Scholastic Q1 revenue misses estimates on education pressure, book publishing decline

Overview

• Children's publishing and education firm's fiscal Q1 revenue fell 4% yr/yr

• Adjusted loss per share widened yr/yr in fiscal Q1

• Company repurchased $25.8 mln in shares during the quarter

Outlook

• Scholastic affirms fiscal 2027 revenue growth guidance of approximately 2% to 4%

• Company expects fiscal 2027 Adjusted EBITDA of about $135 mln to $145 mln

• Scholastic continues to expect fiscal 2027 free cash flow of about $35 mln to $40 mln

Result Drivers

• EDUCATION PRESSURE - Co said lower Education revenues reflected continued pressure on school and district funding and spending on supplemental curriculum materials

• BOOK PUBLISHING DECLINE - Co said Children's Book Publishing and Distribution revenues fell due to lower Book Fairs and Trade sales, with prior-year international co-edition sales not recurring

• ENTERTAINMENT GROWTH - Co said Entertainment revenues rose due to higher production revenues

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the consumer publishing peer group is "buy."

• Wall Street's median 12-month price target for Scholastic Corporation is $42.00, about 18.8% above its September 23 closing price of $35.36

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)