BNED - NYSE

Hello, everyone, and welcome to the Barnes & Noble Education Fiscal 2022 Second Quarter Earnings Conference Call. My name is Bethany, and I'll be your co-operator today. I would now like to hand the call over to your host, Andy Milevoj, Vice President of Investor Relations. Andy, please go ahead.

Good morning, and welcome to our fiscal 2022 second quarter earnings call. Joining us today are Mike Huseby, CEO and Chairman; Tom Donohue, CFO; Jonathan Shar, Executive Vice President, BNED Retail; David Henderson, President of MBS; and David Nenke, President of DSS. Before we begin the call, I'd like to remind you that the statements we make on today's call are covered by the safe harbor disclaimer contained in our press release and public documents. The contents of this call is the property of Barnes & Noble Education and are not for rebroadcast or use by any other party without prior written consent of Barnes & Noble Education. During this call, we will make forward-looking statements with predictions, projections and other statements about future events. These statements are based upon current expectations and assumptions that are subject to risks and uncertainties including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any forward-looking statements that may be made or discussed during this call. And now I'll turn the call over to Mike Huseby.

Thanks, Andy, and thank you all for joining us this morning. We were thrilled to welcome students back to campus this fall. Our second quarter results reflected their eagerness to return to an on-campus, in-person learning environment with a significantly increased resumption of on-campus events and sporting activities. This was further corroborated by an NRF report issued this summer that indicated that college students and their families had planned to spend an average of $1,200 on college or university items, 30% more than a year ago as students prepare to transition back to an in-person learning experience. The top 3 categories included electronics, storm furnishings and clothing. While many institutions implemented policies to return students to an on-campus learning experience, the volume of students, alumni and tourists is not yet back to pre-pandemic levels. The operating environment continues to present a number of different challenges, including undergraduate enrollment declines of approximately 3% according to the National Student Clearinghouse Research Center, fewer international students than pre-COVID levels and many community colleges continuing to offer virtual classes. In addition to enrollment declines, we are also experiencing challenges with escalating freight costs, labor shortages and supply chain issues. While we expect these conditions to persist through fiscal '22, we're hopeful that they will begin to mitigate as we move into the next fiscal year. Despite these challenges, our organization has proved resilient in providing best-in-class service to our campus partners and their students. The growth of our first day offerings help to mitigate the macro pressures on our course materials business and through our general merchandise partnership with Fanatics and Lids, we were better positioned to address the global supply chain issues facing many retailers. As you look ahead, our entire organization is excited by our company's momentum as we continue to execute on strategic initiatives that further distinguish our competitive offerings, which as a whole cannot be replicated in the marketplace. Our innovative academic solutions offerings, unparalleled merchandise assortment, new best-in-class omnichannel customer experience and strategic investments provide an unparalleled customer value proposition for the institutions and the customers that we serve, all of which we expect to accelerate our growth. The benefits of our inclusive access course material models are resonating with institutions across the country and delivering greater student access and better student outcomes. We are seeing tremendous demand for our first day complete equitable access program as schools have demonstrated the positive impact the solution has on improving student outcomes and reducing stress at the beginning of each academic term. Additionally, First Day Complete eliminates barriers to course material access, allowing students to engage with the course content from day 1 and achieve greater academic success. Equally important, the program also supports our school partners missions of improving student academic achievement, persistence and retention. It's not surprising that based on these benefits, we experienced significant growth in the 2021 fall term, when First Day Complete was offered through 65 campus bookstores, up from just 12 campus bookstores the prior year, representing approximately 295,000 total undergraduate student enrollment, up from 43,000 students flat fall and almost 7x year-over-year increase. With this growth, the program was available across a broad spectrum of schools from small private colleges to large public universities and multicampus community college systems. Year-over-year, revenue for both our first day models increased 80%. For the 2022 spring term, we have 10 additional stores that have signed up for First Day Complete, representing undergraduate enrollment of over 86,000 students. First Day Complete is disrupting the traditional course material delivery model in collaboration with leading institutions across the country. By delivering all course materials via one convenient service, First Day Complete ensures that students have access to all their learning materials across all of their courses before the first day of class. This allows them to engage with course content from day 1 to support their academic success. Also, First Day Complete offers full academic freedom for faculty, allowing them to select the best course materials for the term from BNED's expansive relationship with more than 6,000 publishers, creating a one-stop simplified experience. Data shows that course materials are still an optional purchase for many students, even though it's been well documented that students who have their course materials before the start of class performed better academically. First Day Complete helps to remove barriers and provide the same fundamental level of access across an entire institution for all students. Our survey showed that students who utilized the program felt that they had better experiences, were better prepared for the academic term and ultimately achieved better academic results confirming BNC's equitable access program is making a positive impact on student success. First Day Complete is also proving to be a competitive advantage for the schools that have adopted it, which we believe will further help to accelerate the adoption by additional schools. Some BNC partner institutions have started to report that they have seen enrollment growth, which they, at least in part, attribute to the ability to market the benefits of First Day Complete to prospective students. Turning now to our general merchandise business. With the resumption of on-campus events and sporting activities, we experienced 78% gross comparable sales growth during the second quarter. Our partnership with Fanatics and Lids offers an unparalleled merchandise assortment and a best-in-class omnichannel customer experience for logo and emblematic products, allowing us to offer our schools, a totally reimagined retail experience. This partnership expands the breadth and quality of our offerings in-store and online, including newer, more exciting brands such as Vineyard Vines, Lululemon, and johnnie-O that are highly relevant for our student, parent and alumni demographic. Both partners are leaders in their space, which provides us with buying power and a partnership that schools will benefit from. We have already seen the impact on winning new business and are excited to see what this year will bring as the strategic partnership will ultimately benefit the students and schools that we serve. Specific to Fanatics, we will benefit from their powerful e-commerce systems and data insights to grow market share and add new customers. These sites are truly best-in-class mobile-first experiences that leverage the Fanatics platform to provide an incredible user experience. We continued to transition additional school e-commerce websites to the new Fanatics experience and through November, we now have over 540 sites live on the Fanatics platform. Turning to our DSS business, our Bartleby suite of solutions continues to exhibit its rapid growth. DSS revenue grew 39% to $8.3 million, with probably revenue growing approximately 70% year-over-year. Pharma B generated 120,000 new growth subscribers during the quarter, representing a 33% year-over-year growth. We introduced Bartleby Plus during the quarter, which combined Bartleby Learn with Bartleby Write to provide a dynamic study bundle to help students tackle their assignments 24/7. This comprehensive offering includes over 5 million step-by-step textbook and Homework solutions, a math solver with detailed solutions, expert Q&A in 30 subjects, essay templates that help students outline their papers with an interactive guide, bladers and detection and a citation generator amongst other tools. Bartleby products and services are designed to improve student success and outcomes, offering pathways for learning that fit the schedules and demand of today's students. We believe our bundle provides tremendous value to help improve student outcomes. In conclusion, while there continue to be various challenges operating our business in this COVID-affected environment, we remain focused on executing our strategic growth initiatives, which is already helping to mitigate the impact of such near-term challenges. Most importantly, we believe these initiatives position us well for longer-term sustainable growth. With that, I will turn it over to Tom for the financial review.

