Scholastic Reports Fiscal 2027 First Quarter Results

The unchanged full-year outlook follows higher operating cash use and divergent Education and Entertainment sales.

(Moderate)

(Neutral)

Rhea-AI Summary

Scholastic (SCHL) reported fiscal 2027 first-quarter revenue of $216.8 million for the period ended August 31, 2026. Revenue fell 4% from $225.6 million a year earlier, while the operating loss remained $92.2 million. Diluted loss per share widened to $3.77 from $2.83.

Education revenue fell 24% to $30.4 million; Entertainment revenue rose 48% to $20.1 million. Operating cash use increased to $94.6 million from $81.8 million, and free cash use rose to $110.8 million from $100.2 million. Net debt declined to $86.8 million from $242.8 million, primarily reflecting proceeds from sale-leaseback transactions completed in December 2025. Scholastic repurchased 630,850 shares for $25.8 million during the quarter.

The company affirmed fiscal 2027 guidance for approximately 2% to 4% revenue growth, adjusted EBITDA of approximately $135 million to $145 million and free cash flow of approximately $35 million to $40 million.

Positive

Entertainment revenue rose 48% to $20.1 million
Net debt fell to $86.8 million from $242.8 million

Negative

Education revenue fell 24% to $30.4 million
Diluted loss per share widened to $3.77 from $2.83
Operating cash use rose 16% to $94.6 million

News Explained

In its reported first-quarter results, Scholastic puts the prior year on a sale-leaseback basis as if the transactions had occurred on June 1, 2025: adjusted operating loss widened from $86.7 million to $88.7 million, while adjusted EBITDA loss narrowed from $64.2 million to $63.6 million.

Argus 15 min delay 13 alerts

-12.34% vs previous close $30.53 last price 2.0x rel. volume Open Argus

Details

Market move: SCHL -12.34% vs previous close. 1Q27 earnings report

$30.00 $35.27 Day Range

$570.17M Market Cap

On Sep 24, the day this news came out, the latest delayed price for SCHL is 12.34% below the previous close. Our momentum scanner has recorded 13 alerts for this stock so far that day. The latest delayed price is $30.53. Relative volume is elevated at 2.0x the average.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Market Context

The 2%–4% revenue-growth and $135–$145 million Adjusted EBITDA ranges were disclosed with fiscal 202...

Analysis

The 2%–4% revenue-growth and $135–$145 million Adjusted EBITDA ranges were disclosed with fiscal 2026 results and are reaffirmed here, framing Q1 as an update against existing fiscal-year targets.

Key Figures

Revenue: $216.8 million; down 4% Diluted EPS: $(3.77) Adjusted EBITDA: $(63.6) million +5 more

Revenue: $216.8 million; down 4%; Fiscal 2027 first quarter
Diluted EPS: $(3.77); Fiscal 2027 first quarter
Adjusted EBITDA: $(63.6) million; Fiscal 2027 first quarter; prior-year loss was $(55.7) million
Revenue growth guidance: 2%–4%; Fiscal 2027 full year; affirmed
Adjusted EBITDA guidance: $135 million–$145 million; Fiscal 2027 full year; affirmed
Free cash flow guidance: $35 million–$40 million; Fiscal 2027 full year; reaffirmed
Free cash flow use: $(110.8) million; Fiscal 2027 first quarter; prior-year use was $(100.2) million
Shares repurchased: 630,850 shares for $25.8 million; Fiscal 2027 first quarter

Historical Context

1 past event · Latest: Jul 23

1 event

Jul 23
Earnings report

24h Move

-7.1%

Fiscal 2027 revenue-growth and Adjusted EBITDA guidance was disclosed and is reaffirmed in this quarter's release.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

sale-leaseback transactions, adjusted ebitda, non-gaap measure, weighted average shares outstanding

4 terms

sale-leaseback transactions financial

"full-period impact of the sale-leaseback transactions"

A sale-leaseback transaction is when an owner sells a property or asset and immediately rents it back from the buyer, like selling your house and signing a lease to keep living in it. For investors, it matters because the seller converts a fixed asset into cash while taking on a new rent expense, which can boost short-term liquidity but change long-term earnings, debt levels and risk profiles that affect valuation and creditworthiness.

