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Why Barnes & Noble Education Stock Tanked 20% at the Open Today | The Motley Fool

What happened

Shares of Barnes & Noble Education (NYSE:BNED) fell as much as 20% in early trading on June 30. At around noon EDT, shares were down about 18%, unable to work back much from the initial price drop. The retailer, which operates bookstores on behalf of schools, reported fiscal fourth-quarter 2021 earnings after the close of trading on June 29 and investors clearly didn’t like what they saw.

So what

Barnes & Noble Education didn’t waste any time in its fiscal fourth-quarter earnings release, stating right up front that “fiscal 2021 results were significantly impacted by the COVID-19 pandemic.” It noted that the schools it serves adjusted their teaching methods, notably by going remote, and sports activities were curtailed. Flowing from that, the company’s fiscal fourth-quarter sales were off by 13.3% year over year with fiscal full-year sales down 22.5%. Although the fiscal fourth quarter was much better than the full-year result, it’s pretty clear that the coronavirus continues to heavily impact the company’s performance.

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Image source: Getty Image.

On the bottom line, Barnes & Noble Education lost $0.86 per share in its fiscal fourth quarter, a touch worse than the $0.84-per-share loss in the same quarter of fiscal 2020. For all of fiscal 2021, the retailer lost $2.65 per share versus a loss of $0.80 per share in fiscal 2020. It’s easy to see why investors would be downbeat here, but what likely caused the most consternation was the fact that management doesn’t expect to see its results return to pre-pandemic levels until at least fiscal 2023. 

Now what

Today’s drop is hardly shocking given the weak results and dour outlook. Yes, things are getting better, but it looks like there’s still a long and difficult road ahead before this bookseller’s business is back to normal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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