Thanks, Mike. Please note that the second quarter of fiscal 2022, consisting of 13 weeks ended on October 30, 2021. All comparisons will be to the second quarter of fiscal 2021, unless otherwise noted. As Mike highlighted earlier, while we are not back to pre-pandemic levels, the second quarter, which is historically the highest sales period for the company, benefited from many students returning to in-person classes and greater attendance at campus events and sporting activities as compared to the year ago period when schools supplemented in-person classes with hybrid and remote learning models, coupled with a significant reduction in events and sporting activities. Total sales for the quarter were $627 million compared to $595.5 million in the prior year. This increase of $31.5 million or 5.3% was comprised of a $32.4 million increase from the retail segment, a $14.7 million decrease from the wholesale segment and a $2.3 million increase from the DSS segment. Retail gross comparable store sales increased 13.2% during the quarter. Gross comparable textbook sales were essentially flat as the broader industry headwinds were mitigated by the rapid growth of our first day offerings. BNC's First Day Complete and First Day by course offerings, increased revenue by 80% to $96 million during the quarter as compared to $53.4 million in the prior year period. Gross comparable general merchandise sales increased 78.3% as compared to a 52% decline a year ago. Our general merchandise business benefited from the return of many students to the campus and the reopening of most of our campus stores, the majority of which were closed in the year ago period due to COVID. As a reminder, per our agreement with Fanatics and Lids, logo and emblematic product sales are now accounted for under the agency accounting method, in which BNED receives 1% of sales for the logo and emblematic sales online and in-store. Each sales channel in store and online has its own commission rate, which will change as the relationship matures. Our comparable sales reflect the actual retail selling price or tender received for the products sold under the agency model, rather than solely the commission received, whereas GAAP sales on our P&L reflect the commission we've received. Net sales for the wholesale segment decreased $14.7 million or 40.5% to $21.7 million, primarily due to COVID-19-related supply constraints resulting from the lack of on-campus textbook buyback opportunities during the prior fiscal year and lower customer demand, which was partially offset by lower returns and allowances. Additionally, during the prior year period, wholesale CSS model fulfilled direct to student course material orders for retail campus bookstores that were not fully operational due to COVID-19 campus store closures, whereas those sales shifted back to the campus bookstores in the current period. DSS sales grew $2.3 million or 39.2% to $8.3 million, benefiting from an increase in subscription sales. The consolidated gross margin rate for the quarter was 23.2% compared to 19.4% in the prior year period. This was primarily due to the favorable sales mix of higher-margin general merchandise products, lower contract costs on renewals and new contracts, coupled with lower inventory reserves and lower markdowns. Our selling and administrative expenses increased by $15.9 million or 17.3% compared with the prior year period as we reopened most stores and brought employees back to serve the increase in on-campus students as compared to the prior year period when we furloughed many employees in response to our COVID related temporary store closures. At the end of the quarter, our cash balance was $11 million with outstanding borrowings of $183.3 million as compared to borrowings of $99.5 million in the prior year period. This increase is mostly due to the timing of receivables associated with the significant growth of our First Day offerings. Schools generally remit payments for students enrolled in the courses after their student drop add dates. Our current liquidity position remains strong. CapEx for the quarter was $9.9 million, essentially in line with the prior year period. Currently, our retail segment operates 1,445 college, university and K-12 school bookstores, comprised of 794 physical bookstores in their e-commerce sites as well as 651 virtual bookstores. With that, we will open the call for questions. Operator, please provide instructions for those interested in asking a question.

