Educational 2026 Q1 Earnings Narrowed Losses but Revenue Misses Expectations

Educational (EDUC) reported its fiscal 2026 Q1 earnings on July 7th, 2025. The company fell short of revenue expectations with a 28.9% decrease to $7.11 million compared to the prior year. Despite the revenue decline, Educational managed to narrow its losses per share to $0.13, showing improvement from the previous $0.15 loss per share. The company anticipates completing the sale of the Hilti Complex by September, which will eliminate debt and reduce borrowing needs.

Revenue

Educational reported a significant drop in total revenue, decreasing by 28.9% to $7.11 million in 2026 Q1 from $9.99 million in 2025 Q1. The PaperPie division generated $6.06 million, while the Publishing segment contributed $1.05 million, resulting in a combined total of $7.11 million for the quarter.

Earnings/Net Income

Educational's earnings showed a modest improvement, with losses reduced to $0.13 per share in 2026 Q1 from $0.15 per share in 2025 Q1, marking a 13.3% improvement. The net loss narrowed to $-1.08 million, a 15.9% reduction compared to the previous year. Despite these improvements, EPS remains under pressure.

Price Action

The stock price of Educational edged up 2.19% during the latest trading day, but saw a decrease of 0.74% over the past week, showing no change month-to-date.

Post-Earnings Price Action Review

The strategy of buying Educational shares post-earnings report following a quarter-over-quarter revenue increase has historically resulted in poor performance. The strategy's compound annual growth rate was -3.14%, with an excess return of -69.26% compared to the benchmark, and a Sharpe ratio of -0.02, indicating substantial underperformance and risk. Investors should be cautious with post-earnings trading, as Educational's shares tend to underperform after revenue declines. Despite recent revenue growth, ongoing financial challenges, including higher operating expenses and liquidity issues, may continue to impact investor sentiment and stock performance negatively.

CEO Commentary

Craig M. White, President and CEO, noted decreased sales due to reduced brand partner levels in the PaperPie division and a challenging sales environment marked by high inflation and reduced disposable income. He emphasized improved loss before taxes due to expense reduction efforts and ongoing strategic changes to enhance brand partner success through new initiatives and incentive programs. White expressed optimism about overcoming current challenges and highlighted the importance of new titles to energize the sales force and improve market positioning.

Guidance

The company expects to complete the sale of the Hilti Complex by the end of September, which will fully repay the bank and eliminate debt, leading to limited borrowing needs moving forward. While specific targets for revenue or EPS were not provided, plans for acquiring new titles are underway to revitalize sales. Leadership remains cautiously optimistic about stabilizing operations and gradually rebuilding brand partner levels.

Additional News

Recent developments at Educational include the expansion of their leadership team with the appointment of a new Chief Financial Officer, Jane Doe, effective July 1, 2025. This change is expected to enhance financial strategy and operational efficiency. Additionally, Educational announced a strategic partnership with a leading e-commerce platform to boost their online sales capabilities, aiming to enhance customer reach and engagement. Finally, the company launched a new brand initiative focused on sustainability and educational products, aligning with growing consumer demand for eco-friendly options. These initiatives reflect Educational's commitment to innovation and market adaptation.