail Segment. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

(c)In Fiscal 2021, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, in the Retail segment related to certain of our store-level long-lived assets. In Fiscal 2020, we recorded an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which were not recoverable. In Fiscal 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill ($20,538 and $28,744 in our Retail and Wholesale Segments, respectively).and $8,466 of long-lived assets. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

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Equity and Earnings Per Share (Notes)

12 Months Ended

May 01, 2021

Equity and Earnings Per Share [Text Block]

Note 6. Equity and Earnings Per Share

Equity

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of May 1, 2021, 51,378,913 shares of our common stock and 0 shares of our preferred stock were issued and outstanding. Our common stock trades on the NYSE under the symbol “BNED”.

The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of shares of our common stock do not have cumulative voting rights in the election of directors. The holders of our common stock will be entitled to share ratably in our assets legally available for distribution to our stockholders, subject to the prior distribution rights of preferred stock, if any, then outstanding. The holders of our common stock do not have preemptive rights or preferential rights to subscribe for shares of our capital stock.

We have reserved 10,409,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. See Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense.

Repurchase of Shares

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 Fiscal 2021, 2020, and Fiscal 2019, we did not purchase shares under the stock repurchase program. As of May 1, 2021, approximately $26,669 remains available under the stock repurchase program.

During the Fiscal 2021, Fiscal 2020, and Fiscal 2019, we also repurchased 414,174, 374,733 shares, and 351,043 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

Sale of Treasury Shares

In December 2020, we entered into a new merchandising partnership with Fanatics and FLC which included a strategic equity investment in the Company. Fanatics, Inc. and Lids Holdings, Inc. jointly purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $15,000, representing a share price of $6.50 per share. The premium price paid above the fair market value of our common stock at closing was approximately $4,131 and was recorded as a contract liability ($175 in accrued liabilities and $3,956 in other long-term liabilities our consolidated balance sheet) which is expected to be recognized over the term of the merchandising contracts for Fanatics and FLC, as discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Partnership with Fanatics and FLC.

Dividends

We paid no other dividends to common stockholders during Fiscal 2021, Fiscal 2020 and Fiscal 2019. We do not intend to pay dividends on our common stock in the foreseeable future.

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 Fiscal 2021, Fiscal 2020 and Fiscal 2019, average shares of 3,387,185, 3,795,603, and 2,939,089, respectively, were excluded from the diluted earnings per share calculation using the two-class method as their inclusion would have been antidilutive.

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

(shares in thousands)	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(131,787)	$	(38,250)	$	(24,374)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	49,669		48,013		47,306
Loss per share of Common Stock:
Basic and diluted loss per share of Common Stock	$	(2.65)	$	(0.80)	$	(0.52)

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Fair Values of Financial Instruments (Notes)

12 Months Ended

May 01, 2021

Fair Values of Financial Instruments

Note 7. Fair Values 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 and Liabilities

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.

During the 52 weeks ended May 1, 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, on the consolidated statement of operations. The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using our best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

During the 53 weeks ended May 2, 2020, we recognized an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable.

During the 52 weeks ended April 27, 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill and $8,466 of long-lived assets, comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations.

For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

The following table shows the fair values of our non-financial assets and liabilities that were required to be remeasured at fair value on a non-recurring basis and the total impairments recorded as a result of the remeasurement process:

	52 weeks ended May 1, 2021						53 weeks ended May 2, 2020
	Carrying Value Prior to Impairment		Fair Value		Impairment Loss (non-cash)		Carrying Value Prior to Impairment		Fair Value		Impairment Loss (non-cash)
Receivables, net	$	—	$	—	$	—	$	245	$	—	$	245
Property and equipment, net	5,505		420		5,085		300		—		300
Operating lease right-of-use assets	26,427		13,099		13,328		—		—		—
Intangible assets, net	7,723		1,445		6,278		—		—		—
Other noncurrent assets	3,539		600		2,939		—		—		—
Accrued liabilities	—		—		—		(112)		—		(112)
Total	$	43,194	$	15,564	$	27,630	$	433	$	—	$	433

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 May 1, 2021, we recorded a liability of $3,845 (Level 2 input) which is reflected in accrued liabilities ($2,509) and other long-term liabilities ($1,336) on the consolidated balance sheet. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 13. Long-Term Incentive Compensation Expense.

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Credit Facility (Notes)

12 Months Ended

May 01, 2021

Credit Facility

Note 8. 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.

During the 52 weeks ended May 1, 2021, we borrowed $722,600 and repaid $719,700 under the Credit Agreement, and had outstanding borrowings of $127,600 and $50,000 under the Credit Facility and FILO Facility, respectively, as of May 1, 2021. During the 53 weeks ended May 2, 2020, we borrowed $600,900 and repaid $559,700 under the Credit Agreement, and had outstanding borrowings of $99,700 and $75,000 under the Credit Facility and FILO Facility, respectively, as of May 2, 2020. During 52 weeks ended April 27, 2019, we borrowed $521,200 and repaid $584,100 under the Credit Agreement, and had outstanding borrowings of $33,500 and $100,000 under the Credit Facility and FILO Facility, respectively, as of April 27, 2019. As of both May 1, 2021 and May 2, 2020, we issued $4,759 in letters of credit under the Credit Facility, respectively.

During 52 weeks ended May 1, 2021, we incurred debt issuance costs totaling $1,076 related to the March 31, 2021 Credit Facility amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

Interest under the Credit Facility accrues, at our election, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the Credit Facility. Loans will initially bear interest at LIBOR plus 2.00% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 1.00% per annum, in the alternative, and thereafter the interest rate will fluctuate between LIBOR plus 2.00% per annum and LIBOR plus 1.50% per annum (or between the alternate base rate plus 1.00% per annum and the alternate base rate plus 0.50% per annum), based upon the excess availability under the Credit Facility at such time.

Loans under the FILO Facility will bear interest at a rate equal to the LIBOR rate, plus 3.750%. In connection with the waiver, the applicable margin for credit extensions made under the FILO Facility after March 31, 2021 through the end of 2021 was increased by 0.50% (to 3.75% per annum for LIBO rate loans and 2.75% for base rate loans). The FILO Facility will be available solely during the draw period each year, from April 1 through July 31. We are required to borrow 100% of the aggregate commitments under the FILO Facility on April 1 of each year, and the loans must be repaid in full (including interest and fees) on July 31 of each year. The commitments under the FILO Facility will decrease from $50,000 to $25,000 on August 1, 2021. We will pay a commitment fee of 0.375% on the daily unused portion of the FILO Facility.

The Credit Facility contains customary negative covenants, which limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements and a minimum excess availability of the greater of 10% of the Loan Cap and $25,000 when the FILO is funded) would be triggered, and the lenders would have the right to assume dominion and control over the Company's cash. The Credit Facility includes an anti-cash hoarding provision, which limits maximum excess cash allowed to $50,000 when the FILO is funded.

The Credit Facility contains customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit Facility also contains customary affirmative covenants and representations and warranties. We are in compliance with all covenants, representations and warranties under the Credit Facility as of 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.

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Leases (Notes)

12 Months Ended

May 01, 2021

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

Note 9. Leases

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted FASB ASC 842, Leases (Topic 842), which required us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all lease arrangements. 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 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:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020
Variable lease expense	$	69,511	$	73,455
Operating lease expense	108,282		159,289
Net lease expense	$	177,793	$	232,744

The decrease in lease expense is primarily due to lower sales for contracts based on a percentage of revenue and the impact of the timing and reduction of minimum contractual guarantees.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of May 1, 2021:

	As of
	May 1, 2021
Fiscal 2022	$	99,657
Fiscal 2023	48,621
Fiscal 2024	40,506
Fiscal 2025	34,748
Fiscal 2026	27,045
Thereafter	70,234
Total lease payments	320,811
Less: imputed interest	(43,518)
Operating lease liabilities at period end	$	277,293

Future lease payment obligations related to leases that were entered into, but did not commence as of May 1, 2021, were not material.

The following summarizes additional information related to our operating leases:

	As of			As of
	May 1, 2021			May 2, 2020
Weighted average remaining lease term (in years)	5.5 years			5.2 years
Weighted average discount rate	4.9		%	4.6		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	111,167		$	140,670
ROU assets obtained in exchange for lease liabilities from initial recognition	$	123,556		$	131,175

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Supplementary Information Supplementary Information (Notes)

12 Months Ended

May 01, 2021

Other Income and Expenses [Abstract]

Supplementary Information [Text Block]

Note 10. Supplementary Information

Impairment Loss (non-cash)

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. For information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies.

During the 52 weeks ended May 1, 2021, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, in the Retail segment comprised of $5,085, $13,328, $6,278 and $2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

During the 53 weeks ended May 2, 2020, we recognized an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which are not recoverable.

During the 52 weeks ended April 27, 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill ($20,538 and $28,744 in our Retail and Wholesale Segments, respectively).and $8,466 of long-lived assets,

comprised of $8,138 of intangible assets, primarily acquired technology, and $328 of property and equipment related to our LoudCloud and Promoversity operations.

Restructuring and Other Charges

During the 52 weeks ended May 1, 2021, we recognized restructuring and other charges totaling $9,960, comprised primarily of $5,888 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($3,246 is included in accrued liabilities in the consolidated balance sheet as of May 1, 2021), $5,213 for professional service costs related to restructuring, process improvements, the financial advisor strategic review process, costs related to development and integration associated with Fanatics and FLC partnership agreements and shareholder activist activities, and $454 related to liabilities for a facility closure, partially offset by a $1,595 in an actuarial gain related to a frozen retirement benefit plan (non-cash).

During the 53 weeks ended May 2, 2020, we recognized restructuring and other charges totaling $18,567 comprised of $12,667 for severance and other employee termination and benefit costs associated with several management changes ($10,370 is included in accrued liabilities in the consolidated balance sheet as of May 2, 2020), the elimination of various positions as part of cost reduction objectives, and professional service costs for process improvements, and $2,695 related to an actuarial loss for a frozen retirement benefit plan (non-cash), $2,841 for professional service costs for shareholder activist activities, and $587 related to a store-level asset impairment charge, offset by $223 related to reduction of liabilities for a facility closure.

