At Scholastic, in the fourth quarter ended May 31, revenue fell 6%, to $476.1 million, and operating income fell 4%, to $51.4 million. For the year, revenue fell 3%, to $1.58 billion, and operating income fell 4%, $15.2 million.
In the quarter, the company said, "continued growth in Book Fairs and higher Entertainment revenues were more than offset by lower Trade and International revenues due to more challenging comparisons with the prior-year publishing schedule and lower revenues in Education." At the same time, "improved profitability in Children's Book Publishing and Distribution and Entertainment [was] partly offset by lower results in Education and International."
In the quarter, the Children's Book Publishing and Distribution division revenues dropped 4%, to $276.3 million. Revenues for School Reading Events and Book Fairs rose 5%, to $186.6 million, reflecting higher fair count. Book Club revenues dropped 7%, to $12.2 million, primarily reflecting "lower participation."
In the division, Consolidated Trade revenues dropped 20%, to $77.5 million, reflecting "a challenging comparison with the prior-year publishing schedule," which included the release of Sunrise on the Reaping by Suzanne Collins, the fifth book in her Hunger Games series.
Education division revenues fell 13%, to $109.2 million, "primarily reflecting continued pressure on school and district spending for supplemental curriculum materials." But the company noted that "while fourth-quarter revenues remained below the prior year, the rate of decline improved in the second half of fiscal 2026 compared to the first half of the year, as the segment advanced its product, marketing and sales strategies following its repositioning."
International division revenues fell 13%, to $69.6 million, excluding favorable foreign currency exchange of $3.1 million, reflecting, again, "lower Trade revenues against a more challenging comparison with the prior-year publishing schedule."
Scholastic president and CEO Peter Warwick said, "Fiscal 2026 demonstrated the earnings power of a more focused Scholastic, as the company made substantial progress in a multi-year transformation of its governance, organization, strategy and balance sheet. Adjusted EBITDA rose, in line with guidance, positioning the company for growth in fiscal 2027.... Fiscal 2026 was also an important year of capital deployment and shareholder value creation. Following the sale-leaseback transactions, we returned significant capital to shareholders through share repurchases, a modified Dutch auction tender offer and dividends, and established a long-term leverage framework that supports both disciplined investment and continued capital returns. Together, these actions completed major elements of our financial transformation and provide Scholastic with greater financial flexibility to enhance shareholder returns."
Scholastic said that for the fiscal year 2027, it foresees growth of about 2%-4%, reflecting "expected growth in Children's Books, Entertainment and International, improved performance in Education, disciplined cost management and targeted investment in long-term growth opportunities."