SCHOLASTIC CORP
For the period ended May 31, 2026. Filed Jul 24, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jul 24, 2026
SCHL$37.20+0.9%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-05-31; filed 2025-07-25.
0000866729-25-000020
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2026-05-31; filed 2026-07-24.
0000866729-26-000018
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 97 current paragraphs.
63 unchanged; 10 reworded; 23 added; 3 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
The rapid development and proliferation of generative artificial intelligence technologies could subject us to increased competitive pressure and legal risks.
Current report
Generative artificial intelligence ("Generative AI") technologies pose a broader and more fundamental set of risks to the Company's core business model that the Company may be unable to fully anticipate or mitigate.
Current report
Competitive displacement of traditional publishing. Generative AI tools are now capable of producing children's stories, illustrations, educational content, and entertainment scripts at materially lower cost and at greater speed than traditional human-led editorial and creative processes. As these tools continue to improve in quality and become more widely accessible, they may enable authors, educators, and other content producers to develop and distribute children's books and educational materials without engaging traditional publishing services of the kind provided by the Company. This could reduce demand for the Company's trade publishing capabilities and diminish its competitive position relative to self-publishing alternatives. The growing use of self-publishing technologies by authors already represents a competitive risk to the Company's trade publishing business, and the integration of Generative AI into self-publishing workflows is likely to significantly amplify this risk over time.
Current report
Competition from AI-enabled educational technologies. The Company’s Education segment operates in markets that are being reshaped by the continued advance of generative artificial intelligence (AI). While digital and adaptive learning technologies have been used in education for more than a decade, newer AI-enabled tools—including large language model–based tutoring and virtual instructional assistants—are increasingly being adopted and evaluated by schools and school districts, and the pace and extent of adoption vary across grade levels and product segments. As these technologies evolve, some educators and school systems may choose to allocate a greater portion of their instructional budgets toward AI-based or other technology-enabled learning solutions rather than traditional literacy programs, curriculum materials and related products. In addition, these technologies may increase competitive pressures, reduce demand for certain of the Company's offerings, or require the Company to make additional investments in product development and innovation. If the Company is unable to respond effectively to these changes, its revenues, market position and operating results could be adversely affected.
Current report
Copyright and training data liability. There is significant uncertainty and ongoing litigation in the United States and other jurisdictions regarding the extent to which the use of copyrighted works to train Generative AI models constitutes copyright infringement and gives rise to liability. The Company's extensive portfolio of published works may have been used, without authorization, in training datasets for Generative AI systems operated by third parties, potentially giving rise to claims that the Company may assert. Conversely, to the extent the Company incorporates Generative AI tools into its own content development or editorial processes, it may face claims that content so generated infringes the intellectual property rights of third parties whose works were used in training those models. The legal standards applicable to such claims remain unsettled and are subject to ongoing judicial and legislative development, and adverse outcomes in this area of law could expose the Company to significant liability or require it to materially alter its use of AI-enabled tools.
Current report
There can be no assurance that the Company will be able to adapt its business model and operations sufficiently rapidly or effectively to address the foregoing risks, and the Company's failure to do so could have a material adverse effect on its business, financial condition, and results of operations.
Current report
Risks Related to Our Financial Condition and Capital Structure
Current report
Changes in interest rates, constraints on access to capital, or deterioration in credit market conditions could adversely affect the Company's financial condition, liquidity, and ability to fund its operations and strategic objectives.
Current report
The Company's operations and strategic plans, including its ongoing investments in digital transformation, entertainment production, and the integration of acquisitions such as 9 Story, require access to adequate liquidity and financing on commercially reasonable terms. The Company utilizes its credit facilities to support its working capital requirements and capital expenditure programs. Borrowings under any floating-rate credit facilities are subject to variability in interest rates and, accordingly, an increase in prevailing interest rates would increase the Company's cost of borrowing and could adversely affect the Company's interest expense and cash flows.
Current report
Tightening in credit market conditions or a deterioration in the Company's operating performance, financial position, or credit profile could adversely affect its ability to access the capital markets or to renew or replace its existing credit facilities on favorable terms, or at all.
Current report
These laws vary significantly in scope, application, and enforcement and create a complex and evolving compliance environment.
