An Inside Look at Earnings: The Tale of Scholastic Corporation (SCHL) – Fiscal 2023 Q3 Report and Outlook

Global children’s book publisher and distributor, Scholastic Corporation (SCHL) announced earnings after market close on Thursday. The company’s earnings and revenues for the third quarter came in lower than the previous year’s third quarter results. SCHL announced Q3 EPS of ($0.57) vs year-ago ($0.38) and Q3 revenues of $324.9M vs year-ago $344.5M. The company’s nightmarish tale continued into its FY guidance (May 2023) that also was lowered. Revenues were cited at ~4% vs prior guidance of 8-10%. Since today’s open, the stock price has fallen and has been down ~20% during Friday trade.

The company returned over $53M to shareholders through its dividend and expanded open-market share repurchases. The company cited continued softness in the retail bookselling market and purchasing delays for educational materials. FY ’23 EBITDA and revenue growth guidance was cut as cost acceleration has increasingly slowed.

Hopefully, SCHL will be able to turn the page on the quarter as CEO Peter Warwick stated, “With tougher market conditions expected to continue into Q4, we have updated our fiscal 2023 outlook. We have quickly adjusted short-term spending, in line with our revised top-line outlook, and focused on initiatives to improve margins. Critically, the long-term outlook for the importance of children’s books and of solutions to raise literacy rates remains as strong as ever, as does our optimism in Scholastic’s ability to grow and uniquely meet these critical needs.”

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An Inside Look at Earnings: The Tale of Scholastic Corporation (SCHL) – Fiscal 2023 Q3 Report and Outlook

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