[Operator Instructions] The first question comes from Alex Fuhrman at Craig-Hallum Capital Group.

I wanted to ask about the First Day Complete offering. It looks like it added a good amount of revenue for the quarter. Can you talk about how it performed operationally given everything that's going on with the supply chain and in terms of profitability and how it contributed to the overall EBITDA for the quarter? Would you say that it met your expectations here in the first big semester with a critical mass of students?

Yes, Alex, thanks for your question. It's I think probably the primary one that we've been focusing on, and we're still given that rush in the fall semester are still underway, still analyzing some of it given how the cash flows are on First Day Complete. But we're very, very happy with the performance, especially the operational execution First Day Complete, and I'll let Jon Shar talk about it a little bit more. But from our perspective, it went very, very well. Some of that was aided by the fact that a large percentage of the courseware that was being sold in some of the big First Day Complete implementations that we did this year for the first time, were digital courseware, which made it somewhat easier to fulfill in the large schools that elected the First Day Complete versus those with a larger mix of physical books. But the execution went very well. In terms of the financial impact, there are several variables that effect for a complete contribution to the financials and the economic kind of formula, enrollments, conversion of enrollments and then just the unit pricing for the semester hours. If you're looking at how do you build the model and then how is the result. To answer your question around expectations, I think that our expectations depends on what time of year you're talking about. I think when we built our budget for fiscal year '23 -- or '22 rather, sorry, back in the spring, we didn't have the knowledge of the enrollment declines, especially in the community colleges that happened. I think the conversion was very, very close to where we expected it to be. And then average pricing, it varies by school, probably somewhat lower just because the number of credit hours. There are a number of full-time students, but there are also a lot of part time students given the environment we're in right now. So the number of credit hours, it's probably a little bit lower than we thought it would be. But overall, very, very pleased with the performance of First Day Complete and First Day. And I'll let Jon talk about it a little bit further.

