Barnes & Noble Education, Inc.

Unless the context otherwise indicates, references in these Notes to the accompanying condensed consolidated financial statements to the "Company” or "BNED" refer to Barnes & Noble Education, Inc., a Delaware corporation. References to “Barnes & Noble College” or "BNC" refer to the Company's college bookstore business operated through its subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to the Company's virtual bookstore and wholesale textbook distribution business operated through its subsidiary MBS Textbook Exchange, LLC.

This Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended May 2, 2026.

Note 1. Organization

Description of Business

Barnes & Noble Education, Inc. ("BNED" or the "Company") 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. The Company is also a textbook wholesaler, and bookstore management hardware and software provider. The Company operates 1,062 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment.

The Company provides product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. The Company offers its BNC First Day®affordable access course material programs, consisting of First Day® Completeand First Day®, which provide faculty-required course materials to students on or before the first day of class.

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

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

The Barnes & Noble brand (licensed from the Company's former parent) along with the Company's subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing in the United States. The Company's large college footprint, reputation, and credibility in the marketplace not only support the Company's marketing efforts to universities, students, and faculty, but are also important to the Company's relationship with leading educational publishers who rely on the Company as one of their primary distribution channels.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The results of operations reflected in the Company's condensed consolidated financial statements are presented on a consolidated basis. The accompanying condensed consolidated financial statements reflect the Company's condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended ("Exchange Act"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to Securities and Exchange Commission ("SEC") rules. The Company had no other comprehensive income (loss) for the periods presented; accordingly, comprehensive income (loss) is equal to Net income (loss) on the Company's condensed consolidated statements of operations. In the opinion of the Company’s management, the accompanying unaudited condensed 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. All material intercompany accounts and transactions have been eliminated in consolidation.

Certain prior-period amounts have been reclassified to conform to the current-period presentation. The reclassifications did not affect the Company's previously reported results of operations, financial position, cash flows, or earnings per share.

The Company's fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended August 1, 2026 are not necessarily indicative of the results expected for the 52 weeks ending May 1, 2027.

Seasonality

The Company's business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters. The Company's quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in its fiscal calendar dates.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the digital content is made available to the customer compared to: (i) the rental of physical textbooks where revenue is recognized over the rental period, and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of the Company's products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of the Company's products by its customers for products ordered through the Company's websites and virtual bookstores. See Revenue Recognition and Deferred Revenue discussion below.

These shifts in timing may affect the comparability of the Company's results across periods. Sales attributable to the Company's wholesale business are generally highest in the Company's first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.

Use of Estimates

In preparing consolidated financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents and Restricted Cash

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

As of August 1, 2026 and May 2, 2026, the Company had cash and cash equivalents of $7,806 and $8,418, respectively. As of August 1, 2026 and May 2, 2026, the Company had restricted cash of $13,740 and $19,801, respectively, comprised of $11,444 and $17,422, respectively, in the prepaid expenses and other current assets in the condensed Consolidated Balance Sheets related to segregated funds for commission due to Fanatics Lids College, Inc. D/B/A “Lids” for logo merchandise sales as per the Lids service provider merchandising agreement, and $2,296 and $2,379, respectively, in other noncurrent assets in the condensed Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of the Company's 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 represent write-downs that reduce the cost basis of the asset. These write-downs are based on the Company's history of liquidating non-returnable inventory, which includes certain assumptions, including markdowns and inventory aging.

Cost is determined primarily by the retail inventory method for the Company's retail business. Textbook and trade book inventories for retail and wholesale are valued using the LIFO method. For the quarter ended August 1, 2026, there was no required LIFO adjustment. The Company's LIFO inventory reserve was $6,446 for both August 1, 2026 and May 2, 2026.

For our physical bookstores, the Company estimates and accrues inventory shortage for the period between the last physical count 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 physical bookstores fulfillment order is directed first to the Company's wholesale operations before other sources of inventory are utilized. The products that the Company sells originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.

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 with the amortization expense recognized 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.

