Scholastic forecasts revenue return to growth after fiscal decline
The publishing company expects revenue to grow 2% to 4% in fiscal 2027 following a 3% decrease to $1,581.9 million last year.
Scholastic (SCHL) reported a decline in annual revenue for fiscal 2026, though the company forecast a return to growth in the coming year.
Full-year revenue decreased 3% to $1,581.9 million. This result followed a trajectory of softening expectations; the company had previously issued guidance in the second quarter that revenue would be in line with or modestly above the prior year, and later adjusted that outlook to approximately flat in the third quarter.
Adjusted EBITDA for the full year was $151.5 million, an increase of 4% year-over-year. The figure landed at the lower end of the $146 million to $156 million range the company had reaffirmed in its second and third quarter updates. On a comparable basis that reflects the full-year impact of sale-leaseback transactions, Adjusted EBITDA rose 15% to $132.4 million from $115.3 million in fiscal 2025.
Fourth-quarter results were weighed down by a 6% year-over-year revenue decrease to $476.1 million. Consolidated Trade revenues fell 20% to $77.5 million, due to a challenging comparison with the prior year's release of 'Sunrise on the Reaping'. International revenues also decreased 13% to $69.6 million, excluding $3.1 million in favorable foreign exchange.
Other segments showed mixed performance in the final quarter. Entertainment revenues rose 42% to $21.0 million, and adjusted segment operating income improved by $2.9 million to $0.8 million from a loss in the prior year. Book Fairs revenues grew 5% to $186.6 million due to a higher fair count, while Book Clubs revenues declined 7% to $12.2 million. Education revenues fell 13% to $109.2 million, though the rate of decline improved in the second half of the fiscal year.
For fiscal 2027, Scholastic targets revenue growth of approximately 2% to 4% and Adjusted EBITDA between $135 million and $145 million.
The company shifted to a net cash position of $48.9 million at the end of fiscal 2026, compared to a net debt position of $136.6 million at the end of fiscal 2025. This shift followed sale-leaseback transactions that contributed to a free cash flow of $436.0 million, up from $29.2 million in fiscal 2025. Scholastic returned $288.6 million to shareholders during the year, consisting of $268.6 million in share repurchases and $20.0 million in dividends.