Scholastic Q1 Earnings Call Highlights

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.

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.

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. 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 a...