Leases

The Company recognizes lease assets and lease liabilities on the condensed Consolidated Balance Sheets for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification (“ASC”) Topic 842, Leases. The Company does not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). The Company recognizes lease expense for contracts with fixed lease payments on a straight-line basis over the contractual term. The Company recognizes variable lease payments as incurred. The Company recognizes lease expense related to its college and university contracts as cost of sales in the Company's Consolidated Statements of Operations and recognizes lease expense related to its various office spaces as selling and administrative expenses in the Company's Consolidated Statements of Operations. For additional information, see Note 10. Leases.

Revenue Recognition and Deferred Revenue

Product sales and rentals

The majority of the Company's revenue is derived from the sale of products through its bookstore locations, including virtual bookstores, and its bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of the Company's products is recognized at the point in time when control of the products is transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.

Product revenue is recognized when the customer takes physical possession of the Company's products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of the Company's products by its customers for products ordered through the Company's 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 sale of digital textbooks, which contains a single performance obligation, is recognized upon delivery of the digital content as product revenue in the Company's consolidated financial statements. A software feature is embedded within the content of the Company's digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, the Company's performance obligation is complete.

Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in the Company's consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. The Company offers 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. The Company records 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, the Company accelerates any remaining deferred rental revenue at the point of sale. Such buyouts have historically been, and continue to be, immaterial to the financial statements.

Revenue recognized for the Company's BNC First Day® offerings is consistent with its policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day® programs, the timing of cash collection from the Company's school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts the Company's BNC First Day® affordable access course material program offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in the Company's third quarter given the timing of the Spring Term and its quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

The Company estimates 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, the Company evaluates whether it is acting as a principal or an agent. The Company's determination is based on the evaluation of whether the Company controls the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether the Company controls the specified goods or services prior to transferring them to the customer including whether it has 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 the Company is the principal, the Company recognizes revenue on a gross basis; for transactions in which the Company is an agent to a third-party, the Company recognizes revenue on a net basis.

The Company's logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics, and the Company recognizes commission revenue earned for these sales on a net basis in its consolidated financial statements.

The Company does not have a customer loyalty program. In Fiscal 2027, the Company launched its own gift card program. Proceeds from the sale of Company-issued gift cards are recorded as a contract liability and recognized as revenue upon redemption by the customer or when breakage is recognized in accordance with the Company's accounting policy. The Company also accepts Barnes & Noble Booksellers ("B&N") gift cards and sells third-party gift cards, including B&N gift cards, in its stores. The Company does not treat any promotional offers as expenses. Sales tax collected from its customers is excluded from reported revenues. The Company's 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 brand marketing services which includes promotional activities and advertisements within the Company's physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.

Brand marketing agreements often include multiple performance obligations which are individually negotiated with the Company's customers. For these arrangements that contain distinct performance obligations, the Company allocates 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 brand marketing service and over time 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

The Company's cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to the Company's college and university contracts and other facility related expenses.

Selling and Administrative Expenses

The Company’s selling and administrative expenses consist primarily of store and overhead payroll, including long-term incentive plan compensation. Selling and administrative expenses also include direct expenses to support the stores, merchandising, procurement, and field support, consisting of information technology, professional services and travel.

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. The Company regularly reviews deferred tax assets for recoverability and establishes a valuation allowance, if determined to be necessary. For additional information, see Note 14. Income Taxes.

Accounting Pronouncements

Recently issued accounting pronouncements

There were no new accounting pronouncements issued during the quarter ended August 1, 2026 that are expected to have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Adopted

In September 2025, Financial Accounting Standards Board (the "FASB") issued ASU No. 2025-07 (“ASU 2025-07”), "Derivatives and Hedging (Topic 815): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract."The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 related to share-based payments from a customer in a revenue contract.

The amendments in ASU 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt ASU 2025-07 effective May 4, 2025, the first day of fiscal 2026. The adoption impacted the Company’s accounting for its Participating Interest Purchase Agreement. See Note 8. Participation Interest Purchase Agreementfor further discussion.

Note 3. Revenue

Revenue from sales of the Company's products and services is recognized either at the point in time when control of the products is transferred to its customers or over time as services are provided in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products or services.

