Scholastic Stock Earnings Reports

Scholastic reported a seasonally weak first quarter (typical for summer months) with revenues down 5% to $225.6M and an operating loss in line with prior years. Trade publishing and book fairs showed strength (trade revenues up, book fair bookings ahead of last year) driven by strong franchises (notably Hunger Games, Harry Potter, Dog Man). Scholastic is integrating its publishing, fairs and clubs to drive operational efficiencies and is expanding its media strategy (YouTube, a new Scholastic-branded streaming app, and integration of 9 Story) to build high-margin digital revenue and cross-promote IP. Education revenue was pressured by timing and uncertainty in federal/state funding; management expects this business to be back-end loaded and is refocusing product and go-to-market efforts. International improved modestly and margins are being optimized. Cash use increased seasonally (net cash used by operations $81.8M; free cash used $100.2M) and net debt rose to $242.8M due to working capital; the company continues dividends and has $70M remaining on its buyback authorization. Management is progressing on potential sale-leaseback/monetization of its SoHo HQ and Jefferson City distribution center with significant investor interest and expects processes to conclude this fall. The company affirmed fiscal 2026 guidance: revenue growth 2–4%, adjusted EBITDA $160–170M, and full-year free cash flow $30–40M. Key near-term risks include education funding volatility and ~$10M of expected incremental tariff costs for the year.