Here's how cash-strapped consumers and school districts dragged down Scholastic earnings

By Claudia Assis

Publisher looks at new books in the 'Hunger Games' and 'Dog Man' series to boost 2025

Scholastic Corp. late Thursday reported lower-than-expected quarterly earnings, saying that "increasing pressure" on consumer spending hit its book-fair business and a slowdown on school book-buying did the same for its education segment.

Shares of Scholastic (SCHL) dropped more than 8% in the extended session Thursday, after ending the regular trading day down nearly 4%.

A "slowdown in supplemental curriculum purchases by schools and increasing pressure on consumer spending, as seen across the economy, impacted sales in Scholastic's education solutions and school book-fairs businesses" during its "seasonally important" fiscal fourth quarter, Scholastic said.

The publishing and media company said it was betting on a few soon-to-be-released, potential bestsellers to lift its bottom line in fiscal 2025.

The spring release of the 12th book in Dav Pilkey's "Dog Man" series was a bestseller in the U.S. and in several other English-speaking countries, also driving strong sales of earlier titles in the series, the company said.

Another "Dog Man" book, plus the release of the "Dog Man" movie in January 2025, "are exciting elements of the coming year's plan," Scholastic said.

So is "Sunrise on the Reaping," the fifth book in Suzanne Collins' "Hunger Games" series, to be published next March.

Scholastic reported fiscal fourth-quarter earnings of $36 million, or $1.23 a share, compared with $76 million, or $2.26 a share, in the year-ago quarter. Adjusted for one-time items, the company earned $1.73 a share.

Revenues dropped 10% to $474.4 million.

Analysts polled by FactSet expected the company to report adjusted earnings of $2.66 a share on sales of $552.5 million.

Scholastic guided for fiscal 2025 revenue growth between 4% and 6%, and an adjusted Ebitda between $140 million and $150 million, partially offset by "continuing spending on key growth initiatives and the impact of ongoing pressure on consumer and school spending," it said.

For its fiscal first quarter, the company said it expects a "seasonal loss" in line with the previous year.

-Claudia Assis

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07-18-24 1726ET

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