Yes. Thanks, Mike. And just building on that, the team did an incredible job of executing First Day Completed scale across the 65 campus stores where it was implemented in fall term. We really had complete coverage of the book lists for those schools. We were aided by the transition to digital and the availability of digital content that helped with the execution. But I would say from an execution standpoint, at scale, it was outstanding and really sort of gives us a lot of confidence in the ability to continue to scale the program. And in terms of sort of expectations, in terms of the model and the benefit of the program, I think that it was very much in line with our expectations. And then the nice thing about the program is that it's really done on an individual campus-by-campus basis, local basis. So the cost and the pricing on a per credit hour basis is really individual for each campus based on their weighted average of enrollment against courses and the specific book list against those courses. So we did see prices come down, but that's because the cost of the content came down as well. And also our school's desire to bring down the cost of content, which help us from an operating cost standpoint. So I think the model was really great. We've added, as we said, in the script, 10 additional campus stores and approximately 86,000 in undergrad enrollment for spring, which is not really a term where you'd expect to add a lot of campus stores and enrollment cumulative programs based on the fact that the majority of campuses and institutions would make that decision on an academic year basis when tuition and fees are set for that year in advance in sort of the first quarter time frame of -- calendar first quarter time frame. So incredibly excited about the prospects of First Day Complete and what will mean for our campus partners student outcomes and our business.

That's really helpful ...

Add one comment, Alex, too, is that this is a -- we're just scaling this. This is our first semester where we really got significant scale on First Day Complete. And there's a lot of things that we learned in scaling in terms of how different schools are marketing this program, what works, what didn't work as well, which resulted in, in some cases, lower what I would call conversion or lower -- higher opt out perhaps than we would see in many other cases, we have some schools that are 100%. We have some that are lower, getting us to an average that's kind of below 100%. But we learned a lot, and I think that will only improve the conversion and results going forward and starting in the spring.

Great. That's really helpful. And I did want to follow up on the 10 additional schools that are signed up for the spring semester. That was certainly unexpected given that schools don't typically tend to shake things up like that in the middle of the academic year. Can you talk a little bit about the sales pipeline? I mean, I would have to think it's pretty strong given that you have 10 schools joining the program midyear. Is it too early to get a sense of how many strong leads you have heading into the fall semester next year?

Specific guides. Yes. Go ahead, Joe.

Yes, we're optimistic. I mean I think the 10 -- as you said, the 10 stores and 86,000 of additional enrollment are a really good sign. And I think why we're so optimistic is the impact that the program is having on student outcomes and having students prepared and the benefits of retention and persistence that our institutions are showing. And as Mike said in his script, certain institutions are also showing that enrollment growth because of their ability to market this program. So based on that, the pipeline is really robust and really excited about the prospects of that -- based on the data that's coming from the institutions that have executed the program with us.

The next question comes from Ryan MacDonald at Needham.

Congrats, a nice quarter here. Great to see the progress you're making on the Fanatics and Lids relationship in terms of additional sites that you've been adding. Just curious, as you've been -- those sites have been going live. What sort of sort of uplift you're seeing to general merchandise sales from that perspective? And sort of how you're feeling about as we see these additional sites rolling out about sort of the opportunity here for general merchandise as we go into, say, the spring semester?

Thanks, Ryan. That's a really important question. It's -- for purposes of the fall rush, as I think we've disclosed, we had about just under 15 schools that were really up and running on the what we call Fanatics e-commerce system. As you know, we turned over the management of the stores in terms of the emblematic logo items to Lids and Fanatics under the FLC entity that we partnered with back in April. And they worked feverishly to get inventory into the stores all summer long as it became apparent that there was going to be a snapback in demand. Those 15 stores where we had e-commerce results increased substantially. You're trying to compare it to '20 and you're trying to compare it to '19. When we compare it to 2020 was a big year for e-commerce because of the fact that there were no -- very, very few campuses open, very few stores open. So the e-commerce activity is much higher in '20. So we compare it to both '20 and '19 and comparing it to both years without getting into the specific percentages, there's substantial improvement. It's important to note that the 540 sites that we talk about, they are now part of the -- subject to the Fanatics experience, which means that a student comes into our e-commerce system and if they select from the menu, they want apparel, logo, emblematic items, they're seamlessly transferred into the fanatic system, which is being customized to reflect each student's brand -- each school's brand, sorry, the brand of each school, more local and personalized approach. And that's only happened for over 500 of those schools within the last 6 weeks or so. So what we're really looking forward to is -- and we've started to see it already with Black Friday, we're looking at the results which we'll report in our third quarter and also Cyber Monday, which we haven't gathered the results from -- we haven't received the results yet from Fanatics. But we're very encouraged by the early results from what we saw for this vastly higher number of schools that are now on offering the Fanatics experience. And I would encourage you or anyone else that's interested to go look at the sites and see how expansive they are in terms of assortment and how easy they are to use and how representative they are what I would call really best-in-class e-commerce website. So we're excited about what's going to happen not just in the spring semester, but over the holidays from an e-commerce perspective, now that we have so many schools up and running, not just on e-commerce, but also stores, but particularly e-commerce.