adjusted ebitda financial

"Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables)"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

non-gaap measure financial

"Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables)"

A non-GAAP measure is a company-crafted financial metric that adjusts or excludes items from standard accounting numbers to highlight what management sees as the business’s core performance. Investors use these figures like a filtered photo to reveal trends or cash flow drivers that raw accounting totals might hide, but because companies decide which items to remove, these measures should be compared with standard statements to avoid being misled.

weighted average shares outstanding financial

"Basic weighted average shares outstanding"

The weighted average shares outstanding is the average number of a company’s common shares that were available during a reporting period, adjusted so each change (like new shares issued or shares bought back) counts only for the portion of the period it was in effect. Investors use it to calculate per-share measures such as earnings per share, so it shows how ownership dilution or buybacks affect what each share is entitled to—like averaging how many people were at a potluck over time to determine each person’s share of the food.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google

09/24/2026 - 04:01 PM

Company Affirms Fiscal 2027 Guidance

NEW YORK, Sept. 24, 2026 /PRNewswire/ -- Scholastic Corporation (NASDAQ: SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal first quarter ended August 31, 2026.

Peter Warwick, President and Chief Executive Officer, said, "Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season. As we indicated in July, our operating loss for the quarter included the full-period impact of the sale-leaseback transactions. During the quarter, we also sustained investments to support our growth priorities in the quarters ahead.

"In Children's Books, we begin the second quarter with positive momentum, with Book Fair bookings ahead of prior year and a publishing and franchise schedule that positions us well for the year ahead, both domestically and internationally. During the first quarter, Entertainment's production activity and pipeline continued to grow strongly, as we expanded capabilities to extend Scholastic IP across formats and platforms. In Education, though increased pressure on school and district budgets impacted sales, we continued to make progress aligning the cost structure and advancing the business's transformation to support improved performance and long-term growth.

"Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders."

Outlook

The Company affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA (a non-GAAP measure, explained in the accompanying tables) of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods.

The Company also continues to expect Free Cash Flow (a non-GAAP financial measure, explained in the accompanying tables) of approximately $35 million to $40 million.

Fiscal 2027 Q1 Review

In $ millions (except per share data)	First Quarter				Change
	Fiscal 2027		Fiscal 2026		$		%
Revenues	$	216.8	$	225.6	$	(8.8)	(4) %

Operating income (loss)	$	(92.2)	$	(92.2)	$	—	— %
Earnings (loss) before income taxes	$	(93.7)	$	(97.0)	$	3.3	3 %
Diluted earnings (loss) per share	$	(3.77)	$	(2.83)	$	(0.94)	(33) %

Adjusted operating income (loss)*	$	(88.7)	$	(81.9)	$	(6.8)	(8) %
Adjusted diluted earnings (loss) per share*	$	(3.63)	$	(2.52)	$	(1.11)	(44) %

Adjusted EBITDA*	$	(63.6)	$	(55.7)	$	(7.9)	(14) %

Pro forma adjusted operating income (loss)*⁽¹⁾	$	(88.7)	$	(86.7)	$	(2.0)	(2) %
Pro forma adjusted EBITDA*⁽¹⁾	$	(63.6)	$	(64.2)	$	0.6	1 %

* Excludes one-time items. Please refer to the non-GAAP financial tables attached.
(1)	Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure) reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental impact to first-quarter fiscal 2026 adjusted operating income (loss) and Adjusted EBITDA was $4.8 and $8.5, respectively. The Company refers to these measures in this release as results "on a comparable basis." See Table 7 for the reconciliations to Adjusted operating income (loss) and Adjusted EBITDA.

Revenues decreased 4% to $216.8 million, primarily reflecting lower revenues in Education and Children's Book Publishing and Distribution and the elimination of rental income, recorded in Overhead, following the sale-leaseback transactions in December 2025, partly offset by higher Entertainment revenues.

Operating loss was $92.2 million in the quarter, approximately in line with the prior year period, including one-time charges of $3.5 million and $10.3 million in each period, respectively. Excluding one-time charges in both periods, adjusted operating loss (a non-GAAP measure) increased $6.8 million to $88.7 million. On a comparable basis, after reflecting the full-period impact of the sale-leaseback transactions in the prior year period, adjusted operating loss increased $2.0 million from $86.7 million in the prior-year period.

Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) was a loss of $63.6 million, compared to a loss of $55.7 million in the prior year period. On the same comparable basis, Adjusted EBITDA improved $0.6 million to a loss of $63.6 million from a loss of $64.2 million in the prior year period, as improved results in Entertainment and International more than offset higher Overhead costs.

Quarterly Results

Children's Book Publishing and Distribution

In the fiscal first quarter, the Children's Book Publishing and Distribution segment's revenues decreased $3.6 million to $105.8 million.

In School Reading Events, activity is minimal during the first quarter due to the seasonality of the business. Book Fairs revenues were $33.2 million, down $0.9 million from $34.1 million in the prior year period. Book Clubs revenues were $2.1 million, up $0.3 million compared to $1.8 million in the prior year period.

Consolidated Trade revenues decreased $3.0 million to $70.5 million, primarily reflecting higher international co-edition sales in the prior year period that did not recur in the quarter.

Segment operating loss was $38.2 million, which included one-time charges of $0.4 million, compared to an operating loss of $35.1 million in the prior year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted operating loss increased $3.5 million to $37.8 million. On a comparable basis, adjusted operating loss increased $0.6 million.

Education

Education revenues decreased $9.7 million to $30.4 million during the segment's seasonally smallest quarter, reflecting continued pressure on school and district funding and spending on supplemental curriculum materials. Segment operating loss was $23.3 million, compared to $21.2 million in the prior year period. On a comparable basis, adjusted operating loss increased $1.3 million, primarily reflecting lower revenues, partly offset by benefits from the segment's improved cost structure.

Entertainment

Entertainment revenues increased $6.5 million to $20.1 million, primarily reflecting higher production revenues. Segment operating loss was $1.8 million, which included one-time charges of $0.2 million, compared to a loss of $4.0 million in the prior year period. Excluding one-time charges, adjusted operating loss improved $2.4 million to $1.6 million, primarily reflecting higher revenues.

International

International revenues increased $1.1 million to $60.5 million. Excluding favorable foreign currency exchange of $1.2 million, revenues were approximately in line with the prior-year period. Segment operating loss was $2.9 million, which included one-time charges of $0.2 million, compared to an operating loss of $4.2 million in the prior year period, which included one-time charges of $0.1 million. Excluding one-time charges, adjusted operating loss improved by $1.4 million to $2.7 million, primarily reflecting cost management and operational efficiencies.

Overhead

Overhead costs were $26.0 million, which included one-time charges of $2.7 million, compared to $27.7 million in the prior year period, which included one-time charges of $9.4 million. Excluding one-time charges, adjusted overhead costs (a non-GAAP measure) increased $5.0 million to $23.3 million.

On a comparable basis, adjusted overhead costs increased $3.9 million, primarily reflecting higher costs related to corporate initiatives and the timing of employee-related expenses.

Capital Position and Liquidity

In $ millions	First Quarter				Change
	Fiscal 2027		Fiscal 2026		$		%
Net cash (used) provided by operating activities	$	(94.6)	$	(81.8)	$	(12.8)	(16) %
Additions to property, plant and equipment and prepublication expenditures		(18.1)		(14.9)		(3.2)	(21) %
Net borrowings (repayments) of film related obligations		1.9		(3.5)		5.4	NM
Free cash flow (use)*	$	(110.8)	$	(100.2)	$	(10.6)	(11) %

Net cash (debt)*	$	(86.8)	$	(242.8)	$	156.0	64 %

NM - Not meaningful
* Please refer to the non-GAAP financial tables attached

Net cash used in operating activities was $94.6 million, compared to $81.8 million in the prior year period, primarily reflecting higher working capital requirements, as well as higher rent expense and loss of rental income related to the sale-leaseback transactions. Free cash use (a non-GAAP measure of operations explained in the accompanying tables) was $110.8 million in fiscal 2027, compared to free cash use of $100.2 million in the prior period, reflecting increased net cash used by operating activities and higher capital expenditures, partly offset by net borrowings of film-related obligations.

