Scholastic reports 1.2% sales increase for first quarter but rising costs see losses deepen

Scholastic has reported an increase of 1.2% in global revenue for the period ending 31st August 2022, although rising costs saw its operating loss deepen. 

Revenues increased from $259.8m (£232.6m) to $262.9m (£235.4m), driven primarily by higher book fairs revenues. However, this was partially offset by lower revenues in Education Solutions compared with the prior year period, which benefited from the timing of shipments related to the pandemic, the publisher said. 

The operating loss rose to $58.1m (£52m) from $32m (£29m) the previous year. The loss was driven by the lower sales in Education Solutions, resulting in a $11.6m increase in the operating loss. The remaining increase was driven by higher cost of goods sold, primarily reflecting increased freight costs in the supply chain. 

Revenues from frontlist titles in 2023 are expected to benefit from autumn releases, including the fourth Cat Kid Comic Club title from Dav Pilkey’s latest series.

Peter Warwick, president and c.e.o., said: “After a solid first quarter, Scholastic is excited for this year’s back-to-school season. Book Fairs is well positioned to increase in-person fair counts to meet our goal of 85% pre-pandemic levels, and Book Club offerings are receiving positive early responses from participating teachers and families. In trade, we are looking forward to multiple new releases from best-selling authors, including the fourth Cat Kid Comic Club in Dav Pilkey’s latest series. Importantly, across all of our children’s books channels, we are well prepared with inventory and staffing to meet anticipated demand.

“Up against a difficult prior year comparison, when sales benefited partly because of the timing of shipments, Education Solutions continued its multi-year growth trajectory in the first quarter. At the same time, we strategically invested in long-term go-to-market capabilities and moved to acquire Learning Ovations, the creator of A2i, a Science of Reading-based literacy assessment and instructional system, backed by gold-standard research, validation and efficacy. 

“Combined with Scholastic’s bestselling books and e-books, print and technology-based learning programmes, and other products and services that support children’s learning and literacy, this acquisition, which closed subsequent to quarter end, significantly accelerates development of Scholastic’s comprehensive literacy platform.”