SCHL

Scholastic's third quarter results fell short of Wall Street's expectations, prompting a negative market reaction. Management attributed the underperformance to the seasonality of its business, with schools out of session and sales particularly light in its Children's Books and Education divisions. CEO Peter Warwick emphasized that this period typically contributes a small portion of annual revenue, while noting that the quarter also reflected the full impact of sale-leaseback transactions completed last year. Additionally, lower revenues in Education and Children's Books were only partially offset by growth in the Entertainment segment. Is now the time to buy SCHL? Find out in our full research report (it's free). - Revenue: $216.8 million vs analyst estimates of $224.7 million (3.9% year-on-year decline, 3.5% miss) - Adjusted EPS: -$3.63 vs analyst expectations of -$3.42 (6.1% miss) - Adjusted EBITDA: -$63.6 million (-29.3% margin, 14.2% year-on-year decline) - EBITDA guidance for the full year is $140 million at the midpoint, in line with analyst expectations - Operating Margin: -39.6%, up from -40.6% in the same quarter last year - Market Capitalization: $618.2 million While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Brendan Michael McCarthy (Sidoti & Company) asked if higher fuel costs in international markets were a new headwind and how they were incorporated into guidance. CFO Haji Glover clarified these costs were anticipated and already factored into full-year forecasts. - Brendan Michael McCarthy (Sidoti & Company) inquired about the Entertainment segment's margin expansion. Glover attributed improved margins to operating leverage and a favorable business mix, with fixed depreciation from past acquisitions also influencing results. - Brendan Michael McCarthy (Sidoti & Company) sought details on Book Fairs' early-season performance and the success of new fair models. CEO Peter Warwick reported strong engagement and expansion into new school formats, with both returning and first-time schools participating. - Brendan Michael McCarthy (Sidoti & Company) asked whether increases in fair participation were driven by new schools or repeat engagements. Warwick stated that both factors contributed positively to the overall fair count. - No other analysts participated in the Q&A portion. Looking ahead, the StockStory team will be monitoring (1) the execution and sales impact of major franchise launches in Trade Publishing, (2) the trajectory of Book Fairs' expansion into new formats and school segments, and (3) progress on restructuring and commercial effectiveness in the Education segment. Continued margin performance in international markets, particularly in the face of rising fuel costs, will also be a critical signpost for near-term profitability. Scholastic currently trades at $33.24, down from $34.83 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it's free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Educational publishing and media company Scholastic (NASDAQ:SCHL) missed Wall Street's revenue expectations in calendar Q3 2026 (fiscal Q1 2027), with sales falling 3.9% year on year to $216.8 million. Its non-GAAP loss of $3.63 per share was 6.1% below analysts' consensus estimates. Is now the time to buy SCHL? Find out in our full research report (it's free). - Revenue: $216.8 million vs analyst estimates of $224.7 million (3.9% year-on-year decline, 3.5% miss) - Adjusted EPS: -$3.63 vs analyst expectations of -$3.42 (6.1% miss) - Adjusted EBITDA: -$63.6 million (-29.3% margin, 14.2% year-on-year decline) - EBITDA guidance for the full year is $140 million at the midpoint, in line with analyst expectations - Operating Margin: -39.6%, up from -40.6% in the same quarter last year - Market Capitalization: $618.2 million Scholastic's third quarter results fell short of Wall Street's expectations, prompting a negative market reaction. Management attributed the underperformance to the seasonality of its business, with schools out of session and sales particularly light in its Children's Books and Education divisions. CEO Peter Warwick emphasized that this period typically contributes a small portion of annual revenue, while noting that the quarter also reflected the full impact of sale-leaseback transactions completed last year. Additionally, lower revenues in Education and Children's Books were only partially offset by growth in the Entertainment segment. Looking ahead, management's guidance is shaped by expectations for stronger performance in the coming quarters, driven by a robust fall publishing slate and key franchise activity. Warwick highlighted the upcoming launches tied to Harry Potter, Dog Man, and The Hunger Games, as well as anticipated growth in Book Fairs and Entertainment. CFO Haji Glover reaffirmed full-year guidance, pointing to improved cost structures in Education and operational leverage in Book Fairs and Entertainment, but also acknowledged that international profitability may be pressured by higher fuel and freight costs. Management identified seasonal headwinds and lower education sales as key factors behind the shortfall, while highlighting early momentum in Book Fairs and strong franchise activity as positive drivers for the fall. - Book Fairs momentum: Early bookings and fair count are ahead of last year, with strong traction in Christian schools and expanded formats helping to grow Scholastic's total addressable market. Management sees Book Fairs as a core driver of sustainable and profitable growth, citing the segment's unique scale and operational leverage. - Franchise publishing pipeline: The fall slate features significant activity from household franchises including Harry Potter, Dog Man, and The Hunger Games. The "Read It Before You See It" campaign and tie-ins with upcoming film and TV releases are expected to boost engagement and book sales, with additional milestone events planned for the coming years. - Entertainment segment growth: The business saw a notable increase in production activity and revenue, driven by contracted projects and expanding digital engagement, particularly with Clifford the Big Red Dog. Management expects this momentum to continue as new shows and content pipelines develop. - Education segment restructuring: In response to continued market pressure and reduced school and district spending, Scholastic is streamlining products and operations. Management is focused on diversifying the customer base, improving commercial execution, and aligning costs with current conditions to position the segment for future stability. - International opportunity and challenges: Global franchise activity, such as renewed interest in Hunger Games and Dog Man, is supporting international growth. However, profitability is expected to be tempered by inflation and higher logistics costs in certain markets, particularly due to increased fuel expenses. Management expects full-year performance to be driven by key franchise launches, operational improvements, and continued investment in growth initiatives, while remaining cautious about cost pressures in international markets and education. - Franchise-driven revenue growth: Anticipated major releases tied to Harry Potter, Dog Man, and The Hunger Games are expected to drive sales in the next two quarters, especially through tie-in campaigns and coordinated publishing efforts. Management believes this activity will support improved trade and international segment performance. - Book Fairs and operational leverage: The company is counting on a higher number of fairs and increased revenue per fair in the fall, supported by expanded formats and new school participation. Management expects the operating leverage in this business to contribute to overall profitability improvements. - Education