Scholastic Corp (NASDAQ:SCHL) stock plunges 12.13% (As on December 15, 11:25:02 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the second quarter of FY 24. In the fiscal second quarter, the Children’s Book Publishing and Distribution segment’s revenues decreased 6% to $392.8 million. Book Fairs revenues were $242.1 million, up 1% from the prior year period primarily on higher fair count. Increased redemptions of incentive program credits were partly offset by modestly lower average revenue per fair. On a same-fair basis, revenue per fair rose modestly. Book Clubs revenues were $32.4 million, down 44% from the prior year period, reflecting a planned reduction in promotional spending on unprofitable offers, as the business implements new customer-centric strategies and is integrated with Book Fairs into a combined School Reading Events division. Consolidated Trade revenues were $118.3 million, a decline of 1% from the prior year period primarily due to lower revenues in Scholastic Entertainment, relative to the prior year, which benefited from the release of the Eva the Owlet TV series. Education Solutions revenues increased 1% to $81.0 million, due to higher state-sponsored program revenues, partly offset by lower sales of supplemental instructional materials.

SCHL in the second quarter of FY 24 has reported the adjusted earnings per share of $2.45, missing the analysts’ estimates for the adjusted earnings per share of $2.65. The company had reported 4 percent decline in the adjusted revenue growth to $562.6 million in the second quarter of FY 24, missing the analysts’ estimates for revenue of $625.23 million. This is primarily as a result of reduced, more targeted promotional spending and the elimination of unprofitable orders in Book Clubs, as the channel is repositioned to a smaller, more profitable core. Revenues from other channels and businesses were approximately in line with the prior period. Adjusted EBITDA increased $1.7 million to $124.0 million. Profits improved, reflecting lower promotional spending and improvements in inventory product and freight costs, which more than offset the impact of lower sales in Clubs.

The Company has updated its guidance for fiscal year 2024 and now expects Adjusted EBITDA (as defined in the accompanying tables) of $165 million to $175 million (compared to a range of $190 million to $200 million, previously). Full-year revenue is now expected to be approximately level with or slightly below the prior year (compared to growth of 3% to 5%, previously).