Core Insights - Three stocks in the communication services sector are identified as potentially overbought, which may concern momentum-focused investors [1] Group 1: Overbought Stocks - Scholastic Corp (NASDAQ:SCHL) has an RSI value of 74.5, indicating it is overbought. The stock gained approximately 15% over the past month, closing at $33.44 [5] - Iridium Communications Inc (NASDAQ:IRDM) has an RSI value of 70.1, with a stock price increase of around 8% over the last five days, closing at $19.34 [5] - Sphere Entertainment Co (NYSE:SPHR) has an RSI value of 70.2, with a stock price increase of about 6% over the past month, closing at $95.26 [5]

Core Insights - Three stocks in the communication services sector are identified as potentially overbought, which may concern momentum-focused investors [1] Group 1: Overbought Stocks - Scholastic Corp (NASDAQ:SCHL) has an RSI value of 74.5, indicating it is overbought. The stock gained approximately 15% over the past month, closing at $33.44 [5] - Iridium Communications Inc (NASDAQ:IRDM) has an RSI value of 70.1, with a stock price increase of around 8% over the last five days, closing at $19.34 [5] - Sphere Entertainment Co (NYSE:SPHR) has an RSI value of 70.2, with a stock price increase of about 6% over the past month, closing at $95.26 [5]

Core Viewpoint - Scholastic Corporation has appointed Jeffrey Mathews as President of Scholastic Education, in addition to his role as Chief Growth Officer, to enhance the company's focus on literacy and educational content delivery [1][2]. Group 1: Leadership Appointment - Jeffrey Mathews has been appointed as President of Scholastic Education, effective immediately, while continuing as Executive Vice President and Chief Growth Officer [1][2]. - Mathews has served as the interim head of Scholastic Education since June 2025, leading significant improvements in business operations and strategy [3][4]. Group 2: Strategic Focus - Scholastic Education aims to address critical needs in schools by providing effective, evidence-based learning experiences that promote literacy [2]. - The division is positioned to drive long-term value through its leadership in literacy, trusted content, and partnerships with educators and organizations [2][4]. Group 3: Business Development and Growth - Under Mathews' leadership, the team has made progress in enhancing high-impact offerings and improving operational efficiency and profitability [3][4]. - Mathews will continue to refine and implement Scholastic's long-term growth strategy while overseeing corporate development and investor relations [4][5]. Group 4: Company Background - Scholastic Corporation has over 100 years of experience in children's publishing and education, focusing on literacy and creating quality content for children [6]. - The company is the largest publisher and distributor of children's books globally, reaching over 135 countries [6].