and international cost headwinds: While restructuring in Education aims to boost commercial execution, management remains cautious about persistent spending constraints in U.S. schools and international margin pressures from higher fuel and freight costs. These factors could moderate overall margin expansion. Looking ahead, the StockStory team will be monitoring (1) the execution and sales impact of major franchise launches in Trade Publishing, (2) the trajectory of Book Fairs' expansion into new formats and school segments, and (3) progress on restructuring and commercial effectiveness in the Education segment. Continued margin performance in international markets, particularly in the face of rising fuel costs, will also be a critical signpost for near-term profitability. Scholastic currently trades at $33.24, down from $34.83 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free for active Edge members). WHILE YOU'RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management attributed the first-quarter operating loss to typical business seasonality, where schools are out of session and revenue historically represents only 14% of the annual total. - The Book Fairs business is positioned as a core earnings engine, with growth driven by expanding the total addressable market through new school communities, including Christian schools and extended formats. - Trade Publishing performance is anchored by a robust slate of global franchises, specifically leveraging the upcoming HBO Harry Potter series and the 10th anniversary of the Dog Man series. - Scholastic Entertainment saw significant revenue growth and improved profitability due to increased production activity and a strong pipeline of contracted projects. - The Education segment is undergoing a go-to-market transformation to improve sales productivity amid pressured market conditions and the conclusion of ESSER funding. - International results benefited from operational discipline and early momentum from The Hunger Games franchise ahead of the fall film adaptation. - Consolidated revenue was impacted by the elimination of rental income following the sale-leaseback transactions completed in December. - Management affirmed full-year guidance for revenue growth of 2% to 4% and adjusted EBITDA between $135 million and $145 million. - Revenue growth is expected to accelerate starting in the second quarter, supported by the back-to-school season and a heavy holiday publishing schedule. - The Harry Potter franchise is viewed as a long-term growth driver, with a 10-year rollout plan for the HBO series and the 30th anniversary of U.S. publication in 2028. - Education segment revenue trends are expected to improve in the second half of the year as subscription recognition and key opportunities align with the academic calendar. - International operating income is expected to be modestly lower for the full year due to inflationary pressures and higher fuel and freight costs in specific markets. - The sale-leaseback transactions continue to impact year-over-year comparisons through increased lease expenses and the loss of prior rental income. - School and district spending remains under pressure as administrators manage higher fixed costs and the expiration of federal pandemic relief funding. - Higher unallocated overhead costs in the quarter reflected the timing of employee-related expenses and investments in corporate strategic initiatives. - The company continues its capital return strategy, with $157 million remaining authorized for future share repurchases. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that higher fuel costs, driven by geopolitical conflicts, are specifically affecting international markets. - These costs were already anticipated in the full-year forecast, allowing the company to maintain its consolidated guidance. - The margin expansion to 28% was attributed to strong operating leverage and the specific mix of production business during the quarter. - Management noted that fixed depreciation from acquisitions also influences the EBITDA calculation, and they remain bullish on the segment's future leverage. - Bookings and fair counts are currently ahead of the prior year, with particular strength in larger schools which offer better margins. - Management is using new formats to reach previously untapped school segments, though they cautioned that full validation of revenue-per-fair will require more data from the fall season.

This article first appeared on GuruFocus. - Revenue: Decreased 4% to $216.8 million, compared to $225.6 million in the prior year period. - Operating Loss: $92.2 million, in line with the prior year period. - Adjusted Operating Loss: $88.7 million, compared to $81.9 million in the prior year period. - Adjusted EBITDA: Loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. - Net Loss: $71.2 million, or $3.77 per diluted share, compared to $71.1 million, or $2.83 per diluted share in the prior year period. - Adjusted Net Loss: $68.6 million, or $3.63 per diluted share, compared to $63.3 million, or $2.52 per diluted share last year. - Children's Book Publishing and Distribution Revenue: Decreased $3.6 million to $105.8 million, compared to $109.4 million last year. - Book Fairs Revenue: $33.2 million, compared to $34.1 million in the prior year period. - Book Clubs Revenue: $2.1 million, compared to $1.8 million a year ago. - Consolidated Trade Revenue: Decreased $3 million to $70.5 million, compared to $73.5 million in the prior year. - US Trade Revenue: Increased 4% year-over-year. - Children's Book Segment Adjusted Operating Loss: Increased to $37.8 million from $34.3 million in the prior year period. - Entertainment Revenue: Increased $6.5 million to $20.1 million, compared to $13.6 million in the prior year. - Entertainment Segment Adjusted Operating Loss: Improved $2.4 million to $1.6 million, compared to $4 million a year ago. - Education Revenue: $30.4 million, compared to $40.1 million a year ago, a decrease of $9.7 million. - Education Segment Adjusted Operating Loss: Increased to $23.3 million, compared to a loss of $21.2 million in the prior year period. - International Revenue: $60.5 million, compared to $59.4 million a year ago. - International Segment Adjusted Operating Loss: Improved to $2.7 million, compared to $4.1 million in the prior year period. - Unallocated Adjusted Overhead Costs: Increased $5 million to $23.3 million, compared to $18.3 million in the prior year period. - Net Cash Used by Operating Activities: $94.6 million, compared to $81.8 million in the prior year period. - Free Cash Use: $110.8 million, compared to $100.2 million last year. - Net Debt: $86.8 million, compared to $242.8 million in the prior year period. - Capital Returned to Shareholders: Approximately $29.6 million, including $25.8 million through share repurchases and $3.8 million in dividends. - Full Year Fiscal 2027 Outlook: Revenue growth of approximately 2% to 4%; adjusted EBITDA of approximately $135 million to $145 million; free cash flow of approximately $35 million to $40 million. - Warning! GuruFocus has detected 5 Warning Sign with SCHL. - Is SCHL fairly valued? Test your thesis with our free DCF calculator. Release Date: September 24, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Book fairs early performance indicators are strong, with bookings and fair count ahead of prior year, and expansion into Christian schools and new formats growing the addressable market. - Scholastic Entertainment delivered strong first quarter with significant revenue growth and improved profitability, driven by increased production activity and a strong pipeline for fiscal 2027. - Trade publishing has a robust fall slate, including a major Harry Potter publishing program tied to the upcoming HBO