Scholastic Reports Fiscal 2027 First Quarter Results

Company Affirms Fiscal 2027 Guidance

NEW YORK, Sept. 24, 2026 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal first quarter ended August 31, 2026.

Peter Warwick, President and Chief Executive Officer, said, "Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season. As we indicated in July, our operating loss for the quarter included the full-period impact of the sale-leaseback transactions. During the quarter, we also sustained investments to support our growth priorities in the quarters ahead.

"In Children's Books, we begin the second quarter with positive momentum, with Book Fair bookings ahead of prior year and a publishing and franchise schedule that positions us well for the year ahead, both domestically and internationally. During the first quarter, Entertainment's production activity and pipeline continued to grow strongly, as we expanded capabilities to extend Scholastic IP across formats and platforms. In Education, though increased pressure on school and district budgets impacted sales, we continued to make progress aligning the cost structure and advancing the business's transformation to support improved performance and long-term growth. 

"Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders."

Outlook

The Company affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables) of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods.

The Company also continues to expect Free Cash Flow (a non-GAAP financial measure, explained in the accompanying tables) of approximately $35 million to $40 million.

Revenues decreased 4% to $216.8 million, primarily reflecting lower revenues in Education and Children's Book Publishing and Distribution and the elimination of rental income, recorded in Overhead, following the sale-leaseback transactions in December 2025, partly offset by higher Entertainment revenues.

Operating loss was $92.2 million in the quarter, approximately in line with the prior year period, including one-time charges of $3.5 million and $10.3 million in each period, respectively. Excluding one-time charges in both periods, adjusted operating loss (a non-GAAP measure) increased $6.8 million to $88.7 million. On a comparable basis, after reflecting the full-period impact of the sale-leaseback transactions in the prior year period, adjusted operating loss increased $2.0 million from $86.7 million in the prior-year period.

Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) was a loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. On the same comparable basis, Adjusted EBITDA improved $0.6 million to a loss of $63.6 million from a loss of $64.2 million in the prior year period, as improved results in Entertainment and International more than offset higher Overhead costs.

Quarterly Results

Children's Book Publishing and Distribution

In the fiscal first quarter, the Children's Book Publishing and Distribution segment's revenues decreased $3.6 million to $105.8 million.

In School Reading Events, activity is minimal during the first quarter due to the seasonality of the business. Book Fairs revenues were $33.2 million, down $0.9 million from $34.1 million in the prior year period. Book Clubs revenues were $2.1 million, up $0.3 million compared to $1.8 million in the prior year period.

Consolidated Trade revenues decreased $3.0 million to $70.5 million, primarily reflecting higher international co-edition sales in the prior year period that did not recur in the quarter.

Segment operating loss was $38.2 million, which included one-time charges of $0.4 million, compared to an operating loss of $35.1 million in the prior year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted operating loss increased $3.5 million to $37.8 million. On a comparable basis, adjusted operating loss increased $0.6 million.

Education

Education revenues decreased $9.7 million to $30.4 million during the segment's seasonally smallest quarter, reflecting continued pressure on school and district funding and spending on supplemental curriculum materials. Segment operating loss was $23.3 million, compared to $21.2 million in the prior year period. On a comparable basis, adjusted operating loss increased $1.3 million, primarily reflecting lower revenues, partly offset by benefits from the segment's improved cost structure.

Entertainment

Entertainment revenues increased $6.5 million to $20.1 million, primarily reflecting higher production revenues. Segment operating loss was $1.8 million, which included one-time charges of $0.2 million, compared to a loss of $4.0 million in the prior year period. Excluding one-time charges, adjusted operating loss improved $2.4 million to $1.6 million, primarily reflecting higher revenues.

International

International revenues increased $1.1 million to $60.5 million. Excluding favorable foreign currency exchange of $1.2 million, revenues were approximately in line with the prior-year period. Segment operating loss was $2.9 million, which included one-time charges of $0.2 million, compared to an operating loss of $4.2 million in the prior year period, which included one-time charges of $0.1 million. Excluding one-time charges, adjusted operating loss improved by $1.4 million to $2.7 million, primarily reflecting cost management and operational efficiencies.

Overhead

Overhead costs were $26.0 million, which included one-time charges of $2.7 million, compared to $27.7 million in the prior year period, which included one-time charges of $9.4 million. Excluding one-time charges, adjusted overhead costs (a non-GAAP measure) increased $5.0 million to $23.3 million.

On a comparable basis, adjusted overhead costs increased $3.9 million, primarily reflecting higher costs related to corporate initiatives and the timing of employee-related expenses.

Net cash used in operating activities was $94.6 million, compared to $81.8 million in the prior year period, primarily reflecting higher working capital requirements, as well as higher rent expense and loss of rental income related to the sale-leaseback transactions. Free cash use (a non-GAAP measure of operations explained in the accompanying tables) was $110.8 million in fiscal 2027, compared to free cash use of $100.2 million in the prior period, reflecting increased net cash used by operating activities and higher capital expenditures, partly offset by net borrowings of film-related obligations.

Net debt (a non-GAAP measure explained in the accompanying tables) was $86.8 million compared to net debt of $242.8 million in the prior year period, primarily reflecting net proceeds from the Company's sale-leaseback transactions completed in December 2025, partly offset by capital returns to shareholders.

In the first quarter, the Company returned approximately $29.6 million to shareholders through share repurchases and dividends. This included the repurchase of 630,850 shares of common stock for $25.8 million and $3.8 million of dividends.

At August 31, 2026, $157.4 million remained authorized for future repurchases under the Company's stock repurchase program. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions.

Additional Information

To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, "Adjusted EBITDA", "Adjusted Operating Income (Loss)", "Free Cash Flow (Use)" and "Net Cash (Debt)". Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA or Free Cash Flow to the most directly comparable GAAP financial measures, operating income and net cash provided by operating activities, respectively, without unreasonable effort. This is due to the uncertainty and inherent difficulty in predicting the occurrence and financial impact of items that would be excluded from or required to calculate such GAAP measures, including future severance charges, asset impairments, gains or losses on sales of assets and other non-recurring items. These items are uncertain, depend on various factors outside the Company's control and could be material to the Company's results computed in accordance with GAAP.

Conference Call

The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, September 24, 2026. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company's Chief Financial Officer and Executive Vice President, will moderate the call.

A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/vfm3zrk4. To access the conference call by phone, please go to https://register-conf.media-server.com/register/BI6cab45efce9f470c84e69fe7dc11c385, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com.

About Scholastic

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 including classroom magazines, and award-winning, entertaining children's media. As the world's largest publisher and distributor of children's books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com.

Forward-Looking Statements

This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children's book and educational materials markets generally and acceptance of the Company's products within those markets, and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.

SCHL: Financial

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SOURCE Scholastic Corporation