Scholastic's revenue drops in crucial back-to-school quarter, stock drops more than 10%

Shares of Scholastic Inc. (SCHL) dropped more than 10% in the extended session Thursday after the publisher's revenue dropped in the crucial back-to-school quarter, mostly as Scholastic's book-club business dwindled, and the company called for lower earnings for fiscal 2024. Scholastic faces "a currently complex environment in U.S. schools," Chief Executive Peter Warwick said in a statement. Scholastic earned $76.9 million, or $2.45 a share, in the fiscal second quarter, compared with $75.3 million, or $2.12 a share, in the year-ago period. Revenue fell 4% to $562.6 million in the quarter, mostly "as a result of reduced, more targeted promotional spending and the elimination of unprofitable orders in book clubs," the company said. Scholastic dialed down its expectations for adjusted EBITDA to between $165 million and $175 million, compared with a previous range of $190 million to $200 million. Full-year revenue is expected to be about equal or slightly below the prior year, compared with earlier expectations of growth of 3% to 5%. There are no consensus numbers for Scholastic on FactSet.

-Claudia Assis

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12-14-23 1623ET

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