Yes. It's a really good point on the e-commerce side, when you think about the holiday season and the potential that opens up here. As my second question I really wanted to ask about Bartleby. It's great to see the continued strength in the growth rate there and that the gross subs numbers continues to climb. Just curious to see what you're seeing in terms of student usage and adoption there as we've progressed through the semester? Because obviously, as we saw check put up some weak numbers and had talked about maybe some changing student usage patterns there. Just trying to understand if that's something that's more industry-wide or how Barnes & Noble's performance comparatively looks for Bartleby?

Yes, I think David Nenke can address that for us.

Yes. We've seen students come back in as we said in the introduction, the students are learning through a mix of on-campus as well as virtual. We are providing service to customers to help augment their learning. So we -- I guess, agnostic to their learning method, we want to be there to support students as they learn. We have continued to see good usage. Our customers are continuing to use us. And in fact, we saw most of our metrics for our paid subscribers actually increased year-on-year in regards to time line sizes and usage, et cetera. So we're encouraged that we're building the services that can help support customers as they go through their learning. And so we're excited about what we're seeing. I wouldn't speculate on more broadly industry dynamics or anything like that or we're trying to do was focus on providing the best service we can to our customers. So we're seeing good usage and we're excited about how customers are responding to our products.

The next question comes from Rory Wallace at Outerbridge Capital.

I was curious on First Day Complete. With the new signings, which seem like a quite high average enrollment for the spring term, is this a situation where the First Day revenues could actually grow sequentially in the January quarter? And just following on some of the comments that Mike made around optimizing the marketing strategy behind the programs . Is this something where the schools are being receptive to kind of this co-marketing feedback in terms of how to optimize the program structure to really drive enrollments or conversions?

Yes, Rory, this is Mike, and I'll let Jon jump in. But on your question around marketing, co-marketing, each -- like I said, each school is different, and they approach the marketing differently. Some are more cautious than others, some are very aggressive. Some have marketed First Day Complete as books are free. And as Jon said, in those cases, some of those schools have actually increased enrollments and have gotten the attention of their, what we would call competitor schools in their geo areas, we're now calling us saying, "Hey, this works for them, we need to see this". Some of those schools that are cautious because during the sales process, there's a lot of people in the schools that are involved in making the decision to go to a First Day Complete inclusive access model. And so I think some of the schools are perhaps overly cautious in terms of how they market and how they might highlight the ability to opt out and that type of thing, sometimes probably more so than the benefits that's happened in a few cases. And I think our conversations with the school when we were in the process of selling the First Day Complete product. It's clear that they see the benefits of it. And I now -- I think now that they understand those benefits aren't going to be fully realized until -- unless they are more, I wouldn't call it aggressive in their marketing, they're just more positive in their marketing as opposed to cautious and basically trying to send a signals that more cover themselves from some of the constituents and the factual and others have had some issues during the sales process. So I think the answer is yes. There are -- these learnings that I referred to, that's basically one of the things I was referring to is the learnings around the marketing. And I think the schools that we have that experience with have come around, but I'll let Jon talk about it more specifically if he wants to.

Yes. No, and I think that just building on that based on the outstanding execution from our store teams and supporting the institutions that move to First Day Complete, there is a lot of confidence in our ability to execute at a high level and drive the student outcomes and convenience and really create a concierge experience for students and really sort of disrupt the course of material delivery model at those schools. And there's been a lot of great discussions on how to collaborate and optimize the marketing and positioning of the program within institutions. So we think that there's a lot of opportunity to -- within the schools that we've executed to improve the percent of students that are participating in the program and driving our sell-throughs even higher at those institutions as well as the students, as they've experienced this for the first time, many of the schools were the -- this was the first semester that they're participating in the program. And as students see what the benefits and having sort of a box of books ready for them prior to the first day of class, picking that up. I think there's more and more acceptance and understanding of the benefits of that of having materials, doing better in class, being better prepared, and our survey results show that as well. So I think it's both the schools becoming very willing to collaborate in marketing and students becoming more excited that over time. We're going to see even enhanced participation in growth within the schools, and that also will lead to more schools participating as they see the benefits of competitive or peer institutions.

