Scholastic Corporation (NASDAQ: SCHL) reported on September 24, 2026 that revenue for its fiscal 2027 first quarter ended August 31, 2026 fell 4% to $216.8 million, while operating loss was $92.2 million. The company, a global children’s publishing, education and media business, affirmed its full-year guidance.
The seasonally small quarter reflected lower revenue in Education and Children’s Book Publishing and Distribution, as well as the removal of rental income in Overhead after sale-leaseback transactions completed in December 2025. Higher Entertainment revenue partly offset those declines.
Peter Warwick, President and Chief Executive Officer, said:
Scholastic continued to advance its fiscal 2027 priorities during the seasonally small first quarter, with strong early indicators across our businesses reinforcing our confidence entering the important back-to-school and fall season. As we indicated in July, our operating loss for the quarter included the full-period impact of the sale-leaseback transactions. During the quarter, we also sustained investments to support our growth priorities in the quarters ahead.
In Children’s Books, we begin the second quarter with positive momentum, with Book Fair bookings ahead of prior year and a publishing and franchise schedule that positions us well for the year ahead, both domestically and internationally. During the first quarter, Entertainment’s production activity and pipeline continued to grow strongly, as we expanded capabilities to extend Scholastic IP across formats and platforms. In Education, though increased pressure on school and district budgets impacted sales, we continued to make progress aligning the cost structure and advancing the business’s transformation to support improved performance and long-term growth.
Our fiscal 2027 priorities remain focused on translating the strategic and operating progress achieved last year to drive further performance gains. We remain confident in the growth trajectory we outlined at year-end and are affirming our full-year guidance as we continue to execute against that plan and create long-term value for shareholders.
Full-Year Guidance#
The company affirmed its fiscal 2027 outlook for revenue growth of approximately 2% to 4% and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, a non-GAAP measure) of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods.
- Revenue growth: approximately 2% to 4%
- Adjusted EBITDA: approximately $135 million to $145 million
The company also continues to expect Free Cash Flow of approximately $35 million to $40 million.
Pro forma adjusted operating income (loss) and pro forma adjusted EBITDA reflect the net impact of the sale-leaseback transactions as if the transactions had occurred on June 1, 2025, the beginning of fiscal 2026. The incremental impact to first-quarter fiscal 2026 adjusted operating income (loss) and Adjusted EBITDA was $4.8 million and $8.5 million, respectively. The company refers to these measures as results on a comparable basis.
First-Quarter Financials#
Revenue decreased 4% to $216.8 million, primarily reflecting lower revenue in Education and Children’s Book Publishing and Distribution and the elimination of rental income in Overhead following the December 2025 sale-leaseback transactions. Higher Entertainment revenue partly offset the decline.
Operating loss was $92.2 million, approximately in line with the prior-year period. The quarter included one-time charges of $3.5 million, compared with $10.3 million in the prior-year period. Excluding one-time charges in both periods, adjusted operating loss (a non-GAAP measure) increased $6.8 million to $88.7 million. On a comparable basis, after reflecting the full-period impact of the sale-leaseback transactions in the prior-year period, adjusted operating loss increased $2.0 million from $86.7 million.
Adjusted EBITDA was a loss of $63.6 million, compared with a loss of $55.7 million in the prior-year period. On the same comparable basis, Adjusted EBITDA improved $0.6 million to a loss of $63.6 million from a loss of $64.2 million in the prior-year period, as improved results in Entertainment and International more than offset higher Overhead costs.
Segment Performance#
In the Children’s Book Publishing and Distribution segment, revenue decreased $3.6 million to $105.8 million.
Within School Reading Events, activity is minimal during the first quarter because of seasonality. Book Fairs revenue was $33.2 million, down $0.9 million from $34.1 million in the prior-year period. Book Clubs revenue was $2.1 million, up $0.3 million from $1.8 million.
Consolidated Trade revenue decreased $3.0 million to $70.5 million, primarily reflecting higher international co-edition sales in the prior-year period that did not recur in the quarter.
Segment operating loss was $38.2 million, including one-time charges of $0.4 million, compared with an operating loss of $35.1 million in the prior-year period, which included one-time charges of $0.8 million. Excluding one-time charges, adjusted operating loss increased $3.5 million to $37.8 million. On a comparable basis, adjusted operating loss increased $0.6 million.
Education revenue decreased $9.7 million to $30.4 million during the segment’s seasonally smallest quarter, reflecting continued pressure on school and district funding and spending on supplemental curriculum materials. Segment operating loss was $23.3 million, compared with $21.2 million in the prior-year period. On a comparable basis, adjusted operating loss increased $1.3 million, primarily reflecting lower revenue, partly offset by benefits from the segment’s improved cost structure.
Entertainment revenue increased $6.5 million to $20.1 million.