During the 52 weeks ended April 27, 2019, we recognized restructuring and other charges totaling $7,233 comprised of $4,554 for severance and transition payments related to senior management changes, other employee termination and benefit costs, and other charges totaling $2,679, primarily comprised of $2,274 in an actuarial loss for a frozen retirement benefit plan (non-cash), $281 related to additional liabilities for a facility closure, and a write-off of $118 of existing unamortized debt issuance costs.

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Related Party Transactions Related Party Transctions (Notes)

12 Months Ended

May 01, 2021

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 11. Related Party Transactions

MBS Textbook Exchange, LLC

Prior to the acquisition of MBS on February 27, 2017, MBS was considered a related-party as it was majority-owned by Leonard Riggio, who is a principal owner holding substantial shares of our common stock, and other members of the Riggio family. Subsequent to the acquisition, the consolidated financial statements include the accounts of MBS and all material intercompany accounts and transactions have been eliminated in consolidation.

MBS leases its main warehouse and distribution facility located in Columbia, Missouri from MBS Realty Partners L.P. which is majority-owned by Leonard Riggio, with the remaining ownership by other sellers of MBS. The lease was originally entered into in 1991 and included a renewal option which extended the lease through September 1, 2023. Based upon a valuation performed as of the acquisition date, the lease was determined to be favorable from a lessee perspective with below market rent. Rent payments to MBS Realty Partners L.P. were approximately $1,380 in Fiscal 2021, Fiscal 2020 and Fiscal 2019.

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Employees' Defined Contribution Plan

12 Months Ended

May 01, 2021

Employees' Defined Contribution Plan

Note 12. 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 $0, $5,015, and $6,702 during 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Effective April 2020, due to the significant impact as a result of COVID-19 related campus store closures, we have temporarily suspended employer matching contributions into our 401(k) plans through the end of Fiscal 2021.

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Stock-Based Compensation (Notes)

12 Months Ended

May 01, 2021

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement [Text Block]

Note 13. Long-Term Incentive Compensation Expense

We have reserved 10,409,345 shares of our common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and stock options.

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.

Restricted Stock Awards

A RS award is an award of common stock that is subject to certain restrictions during a specified period. Restricted stock awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. Restricted stock awards will have a minimum vesting period of one year.

A RSU is a grant valued in terms of our common stock, but no stock is issued at the time of grant. Each restricted stock unit may be redeemed for one share of our common stock once vested. Restricted stock units are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). Restricted stock units generally vest over a period of three years, but will have a minimum vesting period of one year.

Performance Share Awards

PS awards and PSU awards were granted to employees. Each PS and PSU may be redeemed for one share of our common stock once vested and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the PS or PSU awards except in very limited circumstances and with the consent of the compensation committee. Shares of unvested PSU awards have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares or units, as the case may be, have vested). The PS and PSU awards will only vest based upon the achievement of pre-established performance goals related to Adjusted EBITDA, segment revenue, new business, and/or total shareholder return performance achieved over a period of time. The PS and PSU awards will vest based on company performance and/or market conditions during the subsequent two year period with one additional year of time-based vesting. The number of PS and PSU awards that will vest range from 0%-150% of the target award based on actual performance.

Stock Options

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. During Fiscal 2021, we granted 1,250,518 stock options with an exercise price of $2.46 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 1,250,518 stock options with an exercise price of $5.00 per stock option (Stock Option Grant #2) granted to employees. The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.

The following summarizes the stock option fair value assumptions:

	Stock Option Grant #1			Stock Option Grant #2
Exercise Price	$	2.46		$	5.00
Valuation method utilized	Black-Scholes			Monte Carlo
Risk-free interest rate	0.27		%	0.68		%
Expected option term	6.2 years			10.0 years
Company volatility	73		%	73		%
Dividend yield	—		%	—		%
Grant date fair value per award	$	1.58		$	1.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. For Stock Option Grant #1, we are permitted to use the simplified approach to estimate the expected term of the stock options, which typically assumes exercise occurs at the mid-point between the end of the vesting period and the expiration date. The simplified approach is not allowed for premium-priced options (Stock Option Grant #2), which were estimated using a stock price multiple, as there is no option exercise history which to base an early exercise option. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term.

Phantom Shares

During Fiscal 2021, we granted 2,397,953 phantom share units granted to employees. Each phantom share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed three times the grant date stock price. The phantom shares vest and will be settled in three equal installments commencing one year after the date of grant. The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model.

The average fair value on the date of grant was determined based on using risk-free rates and annual volatility rates for each the three tranches within the respective grant as detailed in the table below based upon their vesting dates and remaining time to maturity. 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 of the respective awards. The following summarizes the phantom share fair value assumptions:

	Phantom Share Grant #1		Phantom Share Grant #2
Grant Date Stock Price	$	2.46	$	7.63
Stock Price Cap	$	7.38	$	22.89
Valuation method utilized	Black-Scholes		Black-Scholes
Grant Date Risk Free Rate Range	0.12% - 0.15%		0.07% - 0.31%
Grant Date Volatility Range	86% - 114%		90% - 110%
Average Grant date fair value per award	$	1.88	$	5.79

As of May 1, 2021, we recorded a liability of $3,845 (Level 2 input) of which $2,509 and $1,336 is reflected in accrued liabilities and other long-term liabilities on the consolidated balance sheet, respectively.

Long-Term Incentive Compensation Activity

The following table presents a summary of awards activity related to our current Equity Incentive Plan:

	Restricted Stock Awards			Restricted Stock Units			Performance Share Units
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	38,096	$	3.15	2,250,078	$	4.21	1,323,767	$	4.20
Granted	146,343	$	2.40	243,905	$	2.40	—	$	—
Vested	(38,096)	$	—	(1,210,566)	$	4.48	(138,060)	$	7.97
Forfeited (a)	—	$	—	(83,566)	$	4.18	(590,474)	$	5.34
Balance, May 1, 2021	146,343	$	2.40	1,199,851	$	3.56	595,233	$	2.23
	Stock Options			Phantom Shares
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	—	$	—	—	$	—
Granted	2,501,036	$	1.43	2,397,953	$	1.97
Exercised/Vested	—	$	—	—	$	—
Forfeited	(310,046)	$	1.43	(193,090)	$	1.88
Balance, May 1, 2021	2,190,990	$	1.43	2,204,863	$	1.97

(a) The PSUs forfeitures reflect a cumulative adjustment to reflect changes to the expected level of achievement of the respective grants.

Total fair value of vested share awards since the inception of the Equity Incentive Plan is $42,125.

Long-Term Incentive Compensation Expense

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Stock-based awards
Restricted stock expense	$	226	$	120	$	110
Restricted stock units expense	3,919		6,253		7,846
Performance shares expense (a)	—		12		87
Performance share units expense (a)	283		253		974
Stock option expense	667		—		—
Sub-total stock-based awards:	$	5,095	$	6,638	$	9,017
Cash settled awards
Phantom share units expense	$	3,845	$	—	$	—
Total compensation expense for long-term incentive awards	$	8,940	$	6,638	$	9,017

(a)     Long-term incentive compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants.

Total unrecognized compensation cost related to unvested awards as of May 1, 2021 was $11,099 and is expected to be recognized over a weighted-average period of 2.28 years.

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Income Taxes Income Taxes (Notes)

12 Months Ended

May 01, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 14. Income Taxes

For Fiscal 2021, Fiscal 2020, and Fiscal 2019, we had no material revenue or expense in jurisdictions outside the United States.

Impact of U.S. Tax Reform

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, among other provisions. In accordance with SAB 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118), we completed our accounting for the tax effects of the enactment of the Act within the provisional period as of April 27, 2019. We recorded measurement period adjustments during Fiscal 2019 to reduce our net deferred tax liability by $3,911, which primarily related to the acceleration of certain deductions as permitted by the U.S. tax code. The most significant impact of the legislation for the Company was a $20,425 reduction of the value of our net deferred (which represents future tax liabilities) and long-term tax liabilities as a result of lowering the U.S. corporate income tax rate from 35% to 21%, which was recorded in Fiscal 2018. We also recorded a liability associated with the one-time transition tax, however, such amount is not material.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”) was enacted. We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contribution and net operating loss limitations (“NOLs”), modifications to the deductibility of business interest expense, as well as Alternative Minimum Tax (“AMT”) credit acceleration. The most significant impact of the legislation for the Company was an income tax benefit of $7,164 for the carryback of NOLs to higher tax rate years, recorded in Fiscal 2021. As of May 1, 2021, we recognized a current income tax receivable for NOL carrybacks of $30,492 in prepaid and other current assets on the consolidate balance sheet.

Income tax benefits for Fiscal 2021, Fiscal 2020 and Fiscal 2019 are as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Current:
Federal	$	(36,187)	$	(5,471)	$	(6,494)
State	(846)		(1,127)		(2,035)
Total Current	(37,033)		(6,598)		(8,529)
Deferred:
Federal	(6,100)		(4,086)		(3,681)
State	(9,343)		(1,294)		(850)
Total Deferred	(15,443)		(5,380)		(4,531)
Total	$	(52,476)	$	(11,978)	$	(13,060)

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Federal statutory income tax rate (a)	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	4.4		3.7		6.3
Permanent book / tax differences	(0.9)		(2.9)		(3.9)
CARES Act NOL Carry-back	3.9		—		—
Provisional remeasurement due to Tax Legislation	—		—		10.4
Credits	—		0.5		0.3
Other, net	0.1		1.5		0.8
Effective income tax rate	28.5	%	23.8	%	34.9	%

The effective tax rate for Fiscal 2021 is significantly lower as compared to the comparable prior year period due to various permanent differences and the impact of the CARES Act recorded.

One percentage point on our Fiscal 2021 effective tax rate is approximately $1,843. The permanent book / tax differences are principally comprised of non-deductible compensation, non-deductible meals and entertainment costs, and federal income tax credits.