series, a new Dog Man title, and Hunger Games franchise activity, supporting expected stronger revenues in Q2 and full year. - International segment saw early benefits from renewed Hunger Games activity and announced a publishing partnership with Mattel in India, with full-year revenue growth expected. - Company affirms fiscal 2027 guidance for revenue growth of 2-4% and adjusted EBITDA of $135-145 million, with year-over-year revenue growth expected to begin in Q2. - Net debt significantly improved to $86.8 million from $242.8 million last year, reflecting sale-leaseback proceeds, and the company continues to return capital to shareholders with $157 million remaining under share repurchase authorization. - First quarter revenues decreased 4% to $216.8 million, with operating loss of $92.2 million, reflecting seasonality and the full-period impact of sale-leaseback transactions. - Education segment revenues fell 24% to $30.4 million due to continued pressure on school and district spending, the end of ESSER funding, and higher fixed costs, with segment adjusted operating loss widening to $23.3 million. - Children's Book publishing and distribution segment adjusted operating loss increased to $37.8 million from $34.3 million, with book fair revenues slightly down due to timing. - Unallocated adjusted overhead costs increased $5 million to $23.3 million, driven by higher corporate strategic initiative costs and timing of employee-related expenses. - Net cash used by operating activities increased to $94.6 million from $81.8 million, and free cash use rose to $110.8 million, reflecting working capital requirements and higher rent expense. - Adjusted net loss per share increased to $3.63 from $2.52, due to higher adjusted net loss and fewer shares outstanding following significant share repurchases. Q: Haji, you mentioned expecting operating income to be modestly lower this year due to higher fuel costs weighing on certain markets. Is that a new development, and has it been factored into the reaffirmed fiscal 2027 adjusted EBITDA guidance?A: Haji Glover, CFO: That comment referred specifically to international markets where fuel costs tied to the war are adding expense, but much of it was already anticipated in our full-year forecast. We are in line with everything right now, which is why we are reaffirming guidance. Q: Turning to the Entertainment segment, it was profitable on an adjusted EBITDA basis with margin expanding to 20% from mid-single digits. Can you give more detail on the margin profile there?A: Haji Glover, CFO: It is all based on the operating leverage and mix of the business. We carry fixed depreciation from the acquisition within our EBITDA calculation, and those factors really drive the result. The reason we entered this business was the significant operating leverage, so we are excited about the change and the future. Q: On the book fairs business, early indicators sound strong. Has that growth rate exceeded your expectations, and how are the newer models selling?A: Peter Warwick, CEO: The metrics heading into the fall season are really strong and we feel very confident. Fair count is at or above expectations and above last year, including more fairs in larger schools, which is what we want. We cannot yet fully validate revenue per fair until more fairs occur, but response to our new models is very strong. We are expanding the book fair market in a way nobody has done before, with good host engagement and Scholastic dollars in very good shape. Q: Has that growth been driven by an increase in the number of schools engaging in fairs, or more returning schools adding a second fair, or a mix of both?A: Peter Warwick, CEO: It is basically both. The number of returning schools is good, and we are also adding new schools and new places for the new formats. The overall fair count is very promising and there are very good feelings all around. Q: Can you discuss the first quarter consolidated results and how they compare to the prior year?A: Haji Glover, CFO: First quarter revenues decreased 4% to $216.8 million from $225.6 million, reflecting lower education and children's book publishing and distribution revenues and the elimination of rental income after the sale-leaseback transactions, partly offset by higher entertainment revenues. Operating loss was $92.2 million, in line with the prior year. Adjusted operating loss was $88.7 million versus $81.9 million, mainly on higher overhead costs, partly offset by improvement in entertainment and international. Q: What drove the Children's Book Publishing and Distribution segment results in the quarter?A: Haji Glover, CFO: Segment revenue decreased $3.6 million to $105.8 million. Book Fair revenues were $33.2 million versus $34.1 million, mainly on timing, while Book Clubs rose to $2.1 million from $1.8 million. Consolidated trade revenues fell $3 million to $70.5 million on prior-year international co-edition sales that did not recur, though US trade revenues rose 4% on strong performance including Dav Pilkey titles. Segment adjusted operating loss widened to $37.8 million from $34.3 million. Q: What is the outlook for the Education segment given continued pressure on school and district spending?A: Haji Glover, CFO: Education revenues were $30.4 million versus $40.1 million a year ago, with school and district spending under pressure as districts manage higher staffing and fixed costs, expanding unfunded mandates, and the end of ESSER funding in March. Segment adjusted operating loss widened to $23.3 million from $21.2 million. We still target improved full-year performance, with revenue trends improving as the year progresses on the timing of key opportunities and subscription recognition, particularly in the second half. Q: How did the International segment perform, and what is the full-year outlook?A: Haji Glover, CFO: International revenues were $60.5 million versus $59.4 million, roughly in line excluding a $1.2 million favorable FX impact. Segment adjusted operating loss improved to $2.7 million from $4.1 million on continued cost management and operational efficiencies. For the full year, we expect revenue growth supported by publishing and franchise activity across key markets, while operating income is expected to be modestly lower partly on inflation and higher fuel and freight costs in some markets. Q: What drove the increase in unallocated adjusted overhead costs?A: Haji Glover, CFO: Unallocated adjusted overhead costs rose $5 million to $23.3 million from $18.3 million. On a comparable basis they increased $3.9 million, primarily on higher costs related to corporate strategic initiatives and the timing of employee-related expenses. Overhead will continue to reflect the full-year impact of the sale-leaseback transactions, including lost rental income and additional lease expense. Q: Can you walk through cash flow, the balance sheet, and capital returns in the quarter?A: Haji Glover, CFO: Net cash used by operating activities was $94.6 million versus $81.8 million, reflecting working capital requirements, lower cash remittance, and higher rent expense and lost rental income from the sale-leaseback, partly offset by lower inventory and royalty advance payments. Free cash use was $110.8 million versus $100.2 million. Net debt was $86.8 million versus $242.8 million a year ago, mainly on sale-leaseback proceeds partly offset by capital returns. We returned about $29.6 million to shareholders, including $25.8 million in buybacks and $3.8 million in dividends, with roughly $157 million remaining authorized for repurchases. Q: What is the fiscal 2027 full-year outlook?A: Haji Glover, CFO: We are affirming our fiscal 2027 outlook for revenue growth of approximately 2% to 4% and adjusted EBITDA of approximately $135 million to $145 