Financial Performance - Net income for the quarter ended November 30, 2025 increased by $7.1 million to $55.9 million, compared to $48.8 million in the prior fiscal year quarter, with earnings per share of $2.21 and $2.17 for Class A and Common Stock respectively [128]. - Revenues for the quarter ended November 30, 2025 increased by $13.9 million to $380.9 million, driven by new releases and increased revenues from School Reading Events [131]. - Revenues for the six months ended November 30, 2025 decreased by $24.6 million to $102.3 million in the Education Solutions segment, primarily due to delayed school funding [137]. - Revenues for the quarter ended November 30, 2025 decreased by $1.7 million to $15.1 million, compared to $16.8 million in the prior fiscal year quarter, primarily due to lower production revenues [146]. - Revenues for the six months ended November 30, 2025 decreased by $4.7 million to $28.7 million, compared to $33.4 million in the prior fiscal year period [147]. Cost and Expenses - Cost of goods sold for the quarter ended November 30, 2025 was $146.5 million, or 38.5% of revenues, a decrease from 39.0% in the prior fiscal year quarter due to improved inventory utilization [131]. - Other operating expenses for the quarter ended November 30, 2025 increased by $4.0 million to $125.6 million, driven by inflationary pressures [133]. - Cost of goods sold for the quarter ended November 30, 2025 was $8.8 million, or 58.3% of revenues, down from $10.6 million, or 63.1% of revenues in the prior fiscal year quarter [148]. - Other operating expenses for the quarter ended November 30, 2025 were $29.2 million, a decrease of $2.9 million from $32.1 million in the prior fiscal year quarter, primarily due to lower employee-related costs [157]. Segment Performance - Segment operating income for the quarter ended November 30, 2025 increased by $6.7 million to $108.8 million, attributed to increased revenues from book fairs and trade channels [135]. - Segment operating loss for the quarter ended November 30, 2025 was $9.0 million, compared to $4.7 million in the prior fiscal year quarter, driven by asset impairments recognized during the quarter [152]. - Segment operating income for the quarter ended November 30, 2025 was $12.4 million, compared to $5.7 million in the prior fiscal year quarter, reflecting improved margins and increased revenues [159]. Cash Flow and Liquidity - Cash used in operating activities was $8.6 million for the six months ended November 30, 2025, compared to cash provided of $29.3 million in the prior fiscal year period, representing an increase in cash used of $37.9 million [164]. - Cash provided by financing activities was $13.9 million for the six months ended November 30, 2025, down from $214.5 million in the prior fiscal year period, a decrease of $200.6 million [166]. - The Company's cash and cash equivalents totaled $99.3 million at November 30, 2025, down from $139.6 million at November 30, 2024 [167]. - The Company expects to maintain sufficient liquidity to fund ongoing operations, with cash and cash equivalents of $99.3 million and availability under the U.S. Credit Agreement of $124.6 million at November 30, 2025 [169]. Debt and Obligations - The company reported total debt obligations of $275.0 million as of November 30, 2025, with an average interest rate of 5.7% [176]. - The company has short-term debt obligations of $5.6 million, with an average interest rate of 9.0% for the fiscal year 2026 [176]. - Film-related obligations amount to $14.8 million, with varying average interest rates between 5.0% and 6.6% [176]. Tax and Regulatory Matters - The interim effective tax rate for the six months ended November 30, 2025 was 28.0%, a decrease from 37.2% in the prior fiscal year period [127]. - The certifications of the Chief Executive Officer and Chief Financial Officer were filed pursuant to the Sarbanes-Oxley Act of 2002 [184]. - The report was signed by the President and Chief Executive Officer, Peter Warwick, and the Chief Financial Officer, Haji L. Glover, on December 19, 2025 [186]. Risk Management - The Company expects newly imposed tariffs to continue to increase cost of goods sold, particularly during the upcoming peak selling season [132]. - The company manages foreign currency exchange risks through established procedures and short-term forward exchange contracts, which were not significant as of November 30, 2025 [175]. - The company is exposed to market risks primarily from changes in interest rates affecting its variable-rate borrowings [176]. - The company’s cash flows and earnings are subject to fluctuations from changes in foreign currency exchange rates due to its operations in various foreign countries [175]. Internal Controls - There were no changes in the company's internal control over financial reporting that materially affected its effectiveness during the quarter ended November 30, 2025 [179]. - The Corporation's disclosure controls and procedures were effective as of November 30, 2025, ensuring timely reporting as required by the SEC [179]. - The company’s management has concluded that its disclosure controls and procedures were effective as of November 30, 2025 [179]. - There were no changes in the Corporation's internal control over financial reporting during the quarter ended November 30, 2025, that materially affected its internal controls [179]. Share Repurchase - The company has not repurchased any shares under its authorized stock repurchase program during the three months ended November 30, 2025 [181]. - No shares were repurchased under the Company's authorized stock repurchase program during the three months ended November 30, 2025 [181]. Contracts and Agreements - The Company has entered into multiple contracts of purchase and sale and lease agreements dated December 1, 2025, with ESRT 555-557 Broadway, L.L.C. and FNLR Fortuna Major LLC [183]. - The financial statements for the quarter ended November 30, 2025, include condensed consolidated statements of operations and cash flows, among others [184]. - The company did not report any adoption or termination of trading arrangements by its directors or officers during the quarter [182].

Core Insights - Newmark Group, Inc. acted as the exclusive real estate advisor for Scholastic Corporation in a $386 million sale-leaseback transaction involving its New York City headquarters [1][2] - The transaction allows Scholastic to sell the property to Empire State Realty Trust while entering a long-term lease to maintain operations at the site, thereby reducing its overall footprint [2][3] - The sale-leaseback agreement includes a 15-year lease with extension options, with Empire State Realty Trust responsible for property maintenance and capital improvements [3] Company Overview - Newmark Group, Inc. is a leading commercial real estate advisor with a comprehensive suite of services tailored to various clients, including corporations, institutional investors, and property owners [4] - For the twelve months ending September 30, 2025, Newmark generated revenues exceeding $3.1 billion and operates approximately 170 offices with over 8,500 professionals globally [4]