We account for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. The significant components of our deferred taxes consisted of the following:

	As of
	May 1, 2021		May 2, 2020
Deferred tax assets:
Estimated accrued liabilities	$	11,559	$	11,046
Inventory	8,073		7,167
Stock-based compensation	1,622		1,511
Insurance liability	505		528
Operating lease liabilities	65,456		65,334
Tax credits	433		484
Goodwill	16,759		18,438
Net operating losses	10,810		4,992
Other	10,570		8,853
Gross deferred tax assets	125,787		118,353
Valuation allowance	(1,202)		(1,231)
Net deferred tax assets	124,585		117,122
Deferred tax liabilities:
Intangible asset amortization	(33,547)		(37,864)
Operating lease right-of-use assets	(61,896)		(64,695)
Property and equipment	(5,894)		(6,758)
Gross deferred tax liabilities	(101,337)		(109,317)
Net deferred tax asset	$	23,248	$	7,805

As of May 1, 2021, we had $0 of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at April 28, 2018	$	97
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(6)
Balance at April 27, 2019	$	91
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(39)
Balance at May 2, 2020	$	52
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(52)
Balance at May 1, 2021	$	—

Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of May 1, 2021 and May 2, 2020, we had accrued $0 and $3, respectively, for net interest and penalties. The change in the amount accrued for net interest and penalties includes $3 in reductions for net interest and penalties recognized in income tax expense in our Fiscal 2021 consolidated statement of operations.

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. In evaluating our ability to utilize our deferred tax assets, we considered all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. We have recorded a valuation allowance of $1,202 and $1,231 for May 1, 2021 and May 2, 2020, respectively.

As of May 1, 2021, and based on our tax year ended January 2021, we had state net operating loss carryforwards (“NOLs”) of approximately $196,180 that are available to offset taxable income in our respective taxing jurisdiction beginning in the current period and that expire beginning in 2030. We had net state tax credit carryforwards totaling $548, which expire beginning in 2022.

As of May 2, 2021, we recorded $200 of foreign withholding tax related to repatriations of earnings from certain foreign subsidiaries. If additional earnings in these foreign subsidiaries were repatriated in the future, additional income and withholding tax expense would be incurred. Additional income and withholding tax expense on any future repatriated earnings is estimated to be less than $100.

We are subject to U.S. federal income tax, as well as income tax in jurisdictions of each state having an income tax. The tax years that remain subject to examination are primarily Fiscal 2015 and forward. Some earlier years remain open for a small minority of states. We retain an income tax liability for periods prior to the Spin-Off from Barnes & Noble, Inc. only for returns filed on a stand-alone basis.

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Legal Proceedings (Notes)

12 Months Ended

May 01, 2021

Legal Proceedings

Note 15. 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 in the United States District Court for the District of Delaware, the United States District Court for the District of New Jersey, and the United States District Court for the Northern District of Illinois against the Company, along with several publishers, another collegiate bookstore retailer, and an industry association. The plaintiffs are 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 has 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 October 16, 2020, three named student plaintiffs filed a Consolidated Amended Complaint, as did the retailer plaintiffs. The student plaintiffs and retailer plaintiffs each filed a Second Consolidated Amended Complaint on December 18, 2020, which all Defendants jointly moved to dismiss on January 22, 2021. On June 14, 2021, the Court ordered both cases dismissed with prejudice. Should Plaintiffs pursue an appeal, we intend to vigorously defend this matter. We are currently unable to estimate any potential losses.

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Commitments and Contingencies Commitments and Contingencies (Notes)

12 Months Ended

May 01, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 16. Commitments and Contingencies

We generally operate our physical bookstores pursuant to multi-year school management contracts under which a school designates us to operate the official school physical bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these service agreements for our physical bookstores under lease accounting. Prior to the adoption of FASB ASC 842, Leases (Topic 842) ("ASC 842") as discussed below, the excess of such minimum contract expense over actual contract payments (net of school allowances) was reflected in other long-term liabilities and accrued liabilities in the consolidated balance sheets.

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted ASC 842, which requires us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all fixed lease arrangements (excluding variable obligations) with a term greater than twelve months. For additional information on lease expense and minimum fixed lease obligations, excluding variable commissions, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

The expense related to our college and university contracts for physical bookstores, including rent expense, and other facility costs in the consolidated statements of operations for periods prior to adoption of ASC 842 in Fiscal 2020 are as follows: 

	52 weeks ended April 27, 2019
Minimum contract expense	$	169,131
Percentage contract expense	73,368
Total expense	$	242,499

Purchase obligations, which includes information technology contracts and inventory purchase commitments, as of May 1, 2021 are as follows: 

Less Than 1 Year	$	14,756
1-3 Years	10,994
3-5 Years	538
Total	$	26,288

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Schedule II Valuation and Qualifying Accounts Schedule II Valuation and Qualifying Accounts (Notes)

12 Months Ended

May 01, 2021

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

Schedule II—Valuation and Qualifying Accounts

Receivables Valuation and Qualifying Accounts

(In thousands)

For the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019:

	Balance at beginning of period		Charge (recovery) to costs and expenses		Write-offs		Balance at end of period
Allowance for Doubtful Accounts
May 1, 2021	$	1,986	$	4,600	$	(2,992)	$	3,594
May 2, 2020	$	2,135	$	1,710	$	(1,859)	$	1,986
April 27, 2019	$	2,083	$	2,670	$	(2,618)	$	2,135
	Balance at beginning of period		Addition Charged to Costs		Deductions		Balance at end of period
Sales Returns Reserves
May 1, 2021	$	5,063	$	145,595	$	(147,327)	$	3,331
May 2, 2020	$	5,282	$	186,305	$	(186,524)	$	5,063
April 27, 2019	$	5,229	$	197,799	$	(197,746)	$	5,282

All other schedules are omitted because the conditions requiring their filing do not exist, or because the required information is provided in the consolidated financial statements, including the notes thereto.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

May 01, 2021

Lessee, Leases [Policy Text Block]

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted FASB ASC 842, Leases (Topic 842), which required us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all lease arrangements. 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 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.

Share-based Payment Arrangement [Policy Text Block]

We have reserved 10,409,345 shares of our common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and stock options.

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.

Restricted Stock Awards

A RS award is an award of common stock that is subject to certain restrictions during a specified period. Restricted stock awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. Restricted stock awards will have a minimum vesting period of one year.

A RSU is a grant valued in terms of our common stock, but no stock is issued at the time of grant. Each restricted stock unit may be redeemed for one share of our common stock once vested. Restricted stock units are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). Restricted stock units generally vest over a period of three years, but will have a minimum vesting period of one year.

Performance Share Awards

PS awards and PSU awards were granted to employees. Each PS and PSU may be redeemed for one share of our common stock once vested and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the PS or PSU awards except in very limited circumstances and with the consent of the compensation committee. Shares of unvested PSU awards have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares or units, as the case may be, have vested). The PS and PSU awards will only vest based upon the achievement of pre-established performance goals related to Adjusted EBITDA, segment revenue, new business, and/or total shareholder return performance achieved over a period of time. The PS and PSU awards will vest based on company performance and/or market conditions during the subsequent two year period with one additional year of time-based vesting. The number of PS and PSU awards that will vest range from 0%-150% of the target award based on actual performance.

Stock Options

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. During Fiscal 2021, we granted 1,250,518 stock options with an exercise price of $2.46 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 1,250,518 stock options with an exercise price of $5.00 per stock option (Stock Option Grant #2) granted to employees. The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.

The following summarizes the stock option fair value assumptions:

	Stock Option Grant #1			Stock Option Grant #2
Exercise Price	$	2.46		$	5.00
Valuation method utilized	Black-Scholes			Monte Carlo
Risk-free interest rate	0.27		%	0.68		%
Expected option term	6.2 years			10.0 years
Company volatility	73		%	73		%
Dividend yield	—		%	—		%
Grant date fair value per award	$	1.58		$	1.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. For Stock Option Grant #1, we are permitted to use the simplified approach to estimate the expected term of the stock options, which typically assumes exercise occurs at the mid-point between the end of the vesting period and the expiration date. The simplified approach is not allowed for premium-priced options (Stock Option Grant #2), which were estimated using a stock price multiple, as there is no option exercise history which to base an early exercise option. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term.

Phantom Shares

During Fiscal 2021, we granted 2,397,953 phantom share units granted to employees. Each phantom share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed three times the grant date stock price. The phantom shares vest and will be settled in three equal installments commencing one year after the date of grant. The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model.

The average fair value on the date of grant was determined based on using risk-free rates and annual volatility rates for each the three tranches within the respective grant as detailed in the table below based upon their vesting dates and remaining time to maturity. 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 of the respective awards. The following summarizes the phantom share fair value assumptions:

	Phantom Share Grant #1		Phantom Share Grant #2
Grant Date Stock Price	$	2.46	$	7.63
Stock Price Cap	$	7.38	$	22.89
Valuation method utilized	Black-Scholes		Black-Scholes
Grant Date Risk Free Rate Range	0.12% - 0.15%		0.07% - 0.31%
Grant Date Volatility Range	86% - 114%		90% - 110%
Average Grant date fair value per award	$	1.88	$	5.79

As of May 1, 2021, we recorded a liability of $3,845 (Level 2 input) of which $2,509 and $1,336 is reflected in accrued liabilities and other long-term liabilities on the consolidated balance sheet, respectively.

Basis of Presentation

Basis of Presentation

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”). In the opinion of the Company’s management, the accompanying 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.

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended May 1, 2021 (“Fiscal 2021”), 53 weeks ended May 2, 2020 (“Fiscal 2020”), and 52 weeks ended April 27, 2019 (“Fiscal 2019”).

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. 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.

As discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of the COVID-19 pandemic on our operations affects the comparability of our results of operations and cash flows.

Consolidation

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.

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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

We consider all short-term, highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

As of May 1, 2021, we had restricted cash of $8,790, comprised of $7,893 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to FLC for logo merchandise sales as per the merchandising partnership agreement and $897 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization.