million, representing growth versus fiscal 2026 on a comparable basis reflecting the full-year impact of the sale-leaseback transactions in both periods. We expect year-over-year revenue growth to begin in the second quarter and continue through the For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Investing.com -- Scholastic Corporation (NASDAQ:SCHL) reported first quarter results that fell short of analyst expectations, sending shares 12.1% lower in after hours trading on Thursday following the announcement. The stock closed 1.41% lower in the regular session. Still guessing which names to buy? Our AI rebuilds its stock picks at the start of every month. The list is beating the market by 120%. See what's on it » The children's publishing and education company posted an adjusted loss of $3.63 per share for the quarter ended August 31, 2026, missing the analyst consensus of a $3.40 loss. Revenue declined 4% to $216.8 million, below the $230.61 million estimate and down from $225.6 million in the prior year period. The revenue decrease primarily reflected lower sales in Education and Children's Book Publishing and Distribution, along with the elimination of rental income following sale-leaseback transactions completed in December 2025. Despite the miss, Scholastic affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA of $135 million to $145 million. The company also maintained its Free Cash Flow guidance of $35 million to $40 million. Should you buy NVIDIA right now? Before you decide, consider this: an AI-powered list of stock picks is outperforming the market by 120%, and it updates at the start of every month. See this month's picks » Education revenues fell 24% to $30.4 million, reflecting continued pressure on school and district budgets for supplemental curriculum materials. Children's Book Publishing and Distribution revenues decreased $3.6 million to $105.8 million, while Entertainment revenues increased 48% to $20.1 million on higher production activity. International revenues rose 2% to $60.5 million. "Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season," said Peter Warwick, President and Chief Executive Officer. Adjusted EBITDA was a loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. On a comparable basis reflecting the full-period impact of sale-leaseback transactions, Adjusted EBITDA improved $0.6 million. The company returned $29.6 million to shareholders during the quarter through share repurchases of $25.8 million and dividends of $3.8 million. Looking for the next multi-bagger? This AI enabler is up 90%+ since picked by our AI models in July -- and still has a 62% upside » Original Article Scholastic stock plunges 12% on worse-than-expected Q1 results BlackBerry shares gain premarket as Q2 results, guidance beat estimates Darden Restaurants falls as Q1 revenue misses expectations

- Interested in Scholastic Corporation? Here are five stocks we like better. - Scholastic's fiscal 2027 first-quarter revenue fell 4% to $216.8 million, while its adjusted operating loss widened to $88.7 million amid higher overhead and continued pressure in Education. - Management cited early strength in fall book fairs and a strong publishing slate featuring Harry Potter, Dog Man and Hunger Games-related releases as key drivers for the upcoming selling periods. - Despite quarterly cash use and a $86.8 million net debt balance, Scholastic reaffirmed full-year guidance for 2%–4% revenue growth, $135 million–$145 million in adjusted EBITDA and $35 million–$40 million in free cash flow. Scholastic (NASDAQ:SCHL) reported a wider adjusted operating loss in its seasonally slow fiscal 2027 first quarter, while reaffirming its full-year outlook as it enters the back-to-school and holiday selling periods with new releases from major franchises and early strength in book fairs. Revenue declined 4% to $216.8 million from $225.6 million a year earlier. The company recorded an operating loss of $92.2 million, in line with the prior-year period. Adjusted operating loss was $88.7 million, compared with $81.9 million a year earlier, reflecting higher overhead costs that were partly offset by improved results in Entertainment and International. → Microsoft's 8% Dividend Hike: Confidence Signal or Distraction From Capex Math? Chief Financial Officer Haji Glover said that, after adjusting the prior-year period for the full-period effects of the company's sale-leaseback transactions, the year-over-year increase in adjusted operating loss was $2 million. Adjusted EBITDA was a loss of $63.6 million, versus a loss of $55.7 million a year earlier; on the company's comparable basis, adjusted EBITDA improved by $0.6 million. Net loss was $71.2 million, or $3.77 per diluted share, compared with a $71.1 million loss, or $2.83 per diluted share, in the prior-year quarter. Adjusted net loss was $68.6 million, or $3.63 per diluted share, compared with $63.3 million, or $2.52 per diluted share, a year earlier. Glover said the per-share loss also reflected fewer shares outstanding following repurchase activity in fiscal 2026. → Paramount Skydance Clears a Major Warner Bros. Discovery Hurdle—Here's What Comes Next President and Chief Executive Officer Peter Warwick said the first quarter is typically the company's smallest revenue period because schools are largely out of session and school-based book and education sales are limited. He said the company is now positioned for an "important and promising" second quarter. Children's book publishing and distribution revenue declined to $105.8 million from $109.4 million. Book fair revenue was $33.2 million, compared with $34.1 million, primarily due to timing-related effects, while book club revenue increased to $2.1 million from $1.8 million. → Is the Fed Playing Chess With Rates—Or Just Behind the Curve Again? Warwick said early fall book-fair indicators were strong, with bookings and fair count ahead of the prior year. The company also cited traction among Christian schools and through other extended fair formats as it seeks to reach new school communities. During the question-and-answer session, Warwick said the number of larger-school fairs had increased and that both returning schools and new locations were contributing to the fair count. Consolidated trade revenue fell $3 million to $70.5 million, largely because international co-edition sales recorded in the prior year did not recur. U.S. trade revenue, however, rose 4%, supported by Dav Pilkey titles. The company highlighted a second-quarter schedule that includes an illustrated edition of Harry Potter and the Half-Blood Prince, a new Dog Man title in November, and publishing activity tied to the forthcoming The Hunger Games: Sunrise on the Reaping film adaptation. Warwick said Scholastic is also running a Harry Potter publishing and marketing campaign ahead of a new HBO series planned to premiere around Christmas. Entertainment revenue increased to $20.1 million from $13.6 million, driven by higher production revenue. The segment's adjusted operating loss narrowed to $1.6 million from $4 million. Glover said the segment's margin profile reflects operating leverage and business mix, as well as fixed depreciation associated with the Self acquisition. The company said production activity and its pipeline of greenlit and contracted projects remained strong. Education revenue declined to $30.4 million from $40.1 million, as school and district spending on curriculum and supplemental materials remained pressured. Glover cited higher staffing and fixed costs, expanding unfunded mandates and the end of ESSER funding in March. The segment's adjusted operating loss widened to $23.3 million from $21.2 million, though the company said cost-structure improvements substantially offset the revenue decline. Scholastic said