Try as it might, Scholastic just can’t escape the impact of Harry Potter on its annual financial; results. With sales of Harry Potter and the Cursed Child selling more than 4.5 million copies in the fiscal year ended May 31, 2017, Scholastic had total revenue in the year of $1.74 billion with its children’s book publishing and distribution group contributing $1.05 billion to that total. Without the benefit of a Potter blockbuster, the company’s total revenue decreased 6% to $1.63 billion in fiscal 2018. Operating income declined 38% to $55.6 million in comparison to $89.2 million in the prior fiscal year.
Revenue in the children’s book publishing and distribution unit fell 9% compared to fiscal 2017, to $961.5 million. Trade sales (home to Harry Potter) fell 27%, to $223.6 million. Lower Potter revenues were partially offset by the performance of a strong core publishing list including titles from Dav Pilkey’s Dog Man and Captain Underpants series, as well as higher sales of the company’s Klutz book plus titles, Scholastic said.
Also within the group, book club sales fell 5%, to $224.3 million, but book fair sales rose 1%, to $513.2 million.
For fiscal 2018, educational segment revenue was $297.3 million, compared to $312.7 million a year ago, a 5% decline. International sales fell 2% in the year, to $369.6 million, due to strong sales of Cursed Child in fiscal 2017 in the Canadian and export channel, partially offset by a strong list of new trade titles in Australia, Canada, the United Kingdom and Asia, Scholastic said.
Scholastic chairman and CEO Dick Robinson noted that revenue for the year came in at the high end of its previously issued financial guidance and that the company made good progress in its Scholastic 2020 project, which is aimed at cutting costs and improving sales though better use of technology. The company will continue to invest in the upgrades in fiscal 2019, Robinson said. Its three year plan calls for revenue of $1.80 billion in fiscal year 2021, up from $1.63 billion in fiscal 2018. Revenue in the current year is projected to be in the range of $1.65 to $1.70 billion.