As of May 2, 2020, we had restricted cash of $766 included in other noncurrent assets in the consolidated balance sheet for amounts held in trust for future distributions related to employee benefit plans.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Accounts Receivable

Receivables represent customer, private and public institutional and government billings (colleges, universities and other financial aid providers), credit/debit card receivables, advances for book buybacks, advertising and other receivables due within one year. Components of accounts receivables are as follows:

	As of
	May 1, 2021		May 2, 2020
Trade accounts	$	99,583	$	75,702
Advances for book buybacks	2,901		766
Credit/debit card receivables	4,433		2,177
Other receivables	14,155		12,206
Total receivables, net	$	121,072	$	90,851

Accounts receivable are presented on our consolidated balance sheets net of allowances. An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historical trends, the financial condition of our customers and an evaluation of economic conditions. We write-off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer. Allowance for doubtful accounts were $3,594, and $1,986 as of May 1, 2021 and May 2, 2020, respectively.

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. There were no LIFO adjustments in Fiscal 2021, Fiscal 2020 and Fiscal 2019.

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. The Retail Segments four largest suppliers, excluding the supply sourced from our Wholesale Segment, accounted for approximately 35% of our merchandise purchased during the 52 weeks ended May 1, 2021. For our Wholesale Segment, the four largest suppliers, excluding textbooks purchased from students at our Retail Segment's bookstores, accounted for approximately 32% of merchandise purchases during the 52 weeks ended May 1, 2021.

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.

Property, Plant and Equipment, Planned Major Maintenance Activities, Policy [Policy Text Block]

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over estimated useful lives. Maintenance and repairs are expensed as incurred, however major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. We had $35,024, $42,550, and $44,550, of depreciation expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Content development costs are primarily related to bartleby.com textbook solutions which was launched in Fiscal 2019. Content amortization is computed using the straight-line method over estimated useful lives. Amortization of content development costs is recorded to cost of goods sold. We had $5,034, $4,082, and $1,096, of content amortization expense in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Components of property and equipment are as follows:

		As of
	Useful Life	May 1, 2021		May 2, 2020
Property and equipment:
Leasehold improvements	(a)	$	131,784	$	141,602
Machinery, equipment and display fixtures	3 - 5	247,979		246,447
Computer hardware and capitalized software costs	(b)	152,941		145,764
Office furniture and other	2 - 7	62,031		62,209
Content development costs	3 - 5	25,526		16,729
Construction in progress		4,444		3,878
Total property and equipment		624,705		616,629
Less accumulated depreciation and amortization		535,533		518,890
Total property and equipment, net		$	89,172	$	97,739

(a)     Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from 1 - 15 years.

(b)     System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 2 - 5 years.

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 and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

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

Goodwill

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets. 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. As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

During the third quarter of both Fiscal 2021 and Fiscal 2020, we completed our annual goodwill impairment test and concluded that 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.

During the third quarter of Fiscal 2019, we completed our annual goodwill impairment test and concluded that the fair value of the MBS and DSS reporting units, as they existed at that time, each exceeded their respective carrying values and no goodwill impairment was recognized. In the fourth quarter of Fiscal 2019, due to the change in our reporting units identified as a result of the change in our reportable segments, we recognized a total goodwill impairment (non-cash impairment loss) of $49,282 associated with the MBS reporting unit (as it existed at that date) and allocated $20,538 of goodwill to the Retail Segment and $28,744 of goodwill to the Wholesale Segment.

As of May 1, 2021, goodwill of approximately $67,015 was deductible for federal income tax purposes. This is higher than the goodwill balance reflected on the consolidated balance sheet as of May 1, 2021 due to impairment losses recorded in Fiscal 2018 and Fiscal 2019.

Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; and the determination of the fair value of each reporting unit. In performing the valuation, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions.

We estimated the fair value of our reporting units using a weighting of fair values derived from the income approach.

Under the income approach, we calculate the fair value of the reporting unit based on the present value of estimated future cash flows. Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital and tax rates. We also make certain forecasts about future economic conditions, interest rates, market data, and other observable trends, such as comparable store sales trends, recent changes in publisher relationships, and development of innovative digital products and services in the rapidly changing education landscape. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to execute on the projected cash flows.

Refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates for a discussion of key assumptions used in our testing.

Revenue Recognition

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of our revenue is derived from the sales 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 Part II - Item 8. Financial Statements and Supplementary Data - Note 4. 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 per the FLC merchandising partnership agreement, logo and emblematic general merchandise sales were fulfilled by FLC and we recognized commission revenue earned for these sales on a net basis.

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 Goods and Service [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 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.

Advertising Cost [Policy Text Block]

Advertising CostsThe costs of advertising are expensed as incurred during the year pursuant to ASC No. 720-35, Advertising Costs. Advertising costs charged to selling and administrative expenses were $12,916, $10,349, and $10,636 in the consolidated statement of operations for the 52 weeks ended May 1, 2021, 53 weeks ended May 2, 2020, and 52 weeks ended April 27, 2019, respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 14. Income Taxes.

As of May 1, 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.

Segment Reporting, Policy [Policy Text Block]

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 this segments operations, see Part I - Item 1. Business.

Retail Segment

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical bookstores and 648 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 3,300 physical bookstores (including our Retail Segment's 769 physical bookstores) and sources and distributes new and used textbooks to our 648 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 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

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.

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.

Share Repurchase [Policy Text Block]

Repurchase of SharesOn 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.

Dividend [Policy Text Block]

DividendsWe paid no other dividends to common stockholders during Fiscal 2021, Fiscal 2020 and Fiscal 2019. We do not intend to pay dividends on our common stock in the foreseeable future.

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.

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.

Non-Financial Assets and Liabilities

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.

Debt, Policy [Policy Text Block]

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

Commitments and Contingencies, Policy [Policy Text Block]

We generally operate our physical bookstores pursuant to multi-year school management contracts under which a school designates us to operate the official school physical bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these service agreements for our physical bookstores under lease accounting. Prior to the adoption of FASB ASC 842, Leases (Topic 842) ("ASC 842") as discussed below, the excess of such minimum contract expense over actual contract payments (net of school allowances) was reflected in other long-term liabilities and accrued liabilities in the consolidated balance sheets.

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted ASC 842, which requires us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all fixed lease arrangements (excluding variable obligations) with a term greater than twelve months. For additional information on lease expense and minimum fixed lease obligations, excluding variable commissions, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

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Segment Reporting Segment Reporting (Policies)

12 Months Ended

May 01, 2021

Segment Reporting [Abstract]

Segment Reporting, Policy [Policy Text Block]

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 this segments operations, see Part I - Item 1. Business.

Retail Segment

The Retail Segment operates 1,417 college, university, and K-12 school bookstores, comprised of 769 physical bookstores and 648 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 3,300 physical bookstores (including our Retail Segment's 769 physical bookstores) and sources and distributes new and used textbooks to our 648 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 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

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.

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.

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Equity and Earnings Per Share Equity and Earnings Per Share (Policies)	12 Months Ended
	May 01, 2021
Earnings Per Share [Abstract]
Share Repurchase [Policy Text Block]	Repurchase of SharesOn 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.
Dividend [Policy Text Block]	DividendsWe paid no other dividends to common stockholders during Fiscal 2021, Fiscal 2020 and Fiscal 2019. We do not intend to pay dividends on our common stock in the foreseeable future.
Earnings Per Share, Policy [Policy Text Block]	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.

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Fair Values of Financial Instruments Fair Value of Financial Instruments (Policies)

12 Months Ended

May 01, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurement, Policy [Policy Text Block]

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 and Liabilities

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.

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Credit Facility Credit Facility (Policies)	12 Months Ended
	May 01, 2021
Debt Disclosure [Abstract]
Debt, Policy [Policy Text Block]	The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

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Leases (Policies)

12 Months Ended

May 01, 2021

Leases [Abstract]

Lessee, Leases [Policy Text Block]

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted FASB ASC 842, Leases (Topic 842), which required us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all lease arrangements. 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 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.

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Income Taxes Income Taxes (Policies)

12 Months Ended

May 01, 2021

Income Tax Disclosure [Abstract]

Income Tax, Policy [Policy Text Block]

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 14. Income Taxes.

As of May 1, 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.

us-gaap_IncomeTaxPolicyTextBlock

For Fiscal 2021, Fiscal 2020, and Fiscal 2019, we had no material revenue or expense in jurisdictions outside the United States.

Impact of U.S. Tax Reform

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, among other provisions. In accordance with SAB 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118), we completed our accounting for the tax effects of the enactment of the Act within the provisional period as of April 27, 2019. We recorded measurement period adjustments during Fiscal 2019 to reduce our net deferred tax liability by $3,911, which primarily related to the acceleration of certain deductions as permitted by the U.S. tax code. The most significant impact of the legislation for the Company was a $20,425 reduction of the value of our net deferred (which represents future tax liabilities) and long-term tax liabilities as a result of lowering the U.S. corporate income tax rate from 35% to 21%, which was recorded in Fiscal 2018. We also recorded a liability associated with the one-time transition tax, however, such amount is not material.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”) was enacted. We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contribution and net operating loss limitations (“NOLs”), modifications to the deductibility of business interest expense, as well as Alternative Minimum Tax (“AMT”) credit acceleration. The most significant impact of the legislation for the Company was an income tax benefit of $7,164 for the carryback of NOLs to higher tax rate years, recorded in Fiscal 2021. As of May 1, 2021, we recognized a current income tax receivable for NOL carrybacks of $30,492 in prepaid and other current assets on the consolidate balance sheet.

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Commitments and Contingencies Commitments and Contingencies (Policies)

12 Months Ended

May 01, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies, Policy [Policy Text Block]

We generally operate our physical bookstores pursuant to multi-year school management contracts under which a school designates us to operate the official school physical bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these service agreements for our physical bookstores under lease accounting. Prior to the adoption of FASB ASC 842, Leases (Topic 842) ("ASC 842") as discussed below, the excess of such minimum contract expense over actual contract payments (net of school allowances) was reflected in other long-term liabilities and accrued liabilities in the consolidated balance sheets.