it is restructuring Education's products and operations, diversifying its customer base and pursuing a go-to-market transformation intended to improve sales productivity. It expects Education revenue trends to improve later in the year, particularly in the second half, based on key opportunity timing and subscription revenue recognition. International revenue rose to $60.5 million from $59.4 million. Excluding a $1.2 million favorable foreign-exchange effect, revenue was approximately flat. Adjusted operating loss improved to $2.7 million from $4.1 million, aided by cost management and operating efficiencies. The company expects international revenue growth for the full year, supported by publishing and franchise activity, although operating income is expected to be modestly lower due in part to inflation and higher fuel and freight costs in certain markets. Glover said those costs had already been anticipated in the company's forecast and were incorporated into its reaffirmed guidance. Scholastic used $94.6 million in operating cash flow during the quarter and reported free cash use of $110.8 million. Net debt at quarter-end was $86.8 million, down from $242.8 million a year earlier. The company returned about $29.6 million to shareholders during the quarter, including $25.8 million of share repurchases and $3.8 million in dividends. Approximately $157 million remained authorized for future repurchases as of Aug. 31. Management reaffirmed fiscal 2027 guidance for revenue growth of approximately 2% to 4%, adjusted EBITDA of approximately $135 million to $145 million, and free cash flow of approximately $35 million to $40 million. Scholastic expects year-over-year revenue growth to begin in the second quarter and continue through the remainder of the fiscal year. Scholastic Corporation is a global children's publishing, education and media company. Founded in 1920 by M. R. Robinson, the company develops and distributes books, classroom materials, digital learning resources and educational media for children, families, teachers and schools. Its publishing portfolio includes original and licensed children's books, series and educational titles, while its education business provides classroom magazines, supplemental curriculum materials, professional learning resources and digital platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Scholastic Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Company Affirms Fiscal 2027 Guidance NEW YORK, Sept. 24, 2026 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal first quarter ended August 31, 2026. Peter Warwick, President and Chief Executive Officer, said, "Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season. As we indicated in July, our operating loss for the quarter included the full-period impact of the sale-leaseback transactions. During the quarter, we also sustained investments to support our growth priorities in the quarters ahead. "In Children's Books, we begin the second quarter with positive momentum, with Book Fair bookings ahead of prior year and a publishing and franchise schedule that positions us well for the year ahead, both domestically and internationally. During the first quarter, Entertainment's production activity and pipeline continued to grow strongly, as we expanded capabilities to extend Scholastic IP across formats and platforms. In Education, though increased pressure on school and district budgets impacted sales, we continued to make progress aligning the cost structure and advancing the business's transformation to support improved performance and long-term growth. "Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders." Outlook The Company affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables) of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods. The Company also continues to expect Free Cash Flow (a non-GAAP financial measure, explained in the accompanying tables) of approximately $35 million to $40 million. Fiscal 2027 Q1 Review In $ millions (except per share data) | First Quarter | | Change | Fiscal 2027 | | Fiscal 2026 | | $ | % Revenues | $ | 216.8 | | $ | 225.6 | | $ | (8.8) | (4) % | | | | | | | | | Operating income (loss) | $ | (92.2) | | $ | (92.2) | | $ | — | — % Earnings (loss) before income taxes | $ | (93.7) | | $ | (97.0) | | $ | 3.3 | 3 % Diluted earnings (loss) per share | $ | (3.77) | | $ | (2.83) | | $ | (0.94) | (33) % | | | | | | | | | Adjusted operating income (loss)* | $ | (88.7) | | $ | (81.9) | | $ | (6.8) | (8) % Adjusted diluted earnings (loss) per share* | $ | (3.63) | | $ | (2.52) | | $ | (1.11) | (44) % | | | | | | | | | Adjusted EBITDA* | $ | (63.6) | | $ | (55.7) | | $ | (7.9) | (14) % | | | | | | | | | Pro forma adjusted operating income (loss)* (1) | $ | (88.7) | | $ | (86.7) | | $ | (2.0) | (2) % Pro forma adjusted EBITDA* (1) | $ | (63.6) | | $ | (64.2) | | $ | 0.6 | 1 % * Excludes one-time items. Please refer to the non-GAAP financial tables attached. (1) | Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental impact to first-quarter fiscal 2026 adjusted operating income (loss) and Adjusted EBITDA was $4.8 and $8.5, respectively. The Company refers to these measures in this release as results "on a comparable basis." See Table 7 for the reconciliations to Adjusted operating income (loss) and Adjusted EBITDA. Revenues decreased 4% to $216.8 million, primarily reflecting lower revenues in Education and Children's Book Publishing and Distribution and the elimination of rental income, recorded in Overhead, following the sale-leaseback transactions in December 2025, partly offset by higher Entertainment revenues. Operating loss was $92.2 million in the quarter, approximately in line with the prior year period, including one-time charges of $3.5 million and $10.3 million in each period, respectively. Excluding one-time charges in both periods, adjusted operating loss (a non-GAAP measure) increased $6.8 million to $88.7 million. On a comparable basis, after reflecting the full-period impact of the sale-leaseback transactions in the prior year period, adjusted operating loss increased $2.0 million from $86.7 million in the prior-year period. Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) was a loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. On the same comparable basis, Adjusted EBITDA improved $0.6 million to a loss of $63.6 million from a loss of $64.2 million in the prior year period, as improved results in Entertainment and International more than offset higher Overhead costs. Quarterly Results Children's Book Publishing and Distribution In the fiscal first quarter, the Children's Book Publishing and Distribution segment's revenues decreased $3.6 million to $105.8 million. In School Reading Events, activity is minimal during the first quarter due to the seasonality of the business. Book Fairs revenues were $33.2 million, down $0.9 million from $34.1 million in the prior year period. Book Clubs revenues were $2.1 million, up $0.3 million compared to $1.8 million in the prior year period. Consolidated Trade revenues decreased $3.0 million to $70.5 million, primarily reflecting higher international co-edition sales in the prior year period that did not recur in the quarter. Segment operating loss was $38.2 million, which included one-time charges of $0.4 million, compared to an operating loss of $35.1 million in the prior year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted operating loss increased $3.5 million to $37.8 million. On a comparable basis, adjusted operating loss increased $0.6 million. Education Education revenues decreased $9.7 million to $30.4 million during the segment's seasonally smallest quarter, reflecting continued pressure on school and district funding and spending on supplemental curriculum materials. Segment