Scholastic sees third-quarter revenue boost of 4%

Scholastic has reported a revenue rise of 4% year-on-year in its third quarter for the three months to 28th February, increasing from $344.7m (£261.3) to $360.1m (£273m) thanks to its children’s publishing division.

The third-quarter revenues take the publisher’s first nine months of fiscal year 2019 to $1,183.2m (£897m), compared to $1,132.2m (£858.4m) in 2018, an increase of $51m (£38.7m) or 5%.

The publisher said, without the recent introduction of the US revenue recognition standard ASC 606, there would have been a revenue increase of only 2%.

Net loss for the current period was also down to $12.6m (£9.6m), compared to a net loss in the prior year of $49.2m (£37.3m).

Richard Robinson, Scholastic chairman, president and c.e.o., said the results kept the company on course to achieve its sales targets. He pointed to a particularly strong performance in children’s book publishing and distribution, where revenues increased $16.4m (£12.4m), or 8%, to $218.0m (£165.3m) with continued strength in trade frontlist bestsellers, backlist favourites, and new Harry Potter-related publishing.

Robinson said: “Education was on plan, setting the stage for the fourth quarter where almost half of the year's revenue is recorded. Trade publishing also performed well in International, though the strong dollar continued to affect revenues.”

Best-selling titles included Fantastic Beasts: The Crimes of Grindelwald, series' Wings of Fire and The Baby-Sitters Club graphic novels, and Dav Pilkey's Dog Man, plus titles by Aaron Blabey and the 20th anniversary of publishing Harry Potter.

The report said its Clifford programming library "recorded significant sales in the quarter through licensed Amazon prime video, while anticipation continues to grow for the launch of the new Clifford TV series this fall on Amazon and PBS Kids, accompanied by new book publishing and licensing programmes."

In education, revenues in the third quarter rose to $60.3m (£45.7m), 1% up on the same period last year.

Robinson said: “With higher labour costs in fulfilment, combined with cost increases in paper and printing, the impact of sales tax collection, and the effect of the stronger US dollar in international, we now project our full year earnings to be at the low end of our guidance range. In the fourth quarter, we are focused on reducing operating costs, as well as achieving our end-of-year education sales."