Current report
Restructuring of federal education programs and agencies, including significant changes to or the potential elimination of the U.S. Department of Education, could materially reduce demand for the Company's educational products and adversely affect its Education business.
Current report
The Company's Education segment is materially dependent on the availability of federal, state, and local education funding to school districts and other educational institutions for the purchase of literacy programs, educational materials, and related products and services. Federal education funding, including programs administered under the Elementary and Secondary Education Act (including Title I grants targeted at schools serving high concentrations of students from low-income households) and other federal education initiatives, represents a significant source of funding available to the school districts and educational institutions that are the Company's primary customers in this segment.
Current report
Since 2025, the federal government has undertaken significant restructuring of the U.S. Department of Education, including material reductions in staffing levels and proposals to reorganize, curtail, or eliminate certain federal education programs and agencies. The scope and ultimate outcome of these restructuring efforts remain subject to significant uncertainty, including as a result of ongoing legislative, regulatory, and judicial proceedings. Any substantial reduction, reorganization, or elimination of federal education funding programs could materially reduce the budgets available to school districts to purchase the Company's literacy programs and educational materials, adversely affecting the Company's Education revenues and growth prospects.
Current report
While states and localities may seek to offset reductions in federal funding, there is no assurance they will do so, and they may instead reduce their own education budgets or reprioritize available funds away from the literacy materials and programs the Company provides. Any such reduction in available funding at the federal, state, or local level, or any material change in the procurement processes or funding eligibility criteria applicable to the purchase of literacy programs and educational materials, could have a material adverse effect on the Company's Education business, financial condition, and results of operations.
Current report
The evolving, fragmented and rapidly changing landscape of Environmental, Social and Governance ("ESG") reporting requirements and environmental regulatory obligations at the federal, state, and international levels could expose the Company to significant compliance costs, fines, penalties, and reputational harm.
Current report
ESG reporting requirements and related environmental regulatory obligations are evolving rapidly across the multiple jurisdictions in which the Company operates, and the regulatory landscape in this area continues to change in ways that are difficult to predict and that may impose significant compliance burdens on the Company.
Current report
In the United States, ESG-related regulatory requirements have expanded significantly at the state level, with individual states, notably California, enacting mandatory climate disclosures of various types. Additional states have enacted or are actively developing similar requirements, resulting in an environment where the Company may simultaneously be subject to multiple overlapping state-level ESG reporting obligations, each with their own filing deadlines and compliance standards. The pace with which such state-level requirements are being introduced or revised means that the Company may not have adequate advance notice of new obligations to implement the systems, processes, and reporting infrastructure required to achieve timely compliance.
Current report
In addition, jurisdictions outside of the United States have adopted their own ESG reporting obligations. In particular, the European Union's (EU's) Corporate Sustainability Reporting Directive ("CSRD") requires detailed, audited sustainability disclosures from companies operating within EU jurisdictions above applicable revenue and employee thresholds, applying standards developed under the European Sustainability Reporting Standards ("ESRS"). These international requirements may vary materially from each other and from U.S. requirements, further creating a complex compliance landscape.
Current report
In addition to reporting obligations, various jurisdictions impose binding carbon emissions reduction targets, among other requirements. The timelines for such targets are subject to revision and may be accelerated by regulatory authorities without adequate notice, creating a risk that the Company may be unable to adapt its operations and supply chain practices quickly enough to achieve compliance. The Company's printing and distribution operations, may have difficulty in achieving the emissions reductions required under applicable regulatory frameworks within the required timeframes.
Current report
Non-compliance with ESG reporting requirements or emissions reduction obligations — whether as a result of missed filing deadlines, incomplete or inaccurate disclosures, or failure to achieve required reductions in the Company's carbon footprint — could result in investigations, fines and civil penalties, restrictions on the Company's ability to operate or sell products in affected jurisdictions, and reputational harm. The significant cost of building and maintaining the reporting infrastructure, third-party verification arrangements, and internal controls required to comply with these evolving obligations could materially increase the Company's operating costs.
Current report
There can be no assurance that the Company will be able to identify and respond to new ESG-related regulatory requirements applicable to the Company with sufficient timeliness, or that the Company will achieve all applicable environmental targets within required timeframes. Failure to do so could have a material adverse effect on the Company's business, financial condition, results of operations, and reputation.