operating loss was $23.3 million, compared to $21.2 million in the prior year period. On a comparable basis, adjusted operating loss increased $1.3 million, primarily reflecting lower revenues, partly offset by benefits from the segment's improved cost structure. Entertainment Entertainment revenues increased $6.5 million to $20.1 million, primarily reflecting higher production revenues. Segment operating loss was $1.8 million, which included one-time charges of $0.2 million, compared to a loss of $4.0 million in the prior year period. Excluding one-time charges, adjusted operating loss improved $2.4 million to $1.6 million, primarily reflecting higher revenues. International International revenues increased $1.1 million to $60.5 million. Excluding favorable foreign currency exchange of $1.2 million, revenues were approximately in line with the prior-year period. Segment operating loss was $2.9 million, which included one-time charges of $0.2 million, compared to an operating loss of $4.2 million in the prior year period, which included one-time charges of $0.1 million. Excluding one-time charges, adjusted operating loss improved by $1.4 million to $2.7 million, primarily reflecting cost management and operational efficiencies. Overhead Overhead costs were $26.0 million, which included one-time charges of $2.7 million, compared to $27.7 million in the prior year period, which included one-time charges of $9.4 million. Excluding one-time charges, adjusted overhead costs (a non-GAAP measure) increased $5.0 million to $23.3 million. On a comparable basis, adjusted overhead costs increased $3.9 million, primarily reflecting higher costs related to corporate initiatives and the timing of employee-related expenses. Capital Position and Liquidity In $ millions | First Quarter | | Change | Fiscal 2027 | | Fiscal 2026 | | $ | % Net cash (used) provided by operating activities | $ | (94.6) | | $ | (81.8) | | $ | (12.8) | (16) % Additions to property, plant and equipment and prepublication expenditures | | (18.1) | | | (14.9) | | | (3.2) | (21) % Net borrowings (repayments) of film related obligations | | 1.9 | | | (3.5) | | | 5.4 | NM Free cash flow (use)* | $ | (110.8) | | $ | (100.2) | | $ | (10.6) | (11) % | | | | | | | | | Net cash (debt)* | $ | (86.8) | | $ | (242.8) | | $ | 156.0 | 64 % NM - Not meaningful | | | | | | | | | * Please refer to the non-GAAP financial tables attached Net cash used in operating activities was $94.6 million, compared to $81.8 million in the prior year period, primarily reflecting higher working capital requirements, as well as higher rent expense and loss of rental income related to the sale-leaseback transactions. Free cash use (a non-GAAP measure of operations explained in the accompanying tables) was $110.8 million in fiscal 2027, compared to free cash use of $100.2 million in the prior period, reflecting increased net cash used by operating activities and higher capital expenditures, partly offset by net borrowings of film-related obligations. Net debt (a non-GAAP measure explained in the accompanying tables) was $86.8 million compared to net debt of $242.8 million in the prior year period, primarily reflecting net proceeds from the Company's sale-leaseback transactions completed in December 2025, partly offset by capital returns to shareholders. In the first quarter, the Company returned approximately $29.6 million to shareholders through share repurchases and dividends. This included the repurchase of 630,850 shares of common stock for $25.8 million and $3.8 million of dividends. At August 31, 2026, $157.4 million remained authorized for future repurchases under the Company's stock repurchase program. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions. Additional Information To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, "Adjusted EBITDA", "Adjusted Operating Income (Loss)", "Free Cash Flow (Use)" and "Net Cash (Debt)". Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP. The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA or Free Cash Flow to the most directly comparable GAAP financial measures, operating income and net cash provided by operating activities, respectively, without unreasonable effort. This is due to the uncertainty and inherent difficulty in predicting the occurrence and financial impact of items that would be excluded from or required to calculate such GAAP measures, including future severance charges, asset impairments, gains or losses on sales of assets and other non-recurring items. These items are uncertain, depend on various factors outside the Company's control and could be material to the Company's results computed in accordance with GAAP. Conference Call The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, September 24, 2026. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company's Chief Financial Officer and Executive Vice President, will moderate the call. A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/vfm3zrk4. To access the conference call by phone, please go to https://register-conf.media-server.com/register/BI6cab45efce9f470c84e69fe7dc11c385, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com. About Scholastic For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been meeting children where they are – at school, at home and in their communities – by creating quality content and experiences, all beginning with literacy. Scholastic delivers stories, characters, and learning moments that empower all kids to become lifelong readers and learners through bestselling children's books, literacy- and knowledge-building resources for schools including classroom magazines, and award-winning, entertaining children's media. As the world's largest publisher and distributor of children's books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com. Forward-Looking Statements This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children's book and educational materials markets generally and acceptance of the Company's products within those markets, and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated. SCHL: Financial Table 1 Scholastic Corporation Consolidated Statements of Operations (Unaudited) (In $ Millions, except shares and per share data) | Three months ended | 08/31/26 | 08/31/25 Revenues | $ | 216.8 | $ | 225.6 Operating costs and expenses: | | | | Cost of goods sold | | 118.1 | | 123.5 Selling, general and administrative expense | | 178.3 | | 177.2 Depreciation and amortization | | 12.6 | | 16.3 Asset impairments and write downs | | — | | 0.8 Total operating costs and expenses | | 309.0 | | 317.8 Operating income (loss) | | (92.2) | | (92.2) Interest income (expense), net | | (1.6) | | (4.5) Other components of net periodic benefit (cost) | | 0.1 | | (0.3) Earnings (loss) before income taxes | | (93.7) | | (97.0) Provision (benefit) for income taxes | | (22.5) | | (25.9) Net income (loss) | | (71.2) | | (71.1) Basic and diluted earnings (loss) per share of Class A and Common Stock (1) | | | | Basic | $ | (3.77) | $ | (2.83) Diluted | $ | (3.77) | $ | (2.83) Basic weighted average shares outstanding | | 18,862 | | 25,161 Diluted weighted average shares outstanding | | 19,589 | | 25,410 (1) | Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based on numbers rounded to millions may not yield the results as presented. Table 2 Scholastic Corporation Segment Results, Excluding One-Time Items (Unaudited) (In $ Millions) | Three months ended | Change | 08/31/26 | 08/31/25 | $ | % Children's Book Publishing and Distribution | | | Revenues | | | | | | | Book Clubs | $ | 2.1 | $ | 1.8 | $ | 0.3 | 17 % Book Fairs | | 33.2 | | 34.1 | | (0.9) | (3) % School Reading Events | | 35.3 | | 35.9 | | (0.6) | (2) % Consolidated Trade | | 70.5 | | 73.5 | | (3.0) | (4) % Total Revenues | | 