Scholastic(US:SCHL)2025-09-18 21:32Financial Data and Key Metrics Changes - Revenues decreased by 5% to $225.6 million in the first quarter, reflecting the seasonality of the business [13] - Adjusted EBITDA was a loss of $55.7 million, an improvement from a loss of $60.5 million a year ago [14] - Net loss was $63.3 million compared to $60.3 million in the prior year period, with adjusted loss per diluted share increasing to $2.52 from $2.13 [14] Business Line Data and Key Metrics Changes - Children's Book Publishing and Distribution revenues increased by 4% to $109.4 million, with Book Fair revenue rising by 18% to $34.1 million [14][15] - Scholastic Education segment revenues decreased to $40.1 million from $55.7 million in the prior year, reflecting lower spending on supplemental curriculum products [15][16] - Entertainment segment revenues decreased by $3 million to $13.6 million, primarily due to fewer episodic deliveries [16] Market Data and Key Metrics Changes - International segment revenues increased to $59.4 million from $56.8 million, driven by higher revenues in Australia, the UK, and Asia [17] - The company expects to surpass 10 million monthly views of classic Clifford content on YouTube by year-end [9] Company Strategy and Development Direction - The company is focused on building long-term opportunities in children's publishing, media, and education, while reducing costs and optimizing capital structure [22] - The integration of Trade, Fairs, and Clubs into a new Children's Book Group aims to streamline operations and enhance data analytics [8] - The company is pursuing real estate monetization, with significant investor interest in its properties [4][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a volatile funding environment affecting the Education segment but remains confident in long-term potential [10][11] - The company affirmed its fiscal year 2026 guidance for revenue growth of 2% to 4% and adjusted EBITDA of $160 to $170 million [21] Other Important Information - The company returned $5.2 million to shareholders through regular dividends and has $70 million remaining on its share buyback authorization [18] - The company is closely monitoring tariff impacts, expecting approximately $10 million in incremental tariff expenses this fiscal year [21] Q&A Session Summary Question: Feedback on new products in Education Solutions - Management received positive feedback on new products despite a difficult selling environment due to funding uncertainties [25] Question: Key variables to watch for spending trends - Management indicated that schools are still spending but are cautious due to funding uncertainties, expecting more confidence as federal programs resume [26][28] Question: Timing for financial impact from the Entertainment segment - Management noted that digital revenue from YouTube is expected to grow over time, with no immediate financial impact [30] Question: Cost structure and expense reduction opportunities - Management highlighted ongoing cost reduction efforts, with $15 million to $20 million in cost savings already realized [36] Question: Factors affecting fiscal year guidance - Management emphasized the importance of retail market conditions and tariff impacts on the business [37][38]