Current report
Trade policies and tariff regulations have changed significantly since 2025 and continue to evolve. The United States has imposed, modified, and in certain cases replaced tariffs on imported goods under various statutory authorities, while other countries have implemented or may implement responsive trade measures. Trade policies affecting imports from major trading partners, including China, Canada, Mexico, the European Union, and other countries, remain subject to ongoing regulatory, judicial, and political developments. In addition, uncertainty regarding future trade policies may make it more difficult to forecast costs, manage inventory, and plan pricing strategies. To the extent we are unable to mitigate increased costs through pricing actions, operational efficiencies, sourcing changes, or other measures, our gross margins, operating income, net income, and cash flows could be adversely affected.
Removed paragraphs (3)
Previous report
Since the beginning of 2025 there have been significant increases in tariffs on certain goods imported into or exported from the U.S., and adverse responses by foreign governments arising from these tariffs. Depending upon the course of future negotiations among the United States and certain of its major trading partners, including Canada, Mexico, the EU and China, more tariffs may be added in the future. These tariffs (existing or future) could have an adverse impact on our results of operations and if we are not able to pass the price increases resulting from such tariffs through to our customers, our cost of sales will likely rise, decreasing our margins, operating income, and net income.
Previous report
We own certain significant real estate assets which are subject to various risks related to conditions affecting the real estate market.
Previous report
The Company has direct ownership of certain significant real estate assets, in particular the Company’s headquarters location in New York City, its primary distribution center in Jefferson City, Missouri and the UK facility in Warwickshire. The New York headquarters location serves a dual purpose as it also contains premium retail space that is or will be leased to retail tenants in order to generate rental income and cash flow. Accordingly, the Company is sensitive to various risk factors such as changes to real estate values and property taxes, pricing and demand for high end retail spaces in Soho, New York City, interest rates, cash flow of underlying real estate assets, supply and demand, and the credit worthiness of any retail tenants. There is also no guarantee that investment objectives for the retail component of the Company’s real estate will be achieved.
Reworded paragraphs (10)
Previous wording
The Company’s business is affected significantly by changes in customer purchasing patterns or trends in, as well as the underlying strength of, the trade, educational and entertainment markets for children. In particular, the Company’s educational publishing business may be adversely affected by budgetary restraints and other changes in educational funding as a result of new policies which could be implemented at the federal level or otherwise resulting from new legislation or regulatory action at the federal, state or local level, or by changes in the procurement process, to which the Company may be unable to adapt successfully. In addition, there are many competing demands for educational funds, and there can be no guarantee that the Company will be successful in continuing to obtain sales of its educational programs and materials from any available funding. Further, changes in educational practices affecting structure or content of educational materials or requiring adaption to new learning approaches, particularly in grades pre-K through 6, as well as those which may arise from new legislation or policies at the state or local level directed at content or teaching practices and materials, to which the Company is unable to successfully adapt could result in a loss of business adversely affecting the Company's business and financial performance. In addition, in a highly politicized environment, the content of some of the products being sold by the Company could become controversial, negatively impacting sales made to schools, through partnerships with government agencies or through sponsorships and funding programs. Within the children's book publishing business, the Company's financial performance could be adversely impacted if its U.S. book clubs channel is unable to adapt to internal changes and the external market. The Company has recently taken a new holistic approach to serving its customers through the reorganization of the Company’s business conducted through the Trade group and its school book fairs and book clubs businesses previously conducted through its Scholastic Reading Events group into the new Children’s Book Group as noted under Item 1 – Business. The Children’s Book Group’s ability to execute on the new customer-centric strategies and obtain the operational improvements expected to be derived from the reorganization, if not aligned with its customer purchasing behaviors, or the benefits expected to be achieved from the reorganization are not otherwise realized, could result in the Company’s results being negatively impacted.