Rory, your question on incremental January revenue growth, we're not obviously giving any specific guidance on what's going to happen. But it just -- it would be logical to assume that that's going to happen with the number of student enrollments being added under the First Day Complete program.

I appreciate that. And I guess following on the question around the fall '23 pipeline. Do you have enough sort of sales and operational capacity to try to target similar or even higher levels of enrollment growth for First Day Complete in fall of 2030. I understand just a lot of running parts with the environment right now.

[indiscernible] yes, we do. And yes, we are. I mean we are -- we do have a pipeline. We do have a very, very detailed sales process. We won't get into describing, but it's got a very robust pipeline for fall of '23. And some of the things you see happening, Some of the schools you see adopting First Day Complete. In the spring semester, this year are some schools that are pulling forward, but most of those are -- most of the schools that we have on our sites, so to speak, are having discussions with or have commitments from, in many cases, for fall of '23. Our schools that someone is doing earlier, they just can't get to the point where we felt comfortable making that change that quickly, given the fact that they've already published rates and tuition rates and that type of thing for fiscal year -- our FY '22 for spring semester.

Great. And Tom, just a couple for you in terms of one on cash flow for First Day Complete. I know it's -- you're creating more receivables and kind of cadence to collections now. I mean, do you think that those -- are those going to be kind of worked down by the end of this fiscal? Or is this kind of a structurally higher level of some receivables and DSOs that you're going to be running with? And maybe you just comment briefly on that. And then my last question was just on incremental margin performance. Obviously, it's a tough supply environment, but at the same time, you seem to be getting a good benefit from your higher-margin initiatives. So just curious how you're feeling about sort of margin performance in the next few quarters?

Yes. Thanks, Rory. In terms of working capital cycle, historically, our working capital cycle was get the product in, sell it to the students, get the cash and then pay the vendors. To your point, and it's a good point, with the first day and first day complete products and the cadence on the campus, we're typically providing the products in a lot of instances paying for those products before we get paid by the school. So you're right, the receivables are higher. And this chalks up to perhaps lessons learned. And we'll look to address that, and we're collecting it as we get through the semester. But really, the billing -- the real important date in the first day and first at complete products is that census date, and that's really what triggers the billing and reconciliation with the school student by student. So you will see -- and you see it in the balance sheet, the receivables are higher, which is reflective of the growth of those programs, which is great that they're growing so quickly. And you would expect, as we get through the spring term, that a lot of that would wash out by the fiscal year-end. So yes, that should happen. And in terms of the margin performance, I think it really comes down to what was missing last year with students on campus and what we're experiencing, and it's certainly not back to the pre-pandemic levels is the mix. When the kids come into the store and they pick up their materials or they're buying their course materials, they're also getting other supply products and cafe and convenience products as well as emblematic and logos. So having the full experience on campus will drive that sales mix, which should improve the margin performance over time. It's certainly not back to pre-pandemic levels, but it's certainly moving in the right direction.

It depends how we'll be pulling [indiscernible], This is Michael Huseby. In the general merchandise area, given the supply chain issues, we did sell through some of the older inventory that was transferred to the rest of the stores are as many as possible, also available online in SEO. We've seen good take-up and good usage from our customers on that product. We're very excited about the full range of features being available to customers, et cetera. So that will be one of our key priorities going forward as we kind of look at providing a full suite of services to our customers and how they use it and how they engage with their products. So for the back half of the year, we'll continue to work on features and some of those things that part of the process is going to be one of the key initiatives for us and really getting that in the hands of students so they can use the full range of the product. So that was, I think, one of the things that we were excited about going into, and it exceeded our expectations for the fall rush period.

[Operator Instructions] We don't appear to be having any more questions coming through. So I'll hand the call back to Andy for any closing remarks.

Great. Thanks, Bethany, and thank you all for joining us on today's call and your continued interest in BNED. Please note our next scheduled financial release will be our fiscal '22 third quarter earnings in early March. We hope everybody has a great holiday season. Thank you.