See Note 2. Basis of Presentation and Summary of Significant Accounting Policies for additional information related to the Company's revenue recognition policies.

Disaggregation of Revenue

The following table disaggregates the revenue associated with the Company's major product and service offerings:

(a)Logo general merchandise sales are recognized on a net basis as commission revenue in the condensed consolidated financial statements.

(b)Service and other revenue primarily relates to brand partnership marketing and other service revenues.

Contract Assets and Contract Liabilities

Contract assets represent the sale of goods or services to a customer before the Company has 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 $0.4 million and $1.2 million for August 1, 2026 and May 2, 2026, respectively, on the Company's condensed Consolidated Balance Sheets.

Contract liabilities represent an obligation to transfer goods or services to a customer for which the Company has received consideration and consists of its deferred revenue liability (deferred revenue). Deferred revenue consists of the following:

•advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;

•unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to the Company's 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 Lids.

The following table presents changes in deferred revenue associated with the Company's contract liabilities:

Note 4. Segment Reporting

BNED identifies its segments in accordance with the way its business is managed. The Company's operating and reporting segment reflects a centralized management structure supporting company-wide procurement, marketing and selling, delivery, and customer service.

The Company's Chief Executive Officer serves as the Chief Operating Decision Maker ("CODM") and reviews financial information on a consolidated basis to evaluate operational performance, allocate resources, and assess trends over time. The CODM uses Net income (loss) as the primary measure of segment profit or loss. In evaluating performance, the CODM also reviews significant expense categories, including adjusted cost of sales, payroll expense, contract payments, direct and indirect expenses, which are considered material to understanding the segment’s financial results.

This measure provides a consistent basis for strategic decision-making, budgeting, and performance evaluation, reflecting the segment’s contribution to the Company’s overall financial results. Segment assets are not used by the CODM for evaluating performance as presented on the Company's Consolidated Balance Sheet.

The following table presents sales, profitability, and significant expense information about the Company's segment.

(a) Adjusted Cost of sales includes all cost of sales presented in the Statement of Operations, adjusted for contract payments and other various expenses.

(b) Other segment expenses, net, represents GAAP income statement line items that are not considered to be significant segment expenses. These items primarily include stock-based compensation, depreciation and amortization, other (income) expense, interest income and expense, and income tax expense (benefit).

Note 5. Equity

Dividends on registered shares

On June 24, 2026, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $0.08 per share of common stock outstanding, which was paid on July 30, 2026 to the holders of record as of July 16, 2026. The payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend on our results of operations, financial condition, cash requirements, and other factors.

Upon approval of a dividend, the obligation is reflected in other current liabilities with a corresponding reduction in additional paid-in capital in the consolidated balance sheet to the extent retained earnings is insufficient to absorb the distribution. Because our retained earnings reflected an accumulated deficit as of May 2, 2026, the $2.8 million dividend paid on July 30, 2026 was recorded as a reduction of additional paid-in capital rather than accumulated deficit.

Stock Authorization

As of August 1, 2026, the Company's 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. The Company's common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BNED.”

Repurchase of Shares

On December 14, 2015, the Board of Directors authorized a stock repurchase program of up to $50,000 in the aggregate, of the Company's 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 13 weeks ended August 1, 2026, the Company did not purchase shares under the stock repurchase program. As of August 1, 2026, approximately $26,669 remains available under the stock repurchase program.

Note 6. Income (Loss) Per Share

Basic earnings per share ("EPS") is computed based upon the weighted average number of shares of Common Stock outstanding for the period. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of Common Stock equivalents using the treasury stock method and the average market price of the Company's Common Stock for the period. The Company includes 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. The Company's 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 net income (loss) per share is an allocation method that calculates net income (loss) 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.

The following is a reconciliation of the basic and diluted income (loss) per share calculation:

(a) During the 13 weeks ended August 1, 2026 and August 2, 2025, weighted-average shares of 1,190,128 and 623,003, respectively related to outstanding performance-based restricted stock units were excluded from the diluted net income (loss) per share calculation, as the market conditions underlying these awards had not been satisfied as of the reporting date.

