A poor performance by its book fairs continued to plague Scholastic in the quarter ended February 28, 2021, contributing to 26% decline in total revenue in the quarter compared to the similar period a year ago. Fair revenue tumbled 73% from the third quarter of fiscal 2020, falling to $27 million. Fair revenue has been dropping for the entire school year as schools limit in-person teaching and events.
Despite the overall revenue decline, Scholastic said that cost controls cut its corporate operating loss in the period to $24.2 million, from $60.0 million in last year’s third quarter.
In addition to its book fairs, Scholastic’s book club business also fell last quarter, dropping 8.4% to $35.0 million. The trade division was a small bright spot, with sales up 2.6% in the quarter, to $79.3 million.
In reviewing the performance of the children’s publishing and distribution group, Scholastic said club revenue fell in part due to a strategic shift, unrelated to Covid-19, to reduce certain offers and inventory to enhance the club’s profitability. The increase in trade sales, Scholastic said, was due to a strong frontlist of fiction titles, as well as to more solid sales for the company’s educational workbooks and activity kits.
Sales in Scholastic’s education group declined 11% in the quarter, to $66.3 million, and fell 11% in the international group, to $69.9 million.
Scholastic chairman and CEO Dick Robinson said the combination of the determination to fully reopen schools by next fall and federal stimulus funds should mean a recovery for the company’s school business in the next fiscal year, which begins June 1, 2021. Scholastic added that, because of the uncertainty still surrounding Covid, it would not make a financial forecast for the fourth quarter of fiscal 2021, which ends May 31.