NEW YORK - Scholastic (NASDAQ:SCHL) Corporation (NASDAQ: SCHL), a leading global children's publishing, education, and media company, reported its fiscal third-quarter results with both earnings and revenue falling short of Wall Street expectations.
The company posted an adjusted loss per share of -$0.80, which was $0.22 below the analyst estimate of -$0.58. Revenue for the quarter was $323.7 million, slightly missing the consensus estimate of $325.15 million.
Following the announcement, Scholastic's stock declined by 1.03% in after-hours trading, indicating a modest market reaction to the earnings and revenue miss.
In comparison to the same quarter last year, the company's revenues remained relatively stable, with a marginal decrease of $1.2 million from $324.9 million. Still, the company experienced a 26% increase in its operating loss, which rose to $34.9 million, and a 32% increase in its loss before taxes, which amounted to $34.6 million.
This was accompanied by a significant 60% drop in diluted earnings per share, from -$0.57 to -$0.91.
Peter Warwick, President and Chief Executive Officer of Scholastic, highlighted the company's success in children's book publishing and entertainment, noting the expansion of Scholastic's presence on bestseller lists with titles such as "Heroes: A Novel of Pearl Harbor" and the latest entries in popular graphic novel series.
He also expressed excitement about upcoming titles, including the next book in Dav Pilkey's Dog Man series.
Despite the challenges faced in the U.S. school market impacting the company's School Reading Events and Education divisions, Warwick remained optimistic about the future. Scholastic has affirmed its revised fiscal 2024 guidance and continues to focus on its long-term strategy, which includes investing in content and capabilities to drive growth.
Scholastic's consolidated trade revenues saw an increase of 7%, primarily due to strong sales of popular book series in the U.S., Canada, and the UK. The company also announced an agreement to invest in 9 Story Media Group, aiming to expand opportunities to build and monetize global children's intellectual properties.
In terms of capital returns, Scholastic returned over $60 million to shareholders through repurchases and regular dividends during the quarter, demonstrating confidence in the business's future.
The company's fiscal year-to-date review showed a 5% decrease in revenues to $1,114.8 million, largely due to retail market headwinds and strategic repositioning of the Book Clubs business. The operating loss for the year-to-date was $32.7 million, which included $10.6 million in one-time charges.
As Scholastic enters its most profitable quarter, the company's leadership remains committed to executing its strategy and providing value to its shareholders.
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