Net debt (a non-GAAP measure explained in the accompanying tables) was $86.8 million compared to net debt of $242.8 million in the prior year period, primarily reflecting net proceeds from the Company's sale-leaseback transactions completed in December 2025, partly offset by capital returns to shareholders.

In the first quarter, the Company returned approximately $29.6 million to shareholders through share repurchases and dividends. This included the repurchase of 630,850 shares of common stock for $25.8 million and $3.8 million of dividends.

At August 31, 2026, $157.4 million remained authorized for future repurchases under the Company's stock repurchase program. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions.

Additional Information

To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, "Adjusted EBITDA", "Adjusted Operating Income (Loss)", "Free Cash Flow (Use)" and "Net Cash (Debt)". Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

The Company is unable to provide a reconciliation of forward-looking Adjusted EBITDA or Free Cash Flow to the most directly comparable GAAP financial measures, operating income and net cash provided by operating activities, respectively, without unreasonable effort. This is due to the uncertainty and inherent difficulty in predicting the occurrence and financial impact of items that would be excluded from or required to calculate such GAAP measures, including future severance charges, asset impairments, gains or losses on sales of assets and other non-recurring items. These items are uncertain, depend on various factors outside the Company's control and could be material to the Company's results computed in accordance with GAAP.

Conference Call

The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, September 24, 2026. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company's Chief Financial Officer and Executive Vice President, will moderate the call.

A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/vfm3zrk4. To access the conference call by phone, please go to https://register-conf.media-server.com/register/BI6cab45efce9f470c84e69fe7dc11c385, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com.

About Scholastic

For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been meeting children where they are – at school, at home and in their communities – by creating quality content and experiences, all beginning with literacy. Scholastic delivers stories, characters, and learning moments that empower all kids to become lifelong readers and learners through bestselling children's books, literacy- and knowledge-building resources for schools including classroom magazines, and award-winning, entertaining children's media. As the world's largest publisher and distributor of children's books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com.

Forward-Looking Statements

This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children's book and educational materials markets generally and acceptance of the Company's products within those markets, and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.

SCHL: Financial

Table 1

Scholastic Corporation
Consolidated Statements of Operations
(Unaudited)
(In $ Millions, except shares and per share data)

	Three months ended
	08/31/26		08/31/25
Revenues	$	216.8	$	225.6
Operating costs and expenses:
Cost of goods sold		118.1		123.5
Selling, general and administrative expense		178.3		177.2
Depreciation and amortization		12.6		16.3
Asset impairments and write downs		—		0.8
Total operating costs and expenses		309.0		317.8
Operating income (loss)		(92.2)		(92.2)
Interest income (expense), net		(1.6)		(4.5)
Other components of net periodic benefit (cost)		0.1		(0.3)
Earnings (loss) before income taxes		(93.7)		(97.0)
Provision (benefit) for income taxes		(22.5)		(25.9)
Net income (loss)		(71.2)		(71.1)
Basic and diluted earnings (loss) per share of Class A and Common Stock ⁽¹⁾
Basic	$	(3.77)	$	(2.83)
Diluted	$	(3.77)	$	(2.83)
Basic weighted average shares outstanding		18,862		25,161
Diluted weighted average shares outstanding		19,589		25,410

(1)

Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding.
Recalculating earnings per share based on numbers rounded to millions may not yield the results
as presented.

Table 2

Scholastic Corporation
Segment Results, Excluding One-Time Items
(Unaudited)
(In $ Millions)

	Three months ended				Change
	08/31/26		08/31/25		$		%
Children's Book Publishing and Distribution
Revenues
Book Clubs	$	2.1	$	1.8	$	0.3	17 %
Book Fairs		33.2		34.1		(0.9)	(3) %
School Reading Events		35.3		35.9		(0.6)	(2) %
Consolidated Trade		70.5		73.5		(3.0)	(4) %
Total Revenues		105.8		109.4		(3.6)	(3) %
Adjusted operating income (loss)*		(37.8)		(34.3)		(3.5)	(10) %
Adjusted operating margin*		NM		NM

Education
Revenues		30.4		40.1		(9.7)	(24) %
Adjusted operating income (loss)*		(23.3)		(21.2)		(2.1)	(10) %
Adjusted operating margin*		NM		NM