Note 7. Fair Value Measurements

In accordance with ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), 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 the Company to develop its own assumptions

The Company's financial instruments include cash and cash equivalents, receivables, accrued liabilities, accounts payable, and long-term debt. The fair values of cash and cash equivalents, receivables, accrued liabilities, and accounts payable approximate their carrying values because of the short-term nature of these instruments, which are all considered Level 1 within the fair value hierarchy. The fair value of the Company's long-term debt approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments.

Non-Financial Assets

The Company measures certain non-financial assets and liabilities at fair value on a nonrecurring basis in accordance with ASC 820. These assets are subject to fair value remeasurement only when specific triggering events occur, such as indicators of impairment or classification as held for sale. The Company's non-financial assets include 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. The Company reviews its 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.

Note 8. Participation Interest Purchase Agreement

During fiscal year 2026, the Company was party to a Participation Interest Purchase Agreement with Jefferies Leveraged Credit Products LLC (“Jefferies”), under which Jefferies had paid the Company $12,625 in exchange for a participation interest in proceeds from a specified litigation claim related to the Visa and Mastercard Interchange Litigation (the "Interchange Litigation"). The arrangement was non-recourse to the Company, and Jefferies' entitlement to payment was limited to litigation proceeds, if any.

In February 2026, the Interchange Litigation was resolved through settlement, and all proceeds attributable to the Company's claims were distributed directly to Jefferies and its assignees. The Company received no cash proceeds. The related deferred income balance of $12,625 was recognized in earnings during the fourth quarter of fiscal year 2026 within Other income (expense), net, and the Company's obligations under the Agreement were fully discharged. No balance remains as of August 1, 2026, and there was no activity related to this arrangement during the current period.

Note 9. Debt

Credit Facility

In connection with the delayed filing of our 2025 Annual Report and our Quarterly Reports on Form 10-Q for the first and second quarters of Fiscal 2026, the Company entered into a series of limited consent and waiver agreements with the lenders under its asset-based revolving credit facility to extend certain financial reporting deadlines. These waivers related solely to the timing of the Company’s filings and did not arise from noncompliance with any financial covenants

On August 8, 2025, the Company and the administrative agent entered into a limited consent and waiver providing a 75-day extension of the applicable reporting deadlines to October 22, 2025, in exchange for a fee equal to 0.10% of the aggregate revolving commitments. On October 21, 2025, the Company exercised an additional 45-day extension option under the waiver, extending the reporting deadline to December 6, 2025, in exchange for an additional fee equal to 0.10% of the revolving commitments. On December 5, 2025, the Company entered into a Second Limited Consent and Waiver, further extending the reporting deadlines to January 20, 2026, in exchange for an additional fee equal to 0.10% of each consenting lender’s revolving commitment.

During the applicable extension periods, the Company was subject to certain customary conditions, including enhanced reporting requirements, periodic update calls with lenders, and a minimum excess availability requirement of $30,000. Failure to comply with these conditions would have constituted an event of default.

The Credit Facility provides for aggregate revolving commitments of up to $325,000 and matures on June 9, 2028. The Company has interest-only obligations under the Credit Facility until maturity, at which time all outstanding principal is due and payable. Interest accrues, at the Company's election, either (i) at a rate based on the Secured Overnight Financing Rate, subject to a floor of 2.50%, plus an applicable margin of 3.50%, or (ii) at an alternate base rate, subject to a floor of 3.50%, plus an applicable margin of 2.50%. The applicable margins may be reduced by 0.25% upon achievement of certain financial performance thresholds. The Credit Facility contains customary negative covenants, as well as financial maintenance covenants including a minimum Availability requirement, a minimum Consolidated EBITDA requirement, and a minimum Consolidated Fixed Charge Coverage Ratio of not less than 1.10 to 1.00. The Credit Facility is secured by substantially all of the inventory, accounts receivable, and related assets of the borrower. This is considered an all-assets lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate), subject to customary exclusions.

