Revenue fell 2% at Scholastic in the quarter ended February 28, 2026, slipping to $329.1 million, and the company’s operating loss rose to $26.9 million from $23.9 million in the quarter ended February 28, 2025. Scholastic attributed the lower sales primarily to declines in its children’s book publishing and distribution segment, as well as its international segment, which were somewhat offset by higher revenue in its smaller entertainment business.
Revenues decreased 3%, to $197.6 million, in the children’s publishing group due mainly to a 10% drop in trade sales, which Scholastic attributed mainly to the strong performance last year of Dav Pilkey’s Dog Man: Big Jim Believes. Bad winter weather also hurt trade sales, Scholastic president and CEO Peter Warwick said in a conference call with analysts.
Primarily driven by higher revenue per fair, sales in the book fair unit rose 2%, to $113.3 million. Book club revenues fell to $14.6 million compared to $15.2 million in the prior year period, primarily reflecting “modestly lower” participation, Scholastic reported.
Entertainment segment revenues increased 25%, to $16 million, “primarily reflecting higher episodic deliveries and production services revenues in the quarter,” the company reported. In the conference call, Warwick said Scholastic is beginning to “work on major new projects expected to be announced in the coming months.”
Warwick said Scholastic saw improvement in the quarter in its biggest trouble spot—education. Revenues were down 2% in the period, to $56.1 million, which Warwick noted represented “a significant deceleration of the declines we saw in the first and second quarters of the year.”
Warwick said he was confident that the group “is well positioned to continue stabilizing performance in fiscal 2026 with a goal of returning to growth in fiscal 2027” under the direction of Jeff Mathews, who was appointed the permanent president of the division in January.
Despite Warwick’s optimism, he acknowledged in the conference call that “district and school spending on supplemental curricula and resources, including our instructional programs, classroom libraries, literacy resources, and professional services, remains tight given continued funding uncertainty and the ongoing transition of the U.S. education system to science-based approaches to literacy instruction.”
Given the conflicting trends, Scholastic said it expects full-year revenue to be approximately flat compared to the prior year, “reflecting year-to-date softness in education and very strong comps in trade a year ago.”
For the nine-month period ended February 28, 2026, sales dipped 1%, to $1.10 billion, but the operating loss declined to $36.2 million from $37.7 million a year ago.
The release of Scholastic’s third quarter performance was accompanied by the news of the publisher’s newest effort to improve its stock price. The company will use some of the roughly $400 million in net proceeds from the sale of its headquarters and distribution buildings to fund a $200 million “modified Dutch auction tender offer.”
The company also said it will buy back shares through the auction in the $36–$40 per share range. Investors liked what they heard about the plan and Scholastic's share price was up about 11% in early morning trading to about $38 per share.
