Scholastic’s fourth quarter saw revenue growth that fell short of Wall Street expectations, but strong margin discipline led to a sizable beat on non-GAAP earnings per share. Management attributed the profit outperformance to effective cost controls, particularly in overhead and shared services, and ongoing strength in school book fairs and global franchises like Dog Man and Harry Potter. CEO Peter Warwick highlighted the company’s progress in unifying its children’s book group and leveraging proprietary school-based channels, stating, “Growth across key performance metrics, fair counts, revenue per fair, and e-wallet usage underscore the unique strength and relevance of this beloved event-focused channel.”

Is now the time to buy SCHL? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Scholastic’s Q4 Earnings Call

• Brendan Michael McCarthy (Sidoti & Company) asked about the timing and approach for deploying proceeds from the real estate sale. CEO Peter Warwick confirmed the initial focus is on share buybacks and CFO Haji Glover added they will also pay down credit facility debt.
• Brendan Michael McCarthy (Sidoti & Company) inquired about leverage targets. Glover stated the goal is to return to moderate leverage levels, historically around 1.75x debt to EBITDA.
• Brendan Michael McCarthy (Sidoti & Company) questioned the drivers of lower revenue guidance in education. Glover attributed it to continued funding delays but expects a second-half uplift as pipelines improve.
• Brendan Michael McCarthy (Sidoti & Company) asked about book fairs’ resilience. Warwick noted that while fewer students are buying, those who do purchase are spending more, which is driving revenue per fair higher.
• Drew Crum (B. Riley Securities) asked about the role of dividends versus buybacks in capital allocation. Glover said the dividend will remain steady but share repurchases are the top priority for excess capital.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) whether education segment growth materializes as anticipated federal funds are disbursed and new products launch, (2) the pace and impact of share repurchases and debt reduction enabled by the real estate sale, and (3) continued momentum in key franchises and digital initiatives such as Scholastic TV and YouTube engagement. Execution across these areas will be critical for sustaining profitability and growth.

Scholastic currently trades at $29.03, in line with $29.02 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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