Entertainment
Revenues		20.1		13.6		6.5	48 %
Adjusted operating income (loss)*		(1.6)		(4.0)		2.4	60 %
Adjusted operating margin*		NM		NM

International
Revenues		60.5		59.4		1.1	2 %
Adjusted operating income (loss)*		(2.7)		(4.1)		1.4	34 %
Adjusted operating margin*		NM		NM

Overhead
Revenues		—		3.1		(3.1)	(100) %
Adjusted operating income (loss)*		(23.3)		(18.3)		(5.0)	(27) %

Adjusted operating income (loss)*	$	(88.7)	$	(81.9)	$	(6.8)	(8) %
Adjusted operating margin*		NM		NM

NM - Not meaningful
* Excludes one-time items. Please refer to Table 4 for one-time items and a reconciliation of the non-GAAP financials and Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions.

Table 3

Scholastic Corporation
Supplemental Information
(Unaudited)
(In $ Millions)

Selected Balance Sheet Items
	08/31/26		08/31/25
Cash and cash equivalents	$	106.8	$	94.3
Accounts receivable, net		186.6		187.0
Inventories, net		315.3		322.2
Accounts payable		150.2		175.8
Deferred revenue		171.6		181.0
Accrued royalties		68.0		86.6
Film related obligations		19.3		14.7
Lines of credit and long-term debt		184.8		331.2
Net cash (debt) ⁽¹⁾		(86.8)		(242.8)
Total stockholders' equity		656.5		878.0

Selected Cash Flow Items
	Three months ended
	08/31/26		08/31/25
Net cash provided by (used in) operating activities	$	(94.6)	$	(81.8)
Property, plant and equipment additions		(14.1)		(10.0)
Prepublication expenditures		(4.0)		(4.9)
Net borrowings (repayments) of film related obligations		1.9		(3.5)
Free cash flow (use)⁽²⁾	$	(110.8)	$	(100.2)

(1)	Net cash (debt) is defined by the Company as cash and cash equivalents less production cash of $8.8 and $5.9 as of August 31, 2026 and August 31, 2025, respectively, net of lines of credit and short-term and long-term-debt. Film related obligations are not included. The Company utilizes this non- GAAP financial measure, and believes it is useful to investors, as an indicator of the Company's effective leverage and financing needs.
(2)	Free cash flow (use) is defined by the Company as net cash provided by or used in operating activities (which includes royalty advances) and cash acquired through acquisitions and from the sale of assets, reduced by spending on property, plant and equipment and prepublication costs and adjusted for net cash flows from film related obligations. The Company believes that this non-GAAP financial measure is useful to investors as an indicator of cash flow available for debt repayment and other investing activities, such as acquisitions. The Company utilizes free cash flow as a further indicator of operating performance and for planning investing activities.

Table 4
Scholastic Corporation
Supplemental Results - Excluding One-Time Items
(Unaudited)
(In $ Millions, except per share data)
	Three months ended
	08/31/2026						08/31/2025
	Reported		One-time items		Adjusted		Reported		One-time items		Adjusted
Diluted earnings (loss) per share ⁽¹⁾	$	(3.77)	$	0.14	$	(3.63)	$	(2.83)	$	0.31	$	(2.52)
Net income (loss) ⁽²⁾	$	(71.2)	$	2.6	$	(68.6)	$	(71.1)	$	7.8	$	(63.3)
Earnings (loss) before income taxes	$	(93.7)	$	3.5	$	(90.2)	$	(97.0)	$	10.3	$	(86.7)

Children's Book Publishing and Distribution ⁽³⁾	$	(38.2)	$	0.4	$	(37.8)	$	(35.1)	$	0.8	$	(34.3)
Education		(23.3)		—		(23.3)		(21.2)		—		(21.2)
Entertainment ⁽⁴⁾		(1.8)		0.2		(1.6)		(4.0)		0.0		(4.0)
International⁽⁵⁾		(2.9)		0.2		(2.7)		(4.2)		0.1		(4.1)
Overhead ⁽⁶⁾		(26.0)		2.7		(23.3)		(27.7)		9.4		(18.3)
Operating income (loss) *	$	(92.2)	$	3.5	$	(88.7)	$	(92.2)	$	10.3	$	(81.9)

* Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions.
(1)	Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating earnings per share based on rounded numbers may not yield the results as presented.
(2)	In the three months ended August 31, 2026 and August 31, 2025, the Company recognized a benefit of $0.9 and $2.5, respectively, for income taxes in respect to one-time pretax items.
(3)	In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax asset impairment of $0.8 related to a certain product.
(4)	In the three months ended August 31, 2026, the Company recognized other pretax expenses of $0.2. In the three months ended August 31, 2025, the Company recognized pretax costs of less than $0.1 related to the acquisition of 9 Story Media Group.
(5)	In the three months ended August 31, 2026 and August 31, 2025, the Company recognized pretax severance of $0.2 and $0.1, respectively, related to cost-savings initiatives.
(6)	In the three months ended August 31, 2026, the Company recognized pretax severance of $2.3 related to cost-savings initiatives and other pretax expenses of $0.4. In the three months ended August 31, 2025, the Company recognized pretax severance of $8.7, related to cost-savings initiatives and other pretax expenses of $0.7.

Table 5

Scholastic Corporation
Consolidated Statements of Operations - Supplemental
Adjusted EBITDA
(Unaudited)
(In $ Millions)

	Three months ended
	08/31/26		08/31/25
Earnings (loss) before income taxes as reported	$	(93.7)	$	(97.0)
One-time items before income taxes		3.5		10.3
Earnings (loss) before income taxes excluding one-time items		(90.2)		(86.7)
Interest (income) expense ⁽¹⁾		1.6		4.5
Depreciation and amortization		25.0		26.5
Adjusted EBITDA ⁽²⁾	$	(63.6)	$	(55.7)

(1)	Amounts include production loan interest amortized into cost of goods sold.
(2)	Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items, before interest, taxes, depreciation and amortization. The Company believes that Adjusted EBITDA is a meaningful measure of operating profitability and useful for measuring returns on capital investments over time as it is not distorted by unusual gains, losses, or other items.

Table 6

Scholastic Corporation
Consolidated Statements of Operations - Supplemental
Adjusted EBITDA by Segment
(Unaudited)
(In $ Millions)

	Three months ended
	08/31/26
	CBPD⁽¹⁾		EDUC ⁽¹⁾		ENT ⁽¹⁾		INTL⁽¹⁾		OVH⁽¹⁾		Total
Earnings (loss) before income taxes as reported	$	(38.3)	$	(23.3)	$	(2.1)	$	(3.0)	$	(27.0)	$	(93.7)
One-time items before income taxes		0.4		—		0.2		0.2		2.7		3.5
Earnings (loss) before income taxes excluding one-time items		(37.9)		(23.3)		(1.9)		(2.8)		(24.3)		(90.2)
Interest (income) expense ⁽²⁾		0.1		0.0		0.2		0.0		1.3		1.6
Depreciation and amortization⁽³⁾		8.0		5.3		7.4		2.1		2.2		25.0
Adjusted EBITDA*	$	(29.8)	$	(18.0)	$	5.7	$	(0.7)	$	(20.8)	$	(63.6)

	Three months ended
	08/31/25
	CBPD⁽¹⁾		EDUC ⁽¹⁾		ENT ⁽¹⁾		INTL⁽¹⁾		OVH ⁽¹⁾		Total
Earnings (loss) before income taxes as reported	$	(35.1)	$	(21.2)	$	(4.5)	$	(4.7)	$	(31.5)	$	(97.0)
One-time items before income taxes		0.8		—		0.0		0.1		9.4		10.3
Earnings (loss) before income taxes excluding one-time items		(34.3)		(21.2)		(4.5)		(4.6)		(22.1)		(86.7)
Interest (income) expense ⁽²⁾		0.0		0.0		0.5		(0.0)		4.0		4.5
Depreciation and amortization⁽³⁾		7.6		6.1		4.8		1.9		6.1		26.5
Adjusted EBITDA*	$	(26.7)	$	(15.1)	$	0.8	$	(2.7)	$	(12.0)	$	(55.7)

* Please refer to Table 7 for results presented on a comparable basis reflecting the impact of the sale-leaseback transactions.

