Barnes & Noble Education Inc. (BNED) is having quite the Tuesday. Shares rocketed more than 36% higher after the company dropped some legitimately good news: promising preliminary financial results and the conclusion of an internal accounting investigation that, thankfully, wasn't as bad as it could have been.

The Turnaround Story

Let's start with the numbers that actually matter. For the fiscal year ended May 3, 2025, Barnes & Noble Education expects preliminary revenue of $1.6 billion—a 2.6% increase year-over-year. More impressive is the 7.5% jump in comparable store sales, which suggests the company is actually selling more stuff, not just inflating numbers through new locations.

But here's the real headline: the company is projecting a return to profitability in the first half of fiscal 2026. We're talking net income between $3.0 million and $8.0 million, which is a dramatic swing from last year's losses. For a company that's been struggling, this is the kind of turnaround that gets investors excited.

The Accounting Investigation

Now about that audit investigation. The company confirmed that accounting irregularities were the result of improper manual journal entries made by a single employee who has since been terminated. In other words, this was isolated misconduct, not systemic fraud. That's about as good an outcome as you can hope for when there's an accounting probe.

Operational Wins

Beyond the headline numbers, there are some genuinely encouraging signs. The company's "First Day" course material program saw revenue jump 25.3%, which is substantial growth in a key initiative. And the balance sheet is getting healthier—net debt is expected to decrease by nearly $92 million year-over-year. That's real deleveraging.

CEO Jonathan Shar emphasized that the company is now focused on building momentum through strong execution, which is exactly what you want to hear after resolving accounting issues and posting better-than-expected results.

Market Reaction

Reflecting the market enthusiasm, Benzinga Edge rankings currently assign BNED a Momentum score of 10.06. Shares were trading up 36.7% at $9.14 at the time of publication Tuesday, according to Benzinga Pro data.

The stock's surge makes sense when you consider what investors are actually getting: evidence of a genuine operational turnaround, a cleared accounting investigation with minimal damage, and a path back to profitability. That's the kind of trifecta that moves share prices.