105.8 | | 109.4 | | (3.6) | (3) % Adjusted operating income (loss)* | | (37.8) | | (34.3) | | (3.5) | (10) % Adjusted operating margin* | | NM | | NM | | | | | | | | | | Education | | | | | | | Revenues | | 30.4 | | 40.1 | | (9.7) | (24) % Adjusted operating income (loss)* | | (23.3) | | (21.2) | | (2.1) | (10) % Adjusted operating margin* | | NM | | NM | | | | | | | | | | Entertainment | | | | | | | Revenues | | 20.1 | | 13.6 | | 6.5 | 48 % Adjusted operating income (loss)* | | (1.6) | | (4.0) | | 2.4 | 60 % Adjusted operating margin* | | NM | | NM | | | | | | | | | | International | | | | | | | Revenues | | 60.5 | | 59.4 | | 1.1 | 2 % Adjusted operating income (loss)* | | (2.7) | | (4.1) | | 1.4 | 34 % Adjusted operating margin* | | NM | | NM | | | | | | | | | | Overhead | | | | | | | Revenues | | — | | 3.1 | | (3.1) | (100) % Adjusted operating income (loss)* | | (23.3) | | (18.3) | | (5.0) | (27) % | | | | | | | Adjusted operating income (loss)* | $ | (88.7) | $ | (81.9) | $ | (6.8) | (8) % Adjusted operating margin* | | NM | | NM | | | NM - Not meaningful * Excludes one-time items. Please refer to Table 4 for one-time items and a reconciliation of the non-GAAP financials and Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. Table 3 Scholastic Corporation Supplemental Information (Unaudited) (In $ Millions) Selected Balance Sheet Items | 08/31/26 | 08/31/25 Cash and cash equivalents | $ | 106.8 | $ | 94.3 Accounts receivable, net | | 186.6 | | 187.0 Inventories, net | | 315.3 | | 322.2 Accounts payable | | 150.2 | | 175.8 Deferred revenue | | 171.6 | | 181.0 Accrued royalties | | 68.0 | | 86.6 Film related obligations | | 19.3 | | 14.7 Lines of credit and long-term debt | | 184.8 | | 331.2 Net cash (debt) (1) | | (86.8) | | (242.8) Total stockholders' equity | | 656.5 | | 878.0 | | | | Selected Cash Flow Items | Three months ended | 08/31/26 | 08/31/25 Net cash provided by (used in) operating activities | $ | (94.6) | $ | (81.8) Property, plant and equipment additions | | (14.1) | | (10.0) Prepublication expenditures | | (4.0) | | (4.9) Net borrowings (repayments) of film related obligations | | 1.9 | | (3.5) Free cash flow (use) (2) | $ | (110.8) | $ | (100.2) (1) | Net cash (debt) is defined by the Company as cash and cash equivalents less production cash of $8.8 and $5.9 as of August 31, 2026 and August 31, 2025, respectively, net of lines of credit and short-term and long-term-debt. Film related obligations are not included. The Company utilizes this non- GAAP financial measure, and believes it is useful to investors, as an indicator of the Company's effective leverage and financing needs. (2) | Free cash flow (use) is defined by the Company as net cash provided by or used in operating activities (which includes royalty advances) and cash acquired through acquisitions and from the sale of assets, reduced by spending on property, plant and equipment and prepublication costs and adjusted for net cash flows from film related obligations. The Company believes that this non-GAAP financial measure is useful to investors as an indicator of cash flow available for debt repayment and other investing activities, such as acquisitions. The Company utilizes free cash flow as a further indicator of operating performance and for planning investing activities. Table 4 Scholastic Corporation Supplemental Results - Excluding One-Time Items (Unaudited) (In $ Millions, except per share data) | Three months ended | 08/31/2026 | | 08/31/2025 | Reported | | One-time items | | Adjusted | | Reported | | One-time items | | Adjusted Diluted earnings (loss) per share (1) | $ | (3.77) | | $ | 0.14 | | $ | (3.63) | | $ | (2.83) | | $ | 0.31 | | $ | (2.52) Net income (loss) (2) | $ | (71.2) | | $ | 2.6 | | $ | (68.6) | | $ | (71.1) | | $ | 7.8 | | $ | (63.3) Earnings (loss) before income taxes | $ | (93.7) | | $ | 3.5 | | $ | (90.2) | | $ | (97.0) | | $ | 10.3 | | $ | (86.7) | | | | | | | | | | | | | | | | | Children's Book Publishing and Distribution (3) | $ | (38.2) | | $ | 0.4 | | $ | (37.8) | | $ | (35.1) | | $ | 0.8 | | $ | (34.3) Education | | (23.3) | | | — | | | (23.3) | | | (21.2) | | | — | | | (21.2) Entertainment (4) | | (1.8) | | | 0.2 | | | (1.6) | | | (4.0) | | | 0.0 | | | (4.0) International (5) | | (2.9) | | | 0.2 | | | (2.7) | | | (4.2) | | | 0.1 | | | (4.1) Overhead (6) | | (26.0) | | | 2.7 | | | (23.3) | | | (27.7) | | | 9.4 | | | (18.3) Operating income (loss) * | $ | (92.2) | | $ | 3.5 | | $ | (88.7) | | $ | (92.2) | | $ | 10.3 | | $ | (81.9) * Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. (1) | Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based on rounded numbers may not yield the results as presented. (2) | In the three months ended August 31, 2026 and August 31, 2025, the Company recognized a benefit of $0.9 and $2.5, respectively, for income taxes in respect to one-time pretax items. (3) | In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax asset impairment of $0.8 related to a certain product. (4) | In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.2. In the three months ended August 31, 2025, the Company recognized pretax costs of less than $0.1 related to the acquisition of 9 Story Media Group. (5) | In the three months ended August 31, 2026 and August 31, 2025, the Company recognized pretax severance of $0.2 and $0.1, respectively, related to cost-savings initiatives. (6) | In the three months ended August 31, 2026, the Company recognized pretax severance of $2.3 related to cost-savings initiatives and other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax severance of $8.7, related to cost-savings initiatives and other pretax expenses of $0.7. Table 5 Scholastic Corporation Consolidated Statements of Operations - Supplemental Adjusted EBITDA (Unaudited) (In $ Millions) | Three months ended | | 08/31/26 | | 08/31/25 | Earnings (loss) before income taxes as reported | $ | (93.7) | | $ | (97.0) | One-time items before income taxes | | 3.5 | | | 10.3 | Earnings (loss) before income taxes excluding one-time items | | (90.2) | | | (86.7) | Interest (income) expense (1) | | 1.6 | | | 4.5 | Depreciation and amortization | | 25.0 | | | 26.5 | Adjusted EBITDA (2) | $ | (63.6) | | $ | (55.7) | (1) | Amounts include production loan interest amortized into cost of goods sold. (2) | Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items, before interest, taxes, depreciation and amortization. The Company believes that Adjusted EBITDA is a meaningful measure of operating profitability and useful for measuring returns on capital investments over time as it is not distorted by unusual gains, losses, or other items. Table 6 Scholastic Corporation Consolidated Statements of Operations - Supplemental Adjusted EBITDA by Segment (Unaudited) (In $ Millions) | Three months ended | 08/31/26 | CBPD (1) | EDUC (1) | ENT (1) | INTL (1) | OVH (1) | | Total Earnings (loss) before income taxes as reported | $ | (38.3) | $ | (23.3) | $ | (2.1) | $ | (3.0) | $ | (27.0) | | $ | (93.7) One-time items before income taxes | | 0.4 | | — | | 0.2 | | 0.2 | | 2.7 | | | 3.5 Earnings (loss) before income taxes excluding one-time items | | (37.9) | | (23.3) | | (1.9) | | (2.8) | | (24.3) | | | (90.2) Interest (income) expense (2) | | 0.1 | | 0.0 | | 0.2 | | 0.0 | | 1.3 | | | 1.6 Depreciation and amortization (3) | | 8.0 | | 5.3 | | 7.4 | | 2.1 | | 2.2 | | | 25.0 Adjusted EBITDA* | $ | (29.8) | $ | (18.0) | $ | 5.7 | $ | (0.7) | $ | (20.8) | | $ | (63.6) | Three months ended | 08/31/25 | CBPD (1) | EDUC (1) | ENT (1) | INTL (1) | OVH (1) | | Total Earnings (loss) before income taxes as reported | $ | (35.1) | $ | (21.2) | $ | (4.5) | $ | (4.7) | $ | (31.5) | | $ | (97.0) One-time items before income taxes | | 0.8 | | — | | 0.0 | | 0.1 | | 9.4 | | | 10.3 Earnings (loss) before income taxes