1. Scholastic returned over $35 million to shareholders via dividends and buybacks. 2. Adjusted EBITDA forecasted at low end of $140 million for fiscal 2025. 3. Children's Publishing segment revenue grew 5%, while Education Solutions fell 16%. 4. 9 Story Media Group acquisition contributes positively to results despite challenges. 5. Strong performance of new titles, including the latest Hunger Games book.
While revenues show growth, challenges in education solutions may offset gains.
Moderate importance due to mixed financial results and strategic decisions affecting future growth.
Immediate pressures from budget constraints could impact performance in the upcoming fiscal quarter.
NEW YORK, March 20, 2025 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal third quarter ended February 28, 2025.
Peter Warwick, President and Chief Executive Officer, said, "Scholastic achieved modest revenue growth and improved operating results in the third quarter. Despite increasing pressure on family and school spending on books and educational materials, strong performance by School Book Fairs and Clubs, successful new titles and the addition of 9 Story Media Group contributed to positive results, underscoring Scholastic's unique strengths engaging kids with great books and quality children's media."
"Scholastic's winning record creating global children's franchises continued last quarter. Dog Man: Big Jim Begins, the thirteenth book in Dav Pilkey's global phenomenon, has been the top-selling book in the US and major English-speaking markets since its release in early December. Earlier this week Scholastic published the fifth book in Suzanne Collins' bestselling Hunger Games® series, Sunrise on the Reaping, which is already topping some bestseller lists based on pre-orders. Last quarter Scholastic Entertainment also leveraged its new capabilities to greatly expand the distribution and monetization of the Company's IP on YouTube, the dominant platform for kids' media consumption. In February alone Scholastic's branded channels drew almost 10 million views, up nearly 40 times from a year ago."
"The Education Solutions division was impacted by the continued slow-down in the supplemental curriculum market in the third quarter, but we remain encouraged by upcoming product launches. We have also begun a strategic review of this important and valuable business, as we explore options to optimize it for long-term success."
"Based on the intensifying spending pressure that we experienced last quarter and expect to continue into the fourth quarter, we forecast full-year Adjusted EBITDA at the low end of our fiscal 2025 guidance and more modest revenue growth year-over-year. We have taken a number of one-time and ongoing cost actions in response to these headwinds, as previously disclosed, benefiting both the current and next fiscal years. As we continue to focus on Scholastic's long-term growth and profitability, we remain committed to our capital allocation priorities, expanding our share repurchase authorization to $100 million and after having returned over $35 million to shareholders through share repurchases and dividends last quarter."
For fiscal year 2025, the Company has narrowed its outlook for Adjusted EBITDA (as defined in the accompanying tables) to approximately $140 million, from $140 million to $150 million previously. The Company now forecasts modest full-year revenue growth, compared to prior guidance of 4% to 6% growth.
| In $ millions (except per share data) | Fiscal 2025 | Fiscal 2024 | Change | % |
|---|---|---|---|---|
| Revenues | $335.4 | $323.7 | $11.7 | 4% |
| Operating income (loss) | ($23.9) | ($34.9) | $11.0 | 32% |
| Earnings (loss) before taxes | ($28.4) | ($34.6) | $6.2 | 18% |
| Diluted earnings (loss) per share | ($0.13) | ($0.91) | $0.78 | 86% |
Revenues increased 4% to $335.4 million, reflecting the contribution of 9 Story Media Group, recorded in the Entertainment segment, and higher revenues in School Reading Events, partly offset by lower supplemental curriculum and collections product sales in Education Solutions.
Operating loss improved 32% to a loss of $23.9 million in the quarter compared to a loss of $34.9 million a year ago, including one-time charges in each period. Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) increased 183% to $6.0 million.
The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, March 20, 2025. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company's Chief Financial Officer, Executive Vice President, will moderate the call.
A live webcast of the call can be accessed at this link. To access the conference call by phone, please go to this link, which will provide dial-in details.
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.