Please ensure Javascript is enabled for purposes of website accessibility

Why Barnes & Noble Education Stock Tanked 20% at the Open Today

By Reuben Gregg Brewer - Jun 30, 2021 at 12:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors did not like the quarterly update from this education-focused book retailer. Here's a quick look at why.

What happened

Shares of Barnes & Noble Education (BNED -4.44%) 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.

Two students in a bookstore.

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.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Barnes & Noble Education, Inc. Stock Quote
Barnes & Noble Education, Inc.
$2.58 (-4.44%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.