excluding one-time items | | (34.3) | | (21.2) | | (4.5) | | (4.6) | | (22.1) | | | (86.7) Interest (income) expense (2) | | 0.0 | | 0.0 | | 0.5 | | (0.0) | | 4.0 | | | 4.5 Depreciation and amortization (3) | | 7.6 | | 6.1 | | 4.8 | | 1.9 | | 6.1 | | | 26.5 Adjusted EBITDA* | $ | (26.7) | $ | (15.1) | $ | 0.8 | $ | (2.7) | $ | (12.0) | | $ | (55.7) * Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions. (1) | The Company's segments are defined as the following: CBPD - Children's Book Publishing and Distribution segment; EDUC - Education segment; ENT - Entertainment segment; INTL - International segment; OVH - unallocated overhead. (2) | Amounts include production loan interest amortized into cost of goods sold. (3) | Depreciation and amortization in the Children's Book Publishing and Distribution, Education and International segments includes amounts allocated from overhead. Table 7 | | | Scholastic Corporation Supplemental Information (Unaudited) (In $ Millions) | | | | Three months ended | Three months ended | Variance on a comparable basis | 08/31/2026 | 08/31/2025 | Adjusted operating income (loss) | Adjusted operating income (loss) | Incremental sale- leaseback impact | Pro forma adjusted operating income (loss) (1) | | $ | % Children's Book Publishing and Distribution | $ | (37.8) | $ | (34.3) | $ | (2.9) | $ | (37.2) | $ | (0.6) | (2) % Education | | (23.3) | | (21.2) | | (0.8) | | (22.0) | | (1.3) | (6) % Entertainment | | (1.6) | | (4.0) | | (0.0) | | (4.0) | | 2.4 | 60 % International | | (2.7) | | (4.1) | | — | | (4.1) | | 1.4 | 34 % Overhead | | (23.3) | | (18.3) | | (1.1) | | (19.4) | | (3.9) | (20) % Total | $ | (88.7) | $ | (81.9) | $ | (4.8) | $ | (86.7) | $ | (2.0) | (2) % | Three months ended | Three months ended | Variance on a comparable basis | 08/31/2026 | 08/31/2025 | Adjusted EBITDA | Adjusted EBITDA | Incremental sale- leaseback impact (2) | Pro forma adjusted EBITDA (1) | | $ | % Children's Book Publishing and Distribution | $ | (29.8) | $ | (26.7) | $ | (3.5) | $ | (30.2) | $ | 0.4 | 1 % Education | | (18.0) | | (15.1) | | (1.5) | | (16.6) | | (1.4) | (8) % Entertainment | | 5.7 | | 0.8 | | (0.1) | | 0.7 | | 5.0 | NM International | | (0.7) | | (2.7) | | — | | (2.7) | | 2.0 | 74 % Overhead | | (20.8) | | (12.0) | | (3.4) | | (15.4) | | (5.4) | (35) % Total | $ | (63.6) | $ | (55.7) | $ | (8.5) | $ | (64.2) | $ | 0.6 | 1 % NM - Not meaningful (1) | Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental adjustments shown above reflect the impact to the first quarter of fiscal 2026 prior to completion of the transactions. (2) | The $8.5 incremental impact to Pro forma adjusted EBITDA includes the $4.8 impact to Pro forma adjusted operating income (loss) plus a $3.7 depreciation adjustment. View original content to download multimedia:https://www.prnewswire.com/news-releases/scholastic-reports-fiscal-2027-first-quarter-results-302889707.html

Educational publishing and media company Scholastic (NASDAQ:SCHL) fell short of the market's revenue expectations in Q3 CY2026, with sales falling 3.9% year on year to $216.8 million. Its non-GAAP loss of $3.63 per share was 6.1% below analysts' consensus estimates. Is now the time to buy Scholastic? Find out in our full research report. - Revenue: $216.8 million vs analyst estimates of $224.7 million (3.9% year-on-year decline, 3.5% miss) - Adjusted EPS: -$3.63 vs analyst expectations of -$3.42 (6.1% miss) - Adjusted EBITDA: -$63.6 million (-29.3% margin, 14.2% year-on-year decline) - EBITDA guidance for the full year is $140 million at the midpoint, in line with analyst expectations - Operating Margin: -42.5%, down from -37.3% in the same quarter last year - Free Cash Flow was -$110.8 million compared to -$100.2 million in the same quarter last year - Market Capitalization: $667 million "Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders." Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ:SCHL) is an international company specializing in children's publishing, education, and media services. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Scholastic grew its sales at a weak 3.2% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Scholastic's recent performance shows its demand has slowed as its revenue was flat over the last two years. This quarter, Scholastic missed Wall Street's estimates and reported a rather uninspiring 3.9% year-on-year revenue decline, generating $216.8 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 4.1% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below average for the sector. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you're unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Scholastic's operating margin has been trending up over the last 12 months and averaged 2% over the last two years. The company's higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business. In Q3, Scholastic generated an operating margin profit margin of negative 42.5%, down 5.2 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Scholastic has shown poor cash profitability relative to peers over the last two years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 13.3%, below what we'd expect for a consumer discretionary business. Scholastic burned through $110.8 million of cash in Q3, equivalent to a negative 51.1% margin. The company's cash burn was similar to its $100.2 million of lost cash in the same quarter last year. These numbers deviate from its longer-term margin, indicating it is a seasonal business that must build up inventory during certain quarters. It was encouraging to see Scholastic beat analysts' EBITDA expectations this quarter. On the other hand, its revenue missed and its EPS fell short of Wall Street's estimates. Overall, this was a softer quarter. The stock traded down 10% to $31.40 immediately after reporting. Scholastic's earnings report left more to be desired. Let's look forward to see if this quarter has created an opportunity to buy the stock. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

Wall Street analysts expect Scholastic (SCHL) to post quarterly loss of -$3.42 per share in its upcoming report, which indicates a year-over-year decline of 35.7%. Revenues are expected to be $224.69 million, down 0.4% from the year-ago quarter. The consensus EPS estimate for the quarter has undergone an upward revision of 0.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe. Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock. While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight. With that in mind, let's delve into the average projections of some Scholastic metrics that are commonly tracked and projected by analysts on Wall Street. The consensus estimate for 'Revenues- Entertainment' stands at $15.65 million. The estimate indicates a change of +15.1% from the prior-year quarter. The consensus among analysts is that 'Revenues- Education Solutions' will reach $37.30 million. The estimate points to a change of -7% from the year-ago quarter. The collective assessment of analysts points to an estimated 'Revenues- International' of $60.00 million. The estimate suggests a change of +1% year over year. The combined assessment of analysts suggests that 'Revenues- Children?s Book Publishing and Distribution' will likely reach $111.74 million. The estimate points to a change of +2.1% from the year-ago quarter. View all Key Company Metrics for Scholastic here>>> Shares of Scholastic have demonstrated returns of -13.4% over the past month compared to the Zacks S&P 500 composite's -1.3% change. With a Zacks Rank #5 (Strong Sell), SCHL is expected to lag the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> . Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Scholastic Corporation (SCHL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research