Scholastic 2026 Q1 Earnings Misses Targets, Widened Net Loss

Scholastic reported its fiscal 2026 Q1 earnings on Sep 19th, 2025. The results fell short of Wall Street expectations, with both revenue and adjusted EPS underperforming. The company reaffirmed its full-year 2026 guidance, signaling confidence in its long-term strategy despite ongoing operational challenges.

Revenue for the quarter declined 4.9% to $225.60 million, with Children's Book Publishing and Distribution contributing $109.40 million. The Education Solutions segment reported $40.10 million, reflecting weaker demand amid budget uncertainties, while Entertainment revenue dropped to $13.60 million. International revenue rose 4% to $59.40 million, supported by growth in key markets. Overhead costs totaled $3.10 million, and consolidated revenue came in at $225.60 million.

Scholastic's losses widened significantly, with a net loss of $71.10 million in 2026 Q1, or $2.83 per diluted share, representing a 13.8% increase from the prior year. The company has recorded losses for over two decades in this quarter. The deepening losses indicate ongoing operational strain and highlight the need for continued cost management and strategic execution.

The stock price of Scholastic rose 2.97% on the latest trading day, but fell 11.99% over the past week and 3.93% month-to-date. The post-earnings reaction reflected investor concerns over the wider-than-expected loss and below-consensus revenue.

CEO Peter Warwick expressed cautious optimism, highlighting strong summer preparations for the back-to-school season and ongoing efforts to monetize real estate assets. While Scholastic Education faced headwinds from delayed grants and budget uncertainties, the leadership emphasized a refocus on core strengths and cost discipline. Warwick cited progress in digital expansion, IP monetization, and international opportunities as key drivers for long-term growth.

The company reaffirmed its full-year 2026 guidance for revenue growth of 2% to 4%, adjusted EBITDA of $160 million to $170 million, and free cash flow of $30 million to $40 million. Strong Q2 expectations are driven by major trade releases and improved book fair activity.

Additional news from Benzinga highlighted that Scholastic missed Wall Street estimates, with adjusted loss per share at $2.52 and revenue of $225.6 million below expectations. The Education Solutions segment saw a 28% revenue decline, and Entertainment revenue fell 18%. The company’s 9 Story Media Group acquisition contributed to higher amortization expenses. Despite operating cash outflows and rising debt, Scholastic declared a quarterly dividend of 20 cents per share. The CEO reaffirmed long-term growth confidence and noted that real estate monetization efforts are expected to conclude by fall.