Scholastic Corporation reported fiscal 2026 second‑quarter revenue of $551.1 million, a 1 % year‑over‑year increase that fell short of the $556.7 million consensus estimate, missing by roughly $5.6 million or 1 %. The company’s adjusted earnings per share rose to $2.57, beating the $2.07 estimate by $0.50, a 24 % surprise that underscored disciplined cost management and a favorable mix of high‑margin trade sales.
Revenue growth was driven by a 4 % increase in the Children’s Book Publishing and Distribution segment, which reached $380.9 million, and a 5 % rise in book‑fair revenue. In contrast, the Education Solutions segment declined 13 % to $62.2 million, a drop that reflects a challenging funding environment for schools and a rationalization of the product portfolio. The 13 % decline is consistent across multiple sources and corrects the earlier 28 % figure.
Operating income climbed to $82.9 million, up 11 % from the same period a year earlier, while adjusted EBITDA rose to $122.5 million, a 13 % increase. The margin expansion was driven by higher trade‑sale margins and effective cost controls, offsetting the modest revenue miss. Operating income growth was supported by a 7 % rise in operating income for the Children’s Book Publishing & Distribution segment, which reached $108.8 million.
Management highlighted the strength of its core publishing business and the success of its book‑fair strategy. CEO Peter Warwick said the company “delivered strong performance in the second quarter and successfully executed on key strategic and financial initiatives,” noting the 4 % revenue gain in the Children’s Book Publishing & Distribution segment and the 5 % book‑fair growth. CFO Haji Glover emphasized cost‑control achievements, stating that operating income improved to $95 million from $78.9 million a year earlier and that adjusted EBITDA increased to $122.5 million from $108.7 million.
The company reaffirmed its fiscal 2026 guidance, projecting full‑year adjusted EBITDA of $146 million to $156 million and free cash flow exceeding $430 million, supported by proceeds from sale‑leaseback transactions that unlocked over $400 million. Scholastic also expanded its share‑repurchase authorization to $150 million, signaling confidence in its capital allocation strategy.
Market reaction was mixed: the substantial EPS beat attracted positive attention, while the slight revenue miss tempered enthusiasm. Investors focused on the company’s strong guidance, robust free‑cash‑flow outlook, and the capital‑allocation moves, which together suggest a solid foundation for future growth despite the Education Solutions headwinds.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.