#United States #New York #fiscal results #Scholastic Corporation #Children's Publishing

Scholastic Corporation's Strong Fiscal 2026 Q2 Performance

On December 18, 2025, Scholastic Corporation (NASDAQ: SCHL) unveiled its financial results for the second quarter of fiscal 2026, ending November 30, 2025. The global leader in children's publishing, education, and media showcased a significant growth trajectory, fueled primarily by stellar performance from its children's book franchises.

Peter Warwick, the President and CEO of Scholastic, highlighted the company's outstanding achievements during the quarter. He pointed out that the Book Fairs division performed exceptionally well, reporting a robust back-to-school season characterized by an increase in fair counts and revenue per fair. Notably, the success of Dav Pilkey's latest title, Dog Man: Big Jim Believes, alongside special editions of beloved franchises like The Hunger Games and Harry Potter, contributed significantly to their trade publishing success.

Furthermore, Warwick mentioned that the company successfully expanded its reach across digital platforms, particularly benefiting from engagement through YouTube and the newly launched Scholastic-branded streaming app, which has received over 3.5 million views since its debut in September. The development of three premium animated series in collaboration with leading media partners signifies a promising resurgence in production opportunities within the industry. This expansion demonstrates the enduring strength of Scholastic's iconic children's franchises and the potential to amplify their presence across various channels and formats.

A transformative period for Scholastic has recently concluded, which streamlined the company's operations with a singular goal: maximizing the potential of its celebrated brand and intellectual property. The completed sale-leasebacks of major real estate assets netted more than $400 million, intended for advancing capital allocation priorities alongside returning value to shareholders. As an immediate move to leverage this fresh capital, the Board of Directors sanctioned a $150 million expansion of share repurchase authorization. This is a significant increase following nearly $500 million returned to shareholders and a 25% reduction in the share count over the past four years.

As the company transitions into the second half of fiscal 2026, it reaffirms its earnings outlook, anticipating strong adjusted EBITDA and free cash flow figures. The fiscal year-end expectation aligns with, or modestly exceeds, the previous year's performance, driven by ongoing growth in children's book publishing and distribution segments, despite anticipated declines in education solutions sales amid a challenging funding landscape.

Fiscal 2026 Q2 Analysis

In the fiscal second quarter, Scholastic Corporation's revenues totaled $551.1 million, representing a 1% increase over the same period in the previous fiscal year. This increase was largelysustained by exceptional performances in the Children's Book Publishing and Distribution segment, highlighted by revenue growth across Book Fairs and Trade Publishing. However, the Education Solutions segment experienced a decline, with a 13% decrease in revenues to $62.2 million, attributed to challenging funding conditions that have restricted school spending on supplemental materials.

The operating income increased to $82.9 million, marking an 11% rise compared to prior year results. Excluding one-time items, the operating income reflects a healthy uptick, pegged at $95.0 million with an operating margin of 17.2%. Adjusted EBITDA reached $122.5 million, representing a 13% year-over-year increase, further illustrating the operational efficiency and revenue management strategies adopted by the company.

International and Entertainment Segments

International revenues grew by 4%, driven largely by the success of key global franchises, signaling that Scholastic’s reach extends well beyond the U.S. market. Meanwhile, the Entertainment segment faced challenges, witnessing a 10% decline in revenues, partially reflecting decreased production and distribution earnings. However, consistent with business strategies, Scholastic aims to reclaim its footing by refining operational strategies within this segment moving forward.

Future Prospects

As Scholastic navigates through the hurdles and opportunities of the coming fiscal year, it remains anchored on its primary mission: to empower children through reading and learning experiences. With a renewed focus on digital expansion, product innovation, and shareholder value creation, the company is poised to bolster its position as a leader in children's education and publishing.

This quarter's performance underscores Scholastic's capacity to adapt and thrive in a changing educational landscape while reaffirming its commitment to fostering a love for reading among children worldwide.

The outlook for Scholastic remains optimistic, and investors can anticipate robust performance as the company continues executing its strategy of diversified offerings and expanding its market presence.