Core Insights - Scholastic Corporation is a significant player in the publishing industry, particularly known for children's books and educational materials, with a strong global market presence [1] - The company's strategic focus on children's book publishing and distribution, especially during the back-to-school season, has been a key driver of its financial success [1] Financial Performance - Scholastic reported earnings per share (EPS) of $2.57 for the quarter ending November 2025, exceeding the Zacks Consensus Estimate of $2.07 and showing a year-over-year improvement from $1.82, resulting in an earnings surprise of +24.15% [2] - The company generated revenue of $551.1 million for the same quarter, slightly below the Zacks Consensus Estimate by 1.01%, but representing an increase from $544.6 million in the prior year, attributed to a successful back-to-school season and global publishing efforts [3] Strategic Initiatives - Scholastic has authorized a $150 million expanded share repurchase program, funded by proceeds from successful sale-leaseback transactions [4] - The Book Fairs division saw a successful back-to-school season, with an increase in the number of fairs and higher revenue per fair [4] Valuation Metrics - The company's price-to-sales ratio is 0.43, and the enterprise value to sales ratio is 0.37, indicating that investors are paying a reasonable amount for each dollar of sales [5] - Scholastic's current ratio of 1.80 reflects a strong ability to cover short-term liabilities with short-term assets, showcasing its solid financial position [5]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Scholastic reported revenue of $551.1 million for the quarter ended November 2025, reflecting a 1.2% increase year-over-year, with EPS at $2.57 compared to $1.82 in the same quarter last year, indicating a strong earnings performance despite a slight revenue miss against estimates [1] Revenue Breakdown - International revenues reached $89.5 million, exceeding the average estimate of $89.29 million, marking a year-over-year increase of 3.2% [4] - Entertainment revenues were reported at $15.1 million, falling short of the $16.45 million average estimate [4] - Education Solutions revenues totaled $62.2 million, below the estimated $64.8 million, representing a significant year-over-year decline of 12.6% [4] - Children's Book Publishing and Distribution revenues were $380.9 million, slightly below the estimated $383.12 million, but showing a year-over-year increase of 3.8% [4] Stock Performance - Scholastic's shares have returned 2.7% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.9% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - Scholastic reported quarterly earnings of $2.57 per share, exceeding the Zacks Consensus Estimate of $2.07 per share, and showing an increase from $1.82 per share a year ago, resulting in an earnings surprise of +24.15% [1] - The company posted revenues of $551.1 million for the quarter ended November 2025, which was slightly below the Zacks Consensus Estimate by 1.01%, but an increase from $544.6 million year-over-year [2] - Scholastic's stock has increased by approximately 34.3% since the beginning of the year, outperforming the S&P 500's gain of 14.3% [3] Earnings Outlook - The future performance of Scholastic's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is -$0.55 on revenues of $347.27 million, and for the current fiscal year, it is $0.91 on revenues of $1.65 billion [7] Industry Context - The Publishing - Books industry, to which Scholastic belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - In the second quarter, revenues increased by 1% to $551.1 million, with operating income improving to $95 million from $78.9 million in the prior year period, reflecting cost-saving initiatives [22][23] - Adjusted EBITDA grew to $122.5 million, up from $108.7 million a year ago, while net income rose to $66.3 million compared to $52 million in the prior year [22][23] - Adjusted earnings per diluted share increased to $2.57 from $1.82 last year [23] Business Line Data and Key Metrics Changes - Children's Book Publishing and Distribution revenues increased by 4% to $380.9 million, driven by strong performance in Book Fairs, which generated $242 million, a 5% increase [23][24] - Book Clubs revenue decreased to $28.5 million from $33.2 million, reflecting lower teacher sponsorships [23] - Trade Publishing revenues rose by 7% to $110.4 million, supported by new releases, including the latest Dog Man title [24] - Scholastic Education segment revenues fell to $62.2 million from $71.2 million, reflecting lower spending on supplemental curriculum products [25] Market Data and Key Metrics Changes - International segment revenues increased to $89.5 million from $86.7 million, with adjusted operating income improving to $12.8 million from $7.1 million [26] - The company anticipates modest declines in revenues and profitability in the international segment following strong performance in fiscal 2025 [27] Company Strategy and Development Direction - The company has focused on transforming into a more growth-oriented, shareholder-focused entity, with significant changes in leadership and organizational structure [4][5] - Strategic initiatives include the acquisition of Nine Story Media Group and a disciplined approach to capital allocation, returning nearly $500 million to shareholders since fiscal 2022 [7][8] - The company aims to leverage its unique strengths, including its brand and intellectual property, to drive long-term growth and value creation [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of fiscal 2026, anticipating revenue growth in school reading events and entertainment divisions, despite modest declines in trade and international revenues [31] - The company expects to benefit from improved execution and new products in the education segment, with a focus on stabilizing the top line [18][31] - Management highlighted the importance of the spring selling season and the potential for increased federal funding to support growth [57] Other Important Information - The company closed two sale-leaseback transactions, unlocking over $400 million in net proceeds, which will be used for share repurchases and other capital allocation priorities [8][29] - The board has authorized an increase in the open market share repurchase program to $150 million [29][30] Q&A Session Summary Question: Can you provide any color or timing around the $80 million increase in the buyback authorization? - Management indicated that the increase in buyback authorization is a first step following the successful sale-leaseback transaction, with plans to continue returning cash to shareholders [41][43] Question: What is driving the decline in the education business? - Management noted that the education segment is experiencing softness due to funding issues, but expects an uplift in the second half based on improved sales pipeline and federal fund disbursements [47][48] Question: Is trade channel sales expected to be flat to moderately lower for fiscal 2026? - Management confirmed that trade channel sales are anticipated to be in line with the previous year, despite tough comparisons due to major releases last year [49][50] Question: How do dividends play into the capital allocation strategy? - Management stated that the goal is to return capital efficiently, with a consistent quarterly dividend payout of about $0.20 per share [63][64] Question: Is there a decline in Adjusted EBITDA expected in the second half? - Management clarified that Adjusted EBITDA is expected to show growth when adjusted for prior year comparisons, despite the impact of sale-leaseback transactions [65]