Scholastic Corporation Q1 Fiscal Year 2025 Earnings Call

Scholastic (NASDAQ:SCHL) Corporation, a global children’s publishing, education, and media company, reported a 4% revenue increase in its Q1 Fiscal Year 2025 Earnings Call, reaching $237.2 million. The company highlighted an improved seasonal operating loss and the appointment of Jeff Mathews as the new Chief Growth Officer. Scholastic’s CEO, Peter Warwick, expressed confidence in the company’s outlook for fiscal 2025, with guidance for modest growth in revenue and adjusted EBITDA.

Key Takeaways

• Scholastic’s revenues increased by 4% to $237.2 million in Q1 FY 2025.
• The seasonal operating loss improved to $85.6 million, down from $92.8 million a year prior.
• Jeff Mathews was appointed as the company’s first Chief Growth Officer.
• The Children’s Books segment saw a 3% revenue increase to $105.4 million.
• Education Solutions segment revenue declined by 16% to $55.7 million.
• The new Entertainment segment contributed $16.6 million in revenue.
• Scholastic is preparing for 90,000 book fairs in the back-to-school season.
• The company remains confident in its fiscal 2025 outlook, affirming guidance for 4-6% revenue growth.

Company Outlook

• Scholastic expects 4-6% revenue growth for fiscal 2025.
• Anticipated adjusted EBITDA of $140-150 million.
• Forecasting lower second-quarter results due to publishing timing and pressures in the Education Solutions segment.

Bearish Highlights

• Education Solutions experienced a 16% revenue decline due to reduced curriculum spending.
• Free cash flow usage increased to $68.7 million due to higher capital expenditures.
• International revenues nearly flat year-over-year at $56.8 million.

Bullish Highlights

• A 5% increase in Book Fair revenues to $28.8 million.
• Slight increase in Trade revenues to $73.9 million.
• Positive trends in Clubs, with increased sponsorships from teachers.
• Testing of new strategies to engage core customers effectively.

Misses

• Certain segments like Education Solutions faced challenges despite overall revenue growth.
• The company borrowed $225 million to support the 9 Story acquisition and operational needs.

Q&A Highlights

• CEO Peter Warwick discussed strategic changes and a focus on state-sponsored initiatives to distribute books.
• CFO Haji Glover confirmed confidence in the company’s net debt position and balance sheet management.

In conclusion, Scholastic Corporation is positioning itself for growth in the coming fiscal year with strategic initiatives. The leadership remains confident in navigating challenges in the Education Solutions segment while capitalizing on opportunities in Children’s Books and Entertainment segments.

InvestingPro Insights

Scholastic’s recent earnings report indicates optimism, with market capitalization at $853.06 million and a P/E ratio of 73.79. The company has maintained dividend payments for 17 consecutive years with a yield of 2.65%. Share buybacks signal management’s confidence in the company’s value. Recent revenues reflected a growth of -6.71% over the last twelve months, highlighting the necessity for careful monitoring.

Full Transcript – Scholastic Corporation (SCHL) Q1 2025

Operator: Good day and thank you for standing by… [Full transcript details follows].

This article was generated with AI support and reviewed by an editor.