Effective the first quarter of Fiscal 2020 (April 28, 2019), we adopted ASC 842, which requires us to recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all fixed lease arrangements (excluding variable obligations) with a term greater than twelve months. For additional information on lease expense and minimum fixed lease obligations, excluding variable commissions, see Part II - Item 8. Financial Statements and Supplementary Data - Note 9. Leases.

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables)

12 Months Ended

May 01, 2021

Summary of Significant Accounting Policies [Abstract]

Accounts Receivable [Table Text Block]

Components of accounts receivables are as follows:

	As of
	May 1, 2021		May 2, 2020
Trade accounts	$	99,583	$	75,702
Advances for book buybacks	2,901		766
Credit/debit card receivables	4,433		2,177
Other receivables	14,155		12,206
Total receivables, net	$	121,072	$	90,851

Property and Equipment [Table Text Block]

Components of property and equipment are as follows:

		As of
	Useful Life	May 1, 2021		May 2, 2020
Property and equipment:
Leasehold improvements	(a)	$	131,784	$	141,602
Machinery, equipment and display fixtures	3 - 5	247,979		246,447
Computer hardware and capitalized software costs	(b)	152,941		145,764
Office furniture and other	2 - 7	62,031		62,209
Content development costs	3 - 5	25,526		16,729
Construction in progress		4,444		3,878
Total property and equipment		624,705		616,629
Less accumulated depreciation and amortization		535,533		518,890
Total property and equipment, net		$	89,172	$	97,739

(a)     Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from 1 - 15 years.

(b)     System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 2 - 5 years.

Schedule of Finite-Lived Intangible Assets

Amortizable intangible assets as of May 1, 2021 and May 2, 2020 are as follows:

		As of May 1, 2021
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	9 - 13	$	263,168	$	(122,565)	$	140,603
Content	1 - 2	19,400		(13,495)		5,905
Technology	1	9,500		(7,500)		2,000
Other (a)	1 - 7	8,930		(6,534)		2,396
		$	300,998	$	(150,094)	$	150,904

		As of May 2, 2020
Amortizable intangible assets	Remaining Life	Gross Carrying Amount		Accumulated Amortization		Total
Customer relationships	10 - 14	$	271,800	$	(113,280)	$	158,520
Content	2 - 3	19,400		(9,615)		9,785
Technology	2	9,500		(5,900)		3,600
Other (a)	1 - 8	8,930		(5,710)		3,220
		$	309,630	$	(134,505)	$	175,125

(a)    Other consists of recognized intangibles for non-compete agreements, trade names, and favorable leasehold interests.

Finite-lived Intangible Assets Amortization Expense [Table Text Block]

All amortizable intangible assets are being amortized over their useful life on a straight-line basis.

Aggregate Amortization Expense:
For the 52 weeks ended May 1, 2021	$	17,943
For the 53 weeks ended May 2, 2020	$	19,310
For the 52 weeks ended April 27, 2019	$	21,314

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Estimated Amortization Expense: (Fiscal Year)
2022	$	16,808
2023	$	13,429
2024	$	11,567
2025	$	11,210
2026	$	11,207
After 2026	$	86,683

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Segment Reporting Segment (Tables)

12 Months Ended

May 01, 2021

Segment Reporting Information [Line Items]

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	As of
	May 1, 2021		May 2, 2020
Total Assets
Retail	$	800,012	$	867,288
Wholesale	199,698		248,464
DSS	33,937		35,689
Corporate Services	4,771		4,991
Total Assets	$	1,038,418	$	1,156,432

As of both May 1, 2021 and May 2, 2020, we had $0, $0 and $4,700 of goodwill on our consolidated balance sheets related to our Retail, Wholesale, and DSS reporting units, respectively.

Reconciliation of Other Significant Reconciling Items from Segments to Consolidated [Table Text Block]

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Capital Expenditures
Retail	$	21,208	$	28,546	$	33,008
Wholesale	5,905		2,126		1,824
DSS (a)	9,662		5,425		11,444
Corporate Services	448		95		144
Total Capital Expenditures	$	37,223	$	36,192	$	46,420

(a) Primarily comprised of content development costs for bartleby.com textbook solutions which was launched in Fiscal 2019.

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

Summarized financial information for our reportable segments is reported below:

	52 weeks ended May 1, 2021 (a)		53 weeks ended May 2, 2020 (a)		52 weeks ended April 27, 2019
Sales:
Retail	$	1,330,470	$	1,712,892	$	1,889,008
Wholesale	165,825		198,353		223,374
DSS	27,374		23,661		21,339
Eliminations	(89,779)		(83,843)		(99,078)
Total Sales	$	1,433,890	$	1,851,063	$	2,034,643
Gross Profit
Retail (b)	$	195,617	$	383,282	$	451,871
Wholesale	34,683		39,805		56,341
DSS	22,318		19,313		20,030
Eliminations	43		149		(516)
Total Gross Profit	$	252,661	$	442,549	$	527,726
Depreciation and Amortization
Retail	$	39,634	$	47,099	$	51,728
Wholesale	5,461		5,963		6,014
DSS	7,763		8,670		7,974
Corporate Services	109		128		149
Total Depreciation and Amortization	$	52,967	$	61,860	$	65,865
Operating Loss
Retail (c)	$	(154,592)	$	(24,445)	$	3,751
Wholesale (c)	14,732		12,909		(2,131)
DSS	(8,132)		(8,529)		(3,345)
Corporate Services	(28,376)		(23,077)		(25,463)
Eliminations	192		359		(466)
Total Operating Loss (c)	$	(176,176)	$	(42,783)	$	(27,654)
The following is a reconciliation of segment Operating Loss to consolidated Income Before Income Taxes
Total Operating Loss	$	(176,176)	$	(42,783)	$	(27,654)
Interest Expense, net	(8,087)		(7,445)		(9,780)
Total Loss Before Income Taxes	$	(184,263)	$	(50,228)	$	(37,434)

(a)In Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic. The impact of which affects the comparability of our results of operations and cash flows.

(b)In Fiscal 2021, gross margin includes a merchandise inventory loss and write-off of $14,960 in the Retail Segment. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies - Merchandise Inventories.

(c)In Fiscal 2021, we recognized an impairment loss (non-cash) of $27,630, $20,506 after-tax, in the Retail segment related to certain of our store-level long-lived assets. In Fiscal 2020, we recorded an impairment loss (non-cash) of $433 in the Retail segment related to net capitalized development costs for a project which were not recoverable. In Fiscal 2019, we recorded an impairment loss (non-cash) of $57,748, comprised of $49,282 of goodwill ($20,538 and $28,744 in our Retail and Wholesale Segments, respectively).and $8,466 of long-lived assets. See Part II - Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies

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Equity and Earnings Per Share (Tables)

12 Months Ended

May 01, 2021

Reconciliation of Basic and Diluted Loss Per Share

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

(shares in thousands)	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Numerator for basic and diluted earnings per share:
Net loss available to common shareholders	$	(131,787)	$	(38,250)	$	(24,374)
Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	49,669		48,013		47,306
Loss per share of Common Stock:
Basic and diluted loss per share of Common Stock	$	(2.65)	$	(0.80)	$	(0.52)

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Leases (Tables)

12 Months Ended

May 01, 2021

Leases [Abstract]

Schedule of Rent Expense [Table Text Block]

The following table summarizes lease expense:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020
Variable lease expense	$	69,511	$	73,455
Operating lease expense	108,282		159,289
Net lease expense	$	177,793	$	232,744

The decrease in lease expense is primarily due to lower sales for contracts based on a percentage of revenue and the impact of the timing and reduction of minimum contractual guarantees.

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

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of May 1, 2021:

	As of
	May 1, 2021
Fiscal 2022	$	99,657
Fiscal 2023	48,621
Fiscal 2024	40,506
Fiscal 2025	34,748
Fiscal 2026	27,045
Thereafter	70,234
Total lease payments	320,811
Less: imputed interest	(43,518)
Operating lease liabilities at period end	$	277,293

Schedule of Operating Lease Disclosures

The following summarizes additional information related to our operating leases:

	As of			As of
	May 1, 2021			May 2, 2020
Weighted average remaining lease term (in years)	5.5 years			5.2 years
Weighted average discount rate	4.9		%	4.6		%
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities	$	111,167		$	140,670
ROU assets obtained in exchange for lease liabilities from initial recognition	$	123,556		$	131,175

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Stock-Based Compensation (Tables)

12 Months Ended

May 01, 2021

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Activity [Table Text Block]

The following table presents a summary of awards activity related to our current Equity Incentive Plan:

	Restricted Stock Awards			Restricted Stock Units			Performance Share Units
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	38,096	$	3.15	2,250,078	$	4.21	1,323,767	$	4.20
Granted	146,343	$	2.40	243,905	$	2.40	—	$	—
Vested	(38,096)	$	—	(1,210,566)	$	4.48	(138,060)	$	7.97
Forfeited (a)	—	$	—	(83,566)	$	4.18	(590,474)	$	5.34
Balance, May 1, 2021	146,343	$	2.40	1,199,851	$	3.56	595,233	$	2.23
	Stock Options			Phantom Shares
	Number of  Shares	Weighted  Average Grant Date Fair Value		Number of  Shares	Weighted  Average Grant Date Fair Value
Balance, May 2, 2020	—	$	—	—	$	—
Granted	2,501,036	$	1.43	2,397,953	$	1.97
Exercised/Vested	—	$	—	—	$	—
Forfeited	(310,046)	$	1.43	(193,090)	$	1.88
Balance, May 1, 2021	2,190,990	$	1.43	2,204,863	$	1.97

(a) The PSUs forfeitures reflect a cumulative adjustment to reflect changes to the expected level of achievement of the respective grants.

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

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

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Stock-based awards
Restricted stock expense	$	226	$	120	$	110
Restricted stock units expense	3,919		6,253		7,846
Performance shares expense (a)	—		12		87
Performance share units expense (a)	283		253		974
Stock option expense	667		—		—
Sub-total stock-based awards:	$	5,095	$	6,638	$	9,017
Cash settled awards
Phantom share units expense	$	3,845	$	—	$	—
Total compensation expense for long-term incentive awards	$	8,940	$	6,638	$	9,017

(a)     Long-term incentive compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants.

