Scholastic Corp (NASDAQ:SCHL) stock plunge 14.92% (As on December 20, 12:03:03 AM UTC-4, Source: Google Finance) after the company reported fiscal second quarter results that missed analyst expectations, with revenue declining YoY amid softer publishing sales. Scholastic attributed the revenue decline primarily to timing-related factors in its Children’s Book Publishing and Distribution segment, including the current year’s publishing plan and fall fair bookings compared to the prior year. Book Fairs revenue dropped 5% YoY to $231 million due to fewer fairs held in the quarter. Net debt was $120.8 million compared to a net cash position of $143.2 million in the prior year period, reflecting the Company’s borrowings under its recently upsized revolving credit facility to fund the acquisition of 9 Story Media Group.
Meanwhile, the reach and impact of Scholastic Book Fairs continue to grow, as schools booked the largest number of fall fairs since the pandemic. The Book Clubs also experienced positive momentum on new promotions and improved engagement among children and families. Multiple new releases – including Christmas at Hogwarts and The Christmas Pig in paperback by J.K. Rowling and the final book in Aaron Blabey’s Bad Guys series: The Bad Guys in One Last Thing – maintained Scholastic’s presence at the top of bestseller lists. The company also continued to benefit from the addition of 9 Story Media Group. Looking at the remainder of the year, Scholastic published the thirteenth book in Dav Pilkey’s global bestselling series, Dog Man: Big Jim Begins, earlier this month. With millions of young readers across the globe driving the title to the number one bestselling book in the U.S. and Canada, as well as the number one bestselling children’s book in the UK and Australia. Later this fiscal year, in March 2025, we will release the highly anticipated fifth book in Suzanne Collins’ bestselling Hunger Games series, Sunrise on the Reaping, proving again that strategy.
SCHL in the second quarter of FY 25 has reported the adjusted earnings per share of $1.82, missing the analysts’ estimates for the adjusted earnings per share of $2.93. The company had reported the adjusted revenue decline of 3 percent to $544.6 million in the second quarter of FY 25, beating the analysts’ estimates for revenue of $587.06 million. Operating income decreased 26% to $74.7 million in the quarter, including $4.2 million in one-time charges, compared to $101.3 million a year ago.
The company reaffirmed its fiscal 2025 guidance, expressing confidence in its ability to navigate market conditions and achieve its full-year plan. Scholastic also announced it has upsized its revolving credit facility to $400 million.