(1)

The Company's segments are defined as the following: CBPD - Children's Book Publishing and Distribution segment;
EDUC - Education segment; ENT - Entertainment segment; INTL - International segment; OVH - unallocated overhead.

(2)

Amounts include production loan interest amortized into cost of goods sold.

(3)

Depreciation and amortization in the Children's Book Publishing and Distribution, Education and International segments
includes amounts allocated from overhead.

Table 7

Scholastic Corporation
Supplemental Information (Unaudited)
(In $ Millions)

	Three months ended		Three months ended						Variance on a comparable basis
	08/31/2026		08/31/2025						Variance on a comparable basis
	Adjusted operating income (loss)		Adjusted operating income (loss)		Incremental sale- leaseback impact		Pro forma adjusted operating income (loss) ⁽¹⁾			$	%
Children's Book Publishing and Distribution	$	(37.8)	$	(34.3)	$	(2.9)	$	(37.2)	$	(0.6)	(2) %
Education		(23.3)		(21.2)		(0.8)		(22.0)		(1.3)	(6) %
Entertainment		(1.6)		(4.0)		(0.0)		(4.0)		2.4	60 %
International		(2.7)		(4.1)		—		(4.1)		1.4	34 %
Overhead		(23.3)		(18.3)		(1.1)		(19.4)		(3.9)	(20) %
Total	$	(88.7)	$	(81.9)	$	(4.8)	$	(86.7)	$	(2.0)	(2) %
	Three months ended		Three months ended						Variance on a comparable basis
	08/31/2026		08/31/2025						Variance on a comparable basis
	Adjusted EBITDA		Adjusted EBITDA		Incremental sale- leaseback impact ⁽²⁾		Pro forma adjusted EBITDA ⁽¹⁾			$	%
Children's Book Publishing and Distribution	$	(29.8)	$	(26.7)	$	(3.5)	$	(30.2)	$	0.4	1 %
Education		(18.0)		(15.1)		(1.5)		(16.6)		(1.4)	(8) %
Entertainment		5.7		0.8		(0.1)		0.7		5.0	NM
International		(0.7)		(2.7)		—		(2.7)		2.0	74 %
Overhead		(20.8)		(12.0)		(3.4)		(15.4)		(5.4)	(35) %
Total	$	(63.6)	$	(55.7)	$	(8.5)	$	(64.2)	$	0.6	1 %

NM - Not meaningful

(1)

Pro forma adjusted operating income (loss) (a non-GAAP measure) and Pro forma adjusted EBITDA (a non-GAAP measure)
reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of
fiscal 2026. The incremental adjustments shown above reflect the impact to the first quarter of fiscal 2026 prior to completion
of the transactions.

(2)

The $8.5 incremental impact to Pro forma adjusted EBITDA includes the $4.8 impact to Pro forma adjusted operating income
(loss) plus a $3.7 depreciation adjustment.

View original content to download multimedia:https://www.prnewswire.com/news-releases/scholastic-reports-fiscal-2027-first-quarter-results-302889707.html

SOURCE Scholastic Corporation

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is Scholastic's fiscal 2027 guidance?

Scholastic affirmed its fiscal 2027 outlook for approximately 2% to 4% revenue growth, adjusted EBITDA of approximately $135 million to $145 million and free cash flow of approximately $35 million to $40 million.

Why did Scholastic's Education revenue decline in the fiscal 2027 first quarter?

Education revenue fell $9.7 million to $30.4 million. Scholastic linked the decline to continued pressure on school and district funding and spending on supplemental curriculum materials.

How did Scholastic's first-quarter adjusted EBITDA compare after accounting for the sale-leaseback transactions?

On a comparable basis, adjusted EBITDA improved to a loss of $63.6 million from a loss of $64.2 million a year earlier. The comparison reflects the sale-leaseback transactions as if they had occurred at the beginning of fiscal 2026.

What drove Scholastic's higher operating cash use in the fiscal 2027 first quarter?

Net cash used in operating activities rose to $94.6 million from $81.8 million a year earlier. The increase primarily reflected higher working capital requirements, higher rent expense and the loss of rental income related to the sale-leaseback transactions.

Scholastic Reports Fiscal 2027 First Quarter Results