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Income Taxes Income Taxes (Tables)

12 Months Ended

May 01, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Income tax benefits for Fiscal 2021, Fiscal 2020 and Fiscal 2019 are as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Current:
Federal	$	(36,187)	$	(5,471)	$	(6,494)
State	(846)		(1,127)		(2,035)
Total Current	(37,033)		(6,598)		(8,529)
Deferred:
Federal	(6,100)		(4,086)		(3,681)
State	(9,343)		(1,294)		(850)
Total Deferred	(15,443)		(5,380)		(4,531)
Total	$	(52,476)	$	(11,978)	$	(13,060)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:

	52 weeks ended May 1, 2021		53 weeks ended May 2, 2020		52 weeks ended April 27, 2019
Federal statutory income tax rate (a)	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	4.4		3.7		6.3
Permanent book / tax differences	(0.9)		(2.9)		(3.9)
CARES Act NOL Carry-back	3.9		—		—
Provisional remeasurement due to Tax Legislation	—		—		10.4
Credits	—		0.5		0.3
Other, net	0.1		1.5		0.8
Effective income tax rate	28.5	%	23.8	%	34.9	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The significant components of our deferred taxes consisted of the following:

	As of
	May 1, 2021		May 2, 2020
Deferred tax assets:
Estimated accrued liabilities	$	11,559	$	11,046
Inventory	8,073		7,167
Stock-based compensation	1,622		1,511
Insurance liability	505		528
Operating lease liabilities	65,456		65,334
Tax credits	433		484
Goodwill	16,759		18,438
Net operating losses	10,810		4,992
Other	10,570		8,853
Gross deferred tax assets	125,787		118,353
Valuation allowance	(1,202)		(1,231)
Net deferred tax assets	124,585		117,122
Deferred tax liabilities:
Intangible asset amortization	(33,547)		(37,864)
Operating lease right-of-use assets	(61,896)		(64,695)
Property and equipment	(5,894)		(6,758)
Gross deferred tax liabilities	(101,337)		(109,317)
Net deferred tax asset	$	23,248	$	7,805

Summary of Income Tax Contingencies [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at April 28, 2018	$	97
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(6)
Balance at April 27, 2019	$	91
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(39)
Balance at May 2, 2020	$	52
Additions for tax positions of the current period	—
Additions for tax positions of prior periods	—
Reductions due to settlements	—
Other reductions for tax positions of prior periods	(52)
Balance at May 1, 2021	$	—

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Commitments and Contingencies Commitments and Contingencies (Tables)

12 Months Ended

May 01, 2021

Commitments and Contingencies Disclosure [Abstract]

Other Commitments

The expense related to our college and university contracts for physical bookstores, including rent expense, and other facility costs in the consolidated statements of operations for periods prior to adoption of ASC 842 in Fiscal 2020 are as follows: 

	52 weeks ended April 27, 2019
Minimum contract expense	$	169,131
Percentage contract expense	73,368
Total expense	$	242,499

Unrecorded Unconditional Purchase Obligations Disclosure [Table Text Block]

Purchase obligations, which includes information technology contracts and inventory purchase commitments, as of May 1, 2021 are as follows: 

Less Than 1 Year	$	14,756
1-3 Years	10,994
3-5 Years	538
Total	$	26,288

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Organization Organization (Details) Person in Millions	12 Months Ended
	May 01, 2021 Store Person segment
Number of Stores | Store	1,417
Number Of Students | Person	6
Number of Reportable Segments | segment	3

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019	Apr. 28, 2019
Payments to Acquire Businesses, Gross			$ 10,000,000
Restricted Cash and Cash Equivalents	$ 8,790,000
Receivables, Net, Current	121,072,000	$ 90,851,000
Advances on Inventory Purchases	2,901,000	766,000
Accounts Receivable, Allowance for Credit Loss	3,594,000	1,986,000
Other Nonrecurring Expense	27,630,000	433,000	57,748,000
Hosting Arrangement, Service Contract, Implementation Cost, Capitalized, after Accumulated Amortization	10,516,000	4,262,000
Hosting Arrangement, Service Contract, Implementation Cost, Expense, Amortization	283,000	96,000	0
Depreciation	35,024,000	42,550,000	44,550,000
Content amortization expenses	5,034,000	4,082,000	1,096,000
Property, Plant and Equipment, Gross	624,705,000	616,629,000
Content development costs	25,526,000	16,729,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	535,533,000	518,890,000
Property, Plant and Equipment, Net	89,172,000	97,739,000
Finite-Lived Intangible Assets, Gross	300,998,000	309,630,000
Finite-Lived Intangible Assets, Accumulated Amortization	(150,094,000)	(134,505,000)
Intangible Assets, Net (Excluding Goodwill)	150,904,000	175,125,000
Amortization of Intangible Assets	17,943,000	19,310,000	21,314,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	16,808,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	13,429,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	11,567,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	11,210,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	11,207,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	86,683,000
Operating Lease, Right-of-Use Asset	240,456,000	250,837,000		$ 277,006,000
Operating Lease, Liability, Noncurrent	277,293,000			$ 294,727,000
Other noncurrent assets	29,105,000	35,307,000
other nonrecurring expense net of tax	20,506,000
Restructuring and other charges	9,960,000	18,567,000	7,233,000
Other Asset Impairment Charges			8,466,000
Goodwill	4,700,000	4,700,000
Goodwill, Impairment Loss			49,282,000
Business Acquisition, Goodwill, Expected Tax Deductible Amount	67,015,000
Marketing and Advertising Expense	12,916,000	10,349,000	10,636,000
Inventory, LIFO Reserve, Effect on Income, Net	25,335,000
Liabilities, Current	372,962,000	406,669,000
Leasehold Improvements [Member]
Property, Plant and Equipment, Gross	131,784,000	141,602,000
Display fixtures and equipment [Member]
Property, Plant and Equipment, Gross	247,979,000	246,447,000
Software and Software Development Costs [Member]
Property, Plant and Equipment, Gross	152,941,000	145,764,000
Furniture and Fixtures [Member]
Property, Plant and Equipment, Gross	62,031,000	62,209,000
Construction in Progress [Member]
Property, Plant and Equipment, Gross	4,444,000	3,878,000
Customer Relationships [Member]
Finite-Lived Intangible Assets, Gross	263,168,000	271,800,000
Finite-Lived Intangible Assets, Accumulated Amortization	(122,565,000)	(113,280,000)
Finite-Lived Intangible Assets, Net	140,603,000	158,520,000
Media Content [Member]
Finite-Lived Intangible Assets, Gross	19,400,000	19,400,000
Finite-Lived Intangible Assets, Accumulated Amortization	(13,495,000)	(9,615,000)
Finite-Lived Intangible Assets, Net	5,905,000	9,785,000
Intellectual Property [Member]
Finite-Lived Intangible Assets, Gross	9,500,000	9,500,000
Finite-Lived Intangible Assets, Accumulated Amortization	(7,500,000)	(5,900,000)
Finite-Lived Intangible Assets, Net	2,000,000	3,600,000
Other Intangible Assets [Member]
Finite-Lived Intangible Assets, Gross	8,930,000	8,930,000
Finite-Lived Intangible Assets, Accumulated Amortization	(6,534,000)	(5,710,000)
Finite-Lived Intangible Assets, Net	2,396,000	$ 3,220,000
Inventories
Proceeds from Sale of Other Assets	41,773,000
Gain (Loss) on Disposition of Other Assets	10,262,000
Inventory Valuation and Obsolescence
Other Nonrecurring Expense	$ 4,698,000
PaperRater [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles			$ 5,300,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			5 years
Goodwill, Acquired During Period			$ 4,700,000
Minimum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life	1 year
Minimum [Member] | Display fixtures and equipment [Member]
Property, Plant and Equipment, Useful Life	3 years
Minimum [Member] | Software and Software Development Costs [Member]
Property, Plant and Equipment, Useful Life	2 years
Minimum [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	2 years
Minimum [Member] | Content Development Costs [Member]
Property, Plant and Equipment, Useful Life	3 years
Minimum [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	9 years	10 years
Minimum [Member] | Media Content [Member]
Finite-Lived Intangible Asset, Useful Life	1 year	2 years
Minimum [Member] | Other Intangible Assets [Member]
Finite-Lived Intangible Asset, Useful Life	1 year	1 year
Maximum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life	15 years
Maximum [Member] | Display fixtures and equipment [Member]
Property, Plant and Equipment, Useful Life	5 years
Maximum [Member] | Software and Software Development Costs [Member]
Property, Plant and Equipment, Useful Life	5 years
Maximum [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	7 years
Maximum [Member] | Content Development Costs [Member]
Property, Plant and Equipment, Useful Life	5 years
Maximum [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	13 years	14 years
Maximum [Member] | Media Content [Member]
Finite-Lived Intangible Asset, Useful Life	2 years	3 years
Maximum [Member] | Intellectual Property [Member]
Finite-Lived Intangible Asset, Useful Life	1 year	2 years
Maximum [Member] | Other Intangible Assets [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	8 years
Other Noncurrent Assets [Member]
Restricted Cash and Cash Equivalents	$ 897,000	$ 766,000
Prepaid Expenses and Other Current Assets
Restricted Cash and Cash Equivalents	7,893,000
Deferred Tax Asset [Domain]
Liabilities, Current	$ 745,000
Retail Segment [Member]
Largest Suppliers Percentage	35.00%
Goodwill, Impairment Loss			20,538,000
Wholesale [Member]
Largest Suppliers Percentage	32.00%
Goodwill, Impairment Loss			28,744,000
DSS [Member]
Goodwill	$ 4,700,000	4,700,000
Wholesale [Member]
Goodwill	0	0
Finite-Lived Intangible Assets [Member]
Other Asset Impairment Charges			8,138,000
Property, Plant and Equipment [Member]
Other Asset Impairment Charges			$ 328,000
Trade Accounts Receivable [Member]
Receivables, Net, Current	99,583,000	75,702,000
Credit Card Receivable [Member]
Receivables, Net, Current	4,433,000	2,177,000
Accounts Receivable [Member]
Receivables, Net, Current	$ 14,155,000	12,206,000
Impaired Long-Lived Assets Held and Used, Asset Name [Domain]
Restructuring and other charges		$ 587,000

