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Investing.com -- Scholastic Corporation (NASDAQ:SCHL) reported a wider-than-expected loss for its fiscal first quarter as the children’s publishing company faced revenue challenges, particularly in its Education Solutions segment. Shares tumbled 9% in after-hours trading following the announcement.
The company posted an adjusted loss of $2.52 per share for the quarter ended August 31, 2025, missing analyst expectations of a $2.45 per share loss. Revenue fell 5% YoY to $225.6 million, well below the consensus estimate of $240.41 million. The company typically generates an operating loss in the first quarter when schools are not in session.
Education Solutions revenue dropped significantly, decreasing 28% to $40.1 million amid what the company described as "increased funding uncertainty for schools and school districts." This volatility in the federal and state funding environment led many schools to delay or reduce purchases of supplemental curriculum materials.
"Scholastic made steady progress in the first quarter of fiscal 2026, advancing strategic initiatives across all segments," said Peter Warwick, President and Chief Executive Officer. "The seasonally quiet summer period resulted in an operating loss consistent with expectations."
The Children’s Book Publishing and Distribution segment showed some positive signs, with revenues increasing 4% to $109.4 million. Book Fairs revenue rose 18% to $34.1 million, driven by increased redemptions of Scholastic Dollars, which the company views as an indicator of positive engagement with Book Fair hosts.
Despite the quarterly miss, Scholastic affirmed its fiscal 2026 guidance. The company also noted it is evaluating potential sale-leasebacks of key real estate assets, which have "drawn substantial interest" and could provide additional liquidity for debt reduction and share repurchases.
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