Scholastic’s Q1 Earnings Call: Our Top 5 Analyst Questions

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Scholastic’s first quarter results were received positively by the market, with the company posting modest year-over-year revenue growth and a significant improvement in operating margin. Management attributed this performance to strong results from its Children’s Books segment—especially the success of new releases like Dog Man: Big Jim Begins—and the contribution from the recently acquired 9 Story Media Group. CEO Peter Warwick cited, “Scholastic’s unique strengths in engaging kids with great books and quality children’s media,” as a key driver, while also noting ongoing pressures on family and school spending.

Is now the time to buy SCHL? Find out in our full research report (it’s free).

Scholastic (SCHL) Q1 CY2025 Highlights:

  • Revenue: $335.4 million vs analyst estimates of $347.7 million (3.6% year-on-year growth, 3.5% miss)
  • EPS (GAAP): -$0.13 vs analyst estimates of -$0.78 (83.3% beat)
  • Adjusted EBITDA: $6 million vs analyst estimates of -$1.59 million (1.8% margin, significant beat)
  • EBITDA guidance for the full year is $140 million at the midpoint, below analyst estimates of $149.3 million
  • Operating Margin: -6.3%, up from -10.5% in the same quarter last year
  • Market Capitalization: $577.2 million

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Scholastic’s Q1 Earnings Call

  • Brendan McCarthy (Sidoti) asked about the potential for strong frontlist titles to drive backlist sales. CEO Peter Warwick responded that successful new releases like Dog Man and Hunger Games often boost sales of earlier titles in their series.
  • Brendan McCarthy (Sidoti) inquired about the slowdown in education sales and whether it was due to funding cuts or delayed spending. Warwick explained that schools are pausing purchases amid funding uncertainty and a focus on core curriculum rather than supplemental materials.
  • Brendan McCarthy (Sidoti) questioned whether changes in federal funding would impact the education business. Warwick clarified that most funding is congressionally mandated, so sudden cutbacks are unlikely, but trends are shifting toward more state and local spending.
  • Brendan McCarthy (Sidoti) asked for details on the strategic review of the Education Solutions segment. Warwick said it is internally focused on optimizing resource allocation to position the business for future success.
  • Brendan McCarthy (Sidoti) requested insights into the valuation of Scholastic’s real estate assets. CFO Haji Glover declined to provide a valuation, instead pointing analysts to disclosed rental income and asset details for independent assessment.

Catalysts in Upcoming Quarters

Our analyst team will be watching (1) the sales trajectory and market reception of the new Hunger Games release and other major book launches, (2) any signs of stabilization or recovery in supplemental education spending by schools and districts, and (3) the pace and impact of cost-saving initiatives on margins and profitability. Execution on strategic reviews and the integration of 9 Story Media Group will also be critical for assessing future direction.

Scholastic currently trades at $21.63, up from $18.78 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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