As of August 1, 2026, the Company remained in compliance with all covenants under the A&R Credit Agreement.

Debt Issuance Costs

The debt issuance costs have been deferred and are presented as noted below in the condensed Consolidated Balance Sheets, and are subsequently amortized ratably over the term of the respective debt.

Interest

The following table disaggregates interest expense:

Note 10. Leases

Lease assets and lease liabilities are recognized on the condensed Consolidated Balance Sheets for substantially all lease arrangements based on the present value of future lease payments as required by ASC 842, Leases. The lease portfolio consists of operating leases comprised of operating agreements which grant the Company the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. There isone immaterial finance lease and no short-term leases (i.e., those with a term of twelve months or less).

A right of use (“ROU”) asset and lease liability are recognized in the condensed 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. Lease terms generally range fromone year tofifteen 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, lease expense is recognized on a straight-line basis over the lease term. For variable commissions, lease expense is recognized as incurred. The Company's lease agreements do not contain any material residual value guarantees, material restrictions or covenants.

Incremental borrowing rates are used 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. An estimated collateralized incremental borrowing rate is applied as of the effective date or the commencement date of the lease, whichever is later.

The following tables summarize lease expenses:

The following table summarizes the Company's minimum fixed lease obligations, excluding variable commissions:

Future lease payment obligations related to leases that were entered into, but did not commence as of August 1, 2026, were not material.

The following summarizes additional information related to the Company's operating leases:

Note 11. Supplementary Information

Other (Income) Expense

During the 13 weeks ended August 1, 2026, the Company recognized other (income) expense totaling $(1,162), comprised primarily of a $(1,692) cash receipt from the release of funds previously held in escrow, offset by $530 of legal and professional fees.

During the 13 weeks ended August 2, 2025, the Company recognized other (income) expense totaling $1,497, comprised of Investigation related costs.

Note 12. Long-Term Incentive Compensation Expense

The Company recognizes compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:

Total unrecognized compensation cost related to unvested awards as of August 1, 2026 was $4,218 and is expected to be recognized over a weighted-average period of 1.14 years.

Note 13. Employee Benefit Plans

The Company sponsors a defined contribution plan for the benefit of substantially all of the employees. The Company is responsible to fund the employer contributions directly. The 401(k)-retirement savings plan provides an annual end of plan year discretionary match, in lieu of the current pay period match. Total employee benefit expense for these plans was $0 for both the 13 weeks ended August 1, 2026 and August 2, 2025, respectively.

Note 14. Income Taxes

The Company recorded an income tax benefit of $(7,062) on pre-tax loss of $(19,976) during the 13 weeks ended August 1, 2026, which represented an effective income tax rate of 35.4% and an income tax benefit of $(8,640) on pre-tax loss of $(26,911) during the 13 weeks ended August 2, 2025, which represented an effective income tax rate of 32.1%. The effective tax rate for the 13 weeks ended August 1, 2026 is higher than the prior year comparable period due to the Internal Revenue Code (IRC) 382 limitation on attribute utilization, increased projections of taxable income, and decrease in the valuation allowance.

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. As of August 1, 2026, the Company determined that it was more likely than not that it would not realize all deferred tax assets and the Company's tax rate for the current fiscal year reflects this determination. The Company will continue to evaluate this position.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change” (generally defined as a cumulative change in the Company's ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period), the corporation’s ability to use its pre-change net operating losses and certain other pre-change tax attributes to offset its post-change income and taxes may be limited. Similar rules may apply under state tax laws. As a result of the Rights Offering, Backstop Commitment, Private Investment, and Term Loan Debt Conversion completed on June 10, 2024, BNED may have experienced an ownership change as defined by Sections 382 and 383. The Company conducted a study to determine if an ownership change occurred. It was determined that an ownership change occurred under Section 382 and 383, and the corresponding annual limitations materially impacts the utilization of the Company's tax attributes including its $195,845 NOL carryforwards, $44,297 disallowed interest expense carryforwards, and $1,075 tax credit carryforwards as of May 2, 2026. The Company anticipates that $29,691 of these tax attributes will be made available during Fiscal 2027.