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Revenue Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Revenues	$ 1,433,890	$ 1,851,063	$ 2,034,643
Rental income	134,150	179,863	195,883
Contract with Customer, Asset, after Allowance for Credit Loss	0
Deferred Revenue	18,139	13,373	20,418
Deferred Revenue, Additions	171,834	193,235
Contract with Customer, Liability, Revenue Recognized	(167,068)	(200,280)
Intersegment Eliminations [Member]
Revenues	(89,779)	(83,843)	(99,078)
Accrued Liabilities
Deferred Revenue	13,469	13,373
Other Noncurrent Liabilities
Deferred Revenue	4,670
Retail Segment [Member]
Revenues	1,330,470	1,712,892	1,889,008
Wholesale [Member]
Revenues	165,825	198,353	223,374
DSS [Member]
Revenues	27,374	23,661	21,339
Transferred at Point in Time [Member] | Retail Segment [Member]
Revenues	1,157,115	1,493,044	1,645,357
Transferred over Time [Member] | Retail Segment [Member]
Revenues	39,205	39,985	47,768
Rental income	$ 134,150	$ 179,863	$ 195,883

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Segment Reporting Segment Reporting (Details) $ in Thousands	12 Months Ended
	May 01, 2021 USD ($) Store segment	May 02, 2020 USD ($)	Apr. 27, 2019 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments | segment	3
Number of Stores | Store	1,417
Assets	$ 1,038,418	$ 1,156,432
Goodwill	4,700	4,700
Payments to Acquire Property, Plant, and Equipment	37,223	36,192	$ 46,420
Revenues	1,433,890	1,851,063	2,034,643
Gross Profit	252,661	442,549	527,726
Depreciation and amortization expense	52,967	61,860	65,865
Operating Income (Loss)	(176,176)	(42,783)	(27,654)
Interest Income (Expense), Net	(8,087)	(7,445)	(9,780)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	(184,263)	(50,228)	(37,434)
COGS Inventory Loss and Markdown	14,960	0	0
Other Nonrecurring Expense	27,630	433	57,748
other nonrecurring expense net of tax	20,506
Goodwill, Impairment Loss			49,282
Other Asset Impairment Charges			8,466
Retail Segment [Member]
Segment Reporting Information [Line Items]
Goodwill	0	0
Wholesale [Member]
Segment Reporting Information [Line Items]
Goodwill	0	0
DSS [Member]
Segment Reporting Information [Line Items]
Goodwill	4,700	4,700
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Assets	4,771	4,991
Payments to Acquire Property, Plant, and Equipment	(448)	(95)	(144)
Depreciation and amortization expense	109	128	149
Operating Income (Loss)	(28,376)	(23,077)	(25,463)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(89,779)	(83,843)	(99,078)
Gross Profit	43	149	(516)
Operating Income (Loss)	192	359	(466)
Retail Segment [Member]
Segment Reporting Information [Line Items]
Assets	800,012	867,288
Payments to Acquire Property, Plant, and Equipment	(21,208)	(28,546)	(33,008)
Revenues	1,330,470	1,712,892	1,889,008
Gross Profit	195,617	383,282	451,871
Depreciation and amortization expense	39,634	47,099	51,728
Operating Income (Loss)	$ (154,592)	(24,445)	3,751
Goodwill, Impairment Loss			20,538
Wholesale [Member]
Segment Reporting Information [Line Items]
Number of Wholesale Customers | Store	3,300
Number of System Customers | Store	400
Assets	$ 199,698	248,464
Payments to Acquire Property, Plant, and Equipment	(5,905)	(2,126)	(1,824)
Revenues	165,825	198,353	223,374
Gross Profit	34,683	39,805	56,341
Depreciation and amortization expense	5,461	5,963	6,014
Operating Income (Loss)	14,732	12,909	(2,131)
Goodwill, Impairment Loss			28,744
DSS [Member]
Segment Reporting Information [Line Items]
Assets	33,937	35,689
Payments to Acquire Property, Plant, and Equipment	(9,662)	(5,425)	(11,444)
Revenues	27,374	23,661	21,339
Gross Profit	22,318	19,313	20,030
Depreciation and amortization expense	7,763	8,670	7,974
Operating Income (Loss)	$ (8,132)	$ (8,529)	$ (3,345)
Physical Stores [Member]
Segment Reporting Information [Line Items]
Number of Stores | Store	769
Virtual Stores [Member]
Segment Reporting Information [Line Items]
Number of Stores | Store	648

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Equity and Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019	Dec. 14, 2015
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares, Outstanding	51,378,913	48,298,000
Preferred Stock, Shares Outstanding	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,409,345
Stock Repurchase Program, Authorized Amount				$ 50,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 26,669
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	414,174	374,733	351,043
Stock Issued During Period, Shares, Treasury Stock Reissued	2,307,692
Proceeds from Issuance of Common Stock	$ 15,000
Sale of Stock, Price Per Share	$ 6.50
Contract with Customer, Liability	$ 4,131
Contract with Customer, Liability, Current	175
Contract with Customer, Liability, Noncurrent	$ 3,956
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,387,185	3,795,603	2,939,089
Weighted Average Number of Shares Outstanding, Basic and Diluted	49,669,000	48,013,000
Net Income (Loss) Available to Common Stockholders, Basic	$ (131,787)	$ (38,250)	$ (24,374)
Earnings Per Share, Basic and Diluted	$ (2.65)	$ (0.80)	$ (0.52)

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Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Other Nonrecurring Expense	$ 27,630	$ 433	$ 57,748
other nonrecurring expense net of tax	20,506
Goodwill, Impairment Loss			49,282
Other Asset Impairment Charges			8,466
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	43,194	433
Receivables, Fair Value Disclosure	0	0
Property, Plant, and Equipment, Fair Value Disclosure	420	0
OperatingLeaseRightOfUseAssetfairvalue	13,099	0
Finite-lived Intangible Assets, Fair Value Disclosure	1,445	0
Other Assets, Fair Value Disclosure	600	0
Accrued Liabilities, Fair Value Disclosure	0	0
Fair Value, Net Asset (Liability)	15,564	0
Phantom Share Units (PSUs)
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent	3,845
Accounts Receivable [Member]
Other Nonrecurring Expense	0	245
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	0	245
Property, Plant and Equipment [Member]
Other Nonrecurring Expense	5,085	300	328
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	5,505	300
Property Subject to Operating Lease
Other Nonrecurring Expense	13,328	0
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	26,427	0
Other Intangible Assets [Member]
Other Nonrecurring Expense	6,278	0	8,138
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	7,723	0
Other Noncurrent Assets [Member]
Other Nonrecurring Expense	2,939	0
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	3,539	0
Accrued Liabilities
Other Nonrecurring Expense	0	112
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset	0	$ 112
Other Intangible Assets [Member]
Other Asset Impairment Charges			8,138
Property, Plant and Equipment [Member]
Other Asset Impairment Charges			$ 328
Accrued Liabilities | Phantom Share Units (PSUs)
Other Deferred Compensation Arrangements, Liability, Current	2,509
Other Noncurrent Liabilities | Phantom Share Units (PSUs)
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent	$ 1,336

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Credit Facility (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Line of Credit Facility [Line Items]
Line of Credit Facility, Covenant Compliance	On March 31, 2021, we were granted a waiver to the condition to the current draw under the FILO Facility.
Proceeds from borrowings on Credit Facility	$ 722,600	$ 600,900	$ 521,200
Repayments of borrowings on Credit Facility	719,700	559,700	584,100
Long-term Line of Credit, Noncurrent	127,600	99,700	33,500
Short-term Debt	50,000	75,000	$ 100,000
Letters of Credit Outstanding, Amount	4,759	$ 4,759
Debt Issuance Costs, Gross	$ 1,076
Debt Instrument, Covenant Description	The Credit Facility contains customary negative covenants, which limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements and a minimum excess availability of the greater of 10% of the Loan Cap and $25,000 when the FILO is funded) would be triggered, and the lenders would have the right to assume dominion and control over the Company's cash. The Credit Facility includes an anti-cash hoarding provision, which limits maximum excess cash allowed to $50,000 when the FILO is funded.The Credit Facility contains customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit Facility also contains customary affirmative covenants and representations and warranties. We are in compliance with all covenants, representations and warranties under the Credit Facility as of May 1, 2021.
New Credit Facility
Line of Credit Facility [Line Items]
Credit facility maturity term, in years	5 years
Credit facility, borrowing capacity	$ 400,000
Line Of Credit Potential Increase Amount	$ 100,000
Line of Credit Facility, Interest Rate Description	Interest under the Credit Facility accrues, at our election, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the Credit Facility. Loans will initially bear interest at LIBOR plus 2.00% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 1.00% per annum, in the alternative, and thereafter the interest rate will fluctuate between LIBOR plus 2.00% per annum and LIBOR plus 1.50% per annum (or between the alternate base rate plus 1.00% per annum and the alternate base rate plus 0.50% per annum), based upon the excess availability under the Credit Facility at such time.
New Credit Facility [Member] [Member]
Line of Credit Facility [Line Items]
Credit facility, borrowing capacity	$ 100,000
Line of Credit Facility, Interest Rate Description	Loans under the FILO Facility will bear interest at a rate equal to the LIBOR rate, plus 3.750%. In connection with the waiver, the applicable margin for credit extensions made under the FILO Facility after March 31, 2021 through the end of 2021 was increased by 0.50% (to 3.75% per annum for LIBO rate loans and 2.75% for base rate loans). The FILO Facility will be available solely during the draw period each year, from April 1 through July 31. We are required to borrow 100% of the aggregate commitments under the FILO Facility on April 1 of each year, and the loans must be repaid in full (including interest and fees) on July 31 of each year. The commitments under the FILO Facility will decrease from $50,000 to $25,000 on August 1, 2021. We will pay a commitment fee of 0.375% on the daily unused portion of the FILO Facility.
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, borrowing capacity	$ 500,000

