Scholastic Corp (NASDAQ:SCHL) stock fell 9.4 percent this morning (as of  11:42AM EDT; Source: Google finance) as the company missed the expectation in the first quarter of FY 18. The operating loss from continuing operations was $101.8 million in the first quarter of FY 18 compared to a loss of $62.5 million in the prior year period.

SCHL in the first quarter of FY 18 has reported the adjusted loss per share of $1.81, missing the analysts’ estimates for the adjusted earnings per share of $0. The company had reported the adjusted revenue of $189.2 million in the first quarter of FY 18, missing the analysts’ estimates for revenue of $208.3 million.

Moreover, SCHL had expected the first quarter revenue declines, particularly in its Children’s Book Publishing and Distribution and International segments, after the July 2016 publication of Harry Potter and the Cursed Child, Parts One and Two, the best-selling book in North America last year. Though SCHL expects to meet its revenue plan for the education business for the FY 18. Since its release on August 29th, Dav Pilkey’s Dog Man: A Tale of Two Kitties has been the top seller of all books in the U.S. and Canada. Strong children’s titles also include: I Survived the American Revolution, 1776; The Bad Guys in Attack of the Zittens; and the new paperback edition of Harry Potter and the Cursed Child, Parts One and Two. 

At the end of the first quarter 2018, the company’s cash and cash equivalents has exceeded the company’s total debt by $299.9 million, compared to $275.5 million a year ago. SCHL has distributed $5.3 million in dividends and reacquired $4.7 million of its common stock in open market transactions in the first quarter of FY 18. Furthermore, the SCHL had free cash use (as defined in the accompanying tables) of $131.0 million in the second quarter of FY 18, which was in line with the Company’s expectations, compared to free cash use of $122.4 million a year ago.

SCHL has affirmed its FY18 outlook for total revenue of $1.65 to $1.70 billion and earnings per diluted share from continuing operations in the range of $1.20 to $1.30, excluding one-time items. The consensus for earnings per share is of $1.21 and the consensus for revenue is of $1.68 billion. The company continues to expect the free cash use in the range of $10 to $20 million

SCHL stock has fallen 26.5% in this year to date (source: Google Finance). SCHL has been downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating.