Scholastic (SCHL) Q1 FY2027 Earnings Call: Guidance Reaffirmed as Entertainment Grows
Source Tradingkey
Key Takeaways
- Fiscal Q1 2027 revenue declined 4% year over year to $216.8 million, mainly due to lower Education and Children’s Book Publishing and Distribution revenue and the elimination of rental income after sale-leaseback transactions.
- Scholastic reported a $92.2 million operating loss. Adjusted operating loss widened to $88.7 million from $81.9 million, although the increase was $2.0 million on a comparable basis.
- Entertainment revenue rose to $20.1 million from $13.6 million, while its adjusted operating loss improved by $2.4 million to $1.6 million on higher production revenue.
- Education revenue fell $9.7 million to $30.4 million as school districts faced higher fixed costs, unfunded mandates and the end of ESSER funding in March.
- Management reaffirmed fiscal 2027 guidance for revenue growth of approximately 2% to 4%, adjusted EBITDA of $135 million to $145 million and free cash flow of $35 million to $40 million.
- Book Fair bookings and fair count were ahead of the prior year, while the fall publishing slate includes major Harry Potter, Dog Man and The Hunger Games releases and tie-ins.
Core Financial Results
| Metric | Fiscal Q1 2027 | Prior-year period | Change or context |
|---|---|---|---|
| Revenue | $216.8 million | $225.6 million | Down 4% |
| Operating loss | $92.2 million | $92.2 million | In line with prior year |
| Adjusted operating loss | $88.7 million | $81.9 million | Comparable-basis loss increased $2.0 million |
| Adjusted EBITDA | $(63.6) million | $(55.7) million | Improved $0.6 million on a comparable basis |
| Net loss | $71.2 million | $71.1 million | Broadly unchanged |
| Diluted loss per share | $3.77 | $2.83 | Higher loss per share partly reflected fewer shares outstanding |
| Adjusted net loss | $68.6 million | $63.3 million | Adjusted loss per share was $3.63 versus $2.52 |
| Free cash use | $110.8 million | $100.2 million | Higher operating cash use and capital expenditures |
| Quarter-end net debt | $86.8 million | $242.8 million | Lower mainly due to sale-leaseback proceeds |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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