Scholastic’s first quarter saw the company miss Wall Street’s revenue expectations, but the market responded positively thanks to notable progress in cost control and capital return initiatives. Management cited the successful completion of a major sale-leaseback transaction and an accelerated share repurchase program as key actions supporting shareholder value. CEO Peter Warwick emphasized ongoing strength in Book Fairs and improving engagement across digital platforms, while also noting that Education segment declines moderated compared to earlier quarters, helped by recent program improvements and operating discipline.
Is now the time to buy SCHL? Find out in our full research report (it’s free for active Edge members).
Scholastic (SCHL) Q1 CY2026 Highlights:
- Revenue: $329.1 million vs analyst estimates of $331 million (1.9% year-on-year decline, 0.6% miss)
- Adjusted EPS: -$0.15 vs analyst estimates of -$0.37 (58.9% beat)
- Adjusted EBITDA: $0 vs analyst estimates of $3.57 million (0% margin, significant miss)
- EBITDA guidance for the full year is $151 million at the midpoint, in line with analyst expectations
- Operating Margin: -8.3%, down from -7.1% in the same quarter last year
- Market Capitalization: $832.2 million
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 Q1 Earnings Call
- Brendan McCarthy (Sidoti & Company) asked how Scholastic would achieve its targeted Q4 revenue growth despite tough comparisons in Trade and rental income losses. CEO Peter Warwick cited Book Fairs strength and Education improvement as primary factors.
- Brendan McCarthy (Sidoti & Company) inquired about drivers of improvement in the Education business pipeline for Q4. Warwick pointed to summer reading, Knowledge Library, and book packs supporting science of reading as key contributors.
- Brendan McCarthy (Sidoti & Company) pressed for details on hitting the full-year adjusted EBITDA target. CFO Haji Glover said cost mitigation initiatives and the seasonal strength of Q4 would support profitability.
- Drew Crum (B. Riley Securities) questioned specific Book Fairs metrics behind management’s optimism. Warwick referenced higher fair counts, revenue per fair, and fewer cancellations as critical indicators.
- Drew Crum (B. Riley Securities) asked about the timing for reaching new net leverage targets. Glover said the tender offer would move leverage under 1x and that the long-term target is a gradual process.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) whether Book Fairs maintain strong participation and revenue growth, (2) if stabilization in the Education segment translates into consistent top-line gains, and (3) whether digital engagement continues to drive franchise expansion and incremental book sales. Execution on capital allocation, including the new share buyback program, will also be a critical signpost.
Scholastic currently trades at $38.55, up from $34.24 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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