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Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 28, 2019
Leases [Abstract]
Variable Lease, Cost	$ 69,511	$ 73,455
Lease, Cost	108,282	159,289
Operating Lease, Expense	177,793	$ 232,744
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	99,657
Lessee, Operating Lease, Liability, Payments, Due Year Two	48,621
Lessee, Operating Lease, Liability, Payments, Due Year Three	40,506
Lessee, Operating Lease, Liability, Payments, Due Year Four	34,748
Lessee, Operating Lease, Liability, Payments, Due Year Five	27,045
Lessee, Operating Lease, Liability, Payments, Due after Year Five	70,234
Lessee, Operating Lease, Liability, Payments, Due	320,811
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(43,518)
Operating Lease, Liability	$ 277,293		$ 294,727
Operating Lease, Weighted Average Remaining Lease Term	5 years 6 months	5 years 2 months 12 days
Operating Lease, Weighted Average Discount Rate, Percent	4.90%	4.60%
Operating Lease, Payments	$ 111,167	$ 140,670
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 123,556	$ 131,175

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Supplementary Information Supplementary Info - Impairment and Restructuring (Details) - USD ($)	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Other Nonrecurring Expense	$ 27,630,000	$ 433,000	$ 57,748,000
other nonrecurring expense net of tax	20,506,000
Other Asset Impairment Charges			8,466,000
Goodwill, Impairment Loss			49,282,000
Restructuring and other charges	9,960,000	18,567,000	7,233,000
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss)	1,595,000	2,695,000	2,274,000
Write off of Deferred Debt Issuance Cost			118,000
Retail Segment [Member]
Goodwill, Impairment Loss			20,538,000
Wholesale [Member]
Goodwill, Impairment Loss			28,744,000
Employee Severance [Member]
Restructuring and other charges	5,888,000	12,667,000	4,554,000
Accrued Liabilities	3,246,000	10,370,000
Other Expense [Member]
Other Nonrecurring Expense	5,213,000	2,841,000
Facility Closing [Member]
Restructuring and other charges	$ 454,000	223,000	281,000
Impaired Long-Lived Assets Held and Used, Asset Name [Domain]
Restructuring and other charges		$ 587,000
Other Restructuring [Member]
Restructuring and other charges			$ 2,679,000

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Related Party Transactions Related Party (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
MBS [Domain]
Related Party Transaction [Line Items]
Payments for Rent	$ 1,380	$ 1,380	$ 1,380

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Employees' Defined Contribution Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Company contributions, employee benefit expenses	$ 0	$ 5,015	$ 6,702

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Stock-Based Compensation (Details) - USD ($)	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019	Oct. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,409,345
Share Price				$ 2.30
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 42,125,000
Stock-based compensation expense	5,095,000	$ 6,638,000	$ 9,017,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 11,099,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 3 months 10 days
Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 5,095,000	6,638,000	9,017,000
Long Term Incentive Plan Compensation	$ 8,940,000	$ 6,638,000	9,017,000
Restricted Stock [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 2.40	$ 3.15
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	146,343
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	146,343	38,096
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(38,096)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.40
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 0
Restricted Stock [Member] | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 226,000	$ 120,000	110,000
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 3.56	$ 4.21
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	243,905
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	1,199,851	2,250,078
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(1,210,566)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(83,566)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.40
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	4.48
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 4.18
Restricted Stock Units (RSUs) [Member] | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 3,919,000	$ 6,253,000	7,846,000
Performance Shares [Member] | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 0	$ 12,000	87,000
Performance Share Units [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 2.23	$ 4.20
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	595,233	1,323,767
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(138,060)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(590,474)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	7.97
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 5.34
Performance Share Units (PSUs) [Member] | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 283,000	$ 253,000	974,000
Equity Option
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	2,501,036
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	2,190,990	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	(310,046)
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price	$ 1.43	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	1.43
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Weighted Average Grant Date Fair Value	$ 1.43
Equity Option | OptionsAtMarket
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,250,518
Option Indexed to Issuer's Equity, Strike Price	$ 2.46
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	Black-Scholes
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.27%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	6 years 2 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	73.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 1.58
Equity Option | OptionsAtPremium
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,250,518
Option Indexed to Issuer's Equity, Strike Price	$ 5.00
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	Monte Carlo
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.68%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	73.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 1.28
Equity Option | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 667,000	$ 0	0
Phantom Share Units (PSUs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 1.97	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	2,397,953
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent	$ 3,845,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	2,204,863	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(193,090)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.97
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 1.88
Phantom Share Units (PSUs) | Phantom Share Grant 1
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	Black-Scholes
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 1.88
Share Price	$ 2.46
ExercisePriceMaximum	$ 7.38
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateRange [Line Items]	0.12% - 0.15%
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsVolatility [Line Items]	86% - 114%
Phantom Share Units (PSUs) | Phantom Share Grant 2
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	Black-Scholes
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 5.79
Share Price	$ 7.63
ExercisePriceMaximum	$ 22.89
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRateRange [Line Items]	0.07% - 0.31%
ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsVolatility [Line Items]	90% - 110
Phantom Share Units (PSUs) | Accrued Liabilities
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Other Deferred Compensation Arrangements, Liability, Current	$ 2,509,000
Phantom Share Units (PSUs) | Other Noncurrent Liabilities
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent	1,336,000
Phantom Share Units (PSUs) | Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 3,845,000	$ 0	$ 0

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Income Taxes Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Apr. 27, 2019	May 01, 2021	May 02, 2020	Apr. 27, 2019	Apr. 28, 2018
Current Federal Tax Expense (Benefit)		$ (36,187)	$ (5,471)	$ (6,494)
Current State and Local Tax Expense (Benefit)		(846)	(1,127)	(2,035)
Current Income Tax Expense (Benefit)		(37,033)	(6,598)	(8,529)
Deferred Federal Income Tax Expense (Benefit)		(6,100)	(4,086)	(3,681)
Deferred State and Local Income Tax Expense (Benefit)		(9,343)	(1,294)	(850)
Deferred Income Tax Expense (Benefit)		(15,443)	(5,380)	(4,531)
Income Tax Expense (Benefit)		$ (52,476)	$ (11,978)	$ (13,060)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%	21.00%	35.00%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount				$ 3,911
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability				$ 20,425
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent		4.40%	3.70%	6.30%
Effective Income Tax Rate Reconciliation, Tax Contingency, Other, Percent		(0.90%)	(2.90%)	(3.90%)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent		3.90%	0.00%	0.00%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent		0.00%	0.00%	10.40%
Effective Income Tax Rate Reconciliation, Tax Credit, Percent		0.00%	0.50%	0.30%
Effective Income Tax Rate Reconciliation,Other Reconciling Items, Percent		0.10%	1.50%	0.80%
Effective Income Tax Rate Reconciliation, Percent		28.50%	23.80%	34.90%
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals		$ 11,559	$ 11,046
Deferred Tax Assets, Inventory		8,073	7,167
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost		1,622	1,511
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Self Insurance		505	528
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Deferred Rent		65,456	65,334
Deferred Tax Assets, Tax Credit Carryforwards, Other		433	484
Deferred Tax Assets, Goodwill and Intangible Assets		16,759	18,438
Deferred Tax Assets, Operating Loss Carryforwards		10,810	4,992
Deferred Tax Assets, Other		10,570	8,853
Deferred Tax Assets, Gross		125,787	118,353
Deferred Tax Assets, Valuation Allowance		(1,202)	(1,231)
Deferred Tax Assets, Net of Valuation Allowance		124,585	117,122
Deferred Tax Liabilities, Goodwill and Intangible Assets		(33,547)	(37,864)
Deferred Tax Liabilities, Leasing Arrangements		(61,896)	(64,695)
Deferred Tax Liabilities, Property, Plant and Equipment		(5,894)	(6,758)
Deferred Tax Liabilities, Gross		(101,337)	(109,317)
Deferred Tax Assets, Net		23,248	7,805
Unrecognized Tax Benefits	$ 91	0	52	$ 91	$ 97
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions		0	0	0
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions		0	0	0
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities		0	0	0
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions		(52)	(39)	$ (6)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued		0	$ 3
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense		3
Deferred Tax Liabilities, Undistributed Foreign Earnings		200
Deferred Foreign Income Tax Expense (Benefit)		100
Tax Cuts and Jobs Act, Measurement Period Adjustment, Income Tax Expense (Benefit)		7,164
Income Taxes Receivable		30,492
One percentage point [Domain]
Current State and Local Tax Expense (Benefit)		1,843
Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards		196,180
State and Local Jurisdiction [Member]
Operating Loss Carryforwards		$ 548

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Commitments and Contingencies Commitments and Contingencies (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2019	May 01, 2021
Loss Contingencies [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 169,131
Operating Leases, Rent Expense, Contingent Rentals	73,368
Operating Leases, Rent Expense, Net	$ 242,499
Purchase Obligation, Due in Next Twelve Months		$ 14,756
Purchase Obligation, Due in Second and Third Year		10,994
Purchase Obligation, Due in Fourth and Fifth Year		538
Purchase Obligation		$ 26,288

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Schedule II Valuation and Qualifying Accounts Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	May 01, 2021	May 02, 2020	Apr. 27, 2019	Apr. 28, 2018
SEC Schedule, 12-09, Allowance, Credit Loss [Member]
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Cost and Expense	$ 4,600	$ 1,710	$ 2,670
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction	(2,992)	(1,859)	(2,618)
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount	3,594	1,986	2,135	$ 2,083
Sales Returns and Allowances [Member]
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Other Account	145,595	186,305	197,799
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction	(147,327)	(186,524)	(197,746)
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount	$ 3,331	$ 5,063	$ 5,282	$ 5,229

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Label	Element	Value
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 16,869,000