Current wording
The Company’s business is affected significantly by changes in customer purchasing patterns or trends in, as well as the underlying strength of, the trade, educational and entertainment markets for children. In particular, the Company’s educational publishing business may be adversely affected by budgetary restraints and other changes in educational funding as a result of new policies which could be implemented at the federal level or otherwise resulting from new legislation or regulatory action at the federal, state or local level, or by changes in the procurement process, to which the Company may be unable to adapt successfully. In addition, there are many competing demands for educational funds, and there can be no guarantee that the Company will be successful in continuing to obtain sales of its educational programs and materials from any available funding. Further, changes in educational practices affecting structure or content of educational materials or requiring adaption to new learning approaches, particularly in grades pre-K through 6, as well as those which may arise from new legislation or policies at the state or local level directed at content or teaching practices and materials, to which the Company is unable to successfully adapt could result in a loss of business adversely affecting the Company's business and financial performance. In addition, in a highly politicized environment, the content of some of the products being sold by the Company could become controversial, negatively impacting sales made to schools, through partnerships with government agencies or through sponsorships and funding programs. Within the School Reading Events business, the Company's financial performance could be adversely impacted if its U.S. book clubs channel is unable to adapt to internal changes and the external market. The Company has recently taken a new holistic approach to serving its customers through the reorganization of the Company’s Trade, Book Fairs and Clubs businesses into a combined Children's Book Group. The Children’s Book Group’s ability to execute on the new customer-centric strategies and obtain the operational improvements expected to be derived from the reorganization, if not aligned with its customer purchasing behaviors, or the benefits expected to be achieved from the reorganization are not otherwise realized, could result in the Company’s results being negatively impacted. In addition, the Company’s trade business depends on successfully developing and commercializing new titles and original intellectual property that resonate with consumers and can be leveraged across multiple lines of business. While the Company continues to invest in new properties and expand its portfolio, changes in consumer preferences or challenges in achieving broad market appeal could affect the performance of these initiatives and, in turn, impact revenues, profitability, and growth prospects.
Previous wording
Paper prices fluctuate based on worldwide demand and supply for paper in general, as well as for the specific types of paper used by the Company. The Company is also subject to inflationary pressures on printing, paper, transportation and labor costs. While the Company has taken steps to manage and budget for certain expected operating cost increases, if there is a significant disruption in the supply of paper or a significant increase in paper costs, or in its shipping or fuel costs, beyond those currently anticipated, which would generally be beyond the control of the
Current wording
Paper prices fluctuate based on worldwide demand and supply for paper in general, as well as for the specific types of paper used by the Company. The Company is also subject to inflationary pressures on printing, paper, transportation and labor costs. While the Company has taken steps to manage and budget for certain expected operating cost increases, if there is a significant disruption in the supply of paper or a significant increase in paper costs, or in its shipping or fuel costs, beyond those currently anticipated, which would generally be beyond the control of the Company, or if the Company’s strategies to try to manage these costs, including additional cost savings initiatives, are ineffective, the Company’s results of operations could be adversely affected. In addition, the bankruptcy of a supplier may result in unanticipated price increases for the Company.
Previous wording
The Company continues to explore opportunities to enhance the efficiency of its cost and organizational structure, which includes actions to restructure its cost base. The rapidly changing environment in which the Company operates increases the risk that not all of the Company's strategic initiatives will deliver the expected benefits within the anticipated timeframes. The Company's ability to achieve certain of the anticipated cost savings could be dependent on the use of AI and other technologies and the Company may not be successful implementing such technologies. In addition, these efforts may disrupt business activities or the ability of the Company to take advantage of potential growth opportunities, which could adversely affect the Company's business prospects, financial condition, and performance.
Current wording
The Company continues to explore opportunities to enhance the efficiency of its cost and organizational structure, which includes actions to restructure its cost base. The rapidly changing environment in which the Company operates increases the risk that not all of the Company's strategic initiatives will deliver the expected benefits within the anticipated timeframes. The Company's ability to achieve certain of the anticipated cost savings could be dependent on the use of artificial intelligence ("AI") and other technologies and the Company may not be successful implementing such technologies. In addition, these efforts may disrupt business activities or the ability of the Company to take advantage of potential growth opportunities, which could adversely affect the Company's business prospects, financial condition, and performance.
Previous wording
The media and content industry in which the Company's entertainment business operates is rapidly evolving, including the market and demand for film and television content, with the entrance of new major streaming platforms and consolidation of traditional platforms, as well as the changing viewing habits of children and youth. While the Company believes that the demand for high-quality content will continue, industry trends may continue to change and the Company's entertainment business may be adversely affected by such changing industry trends, including potential impacts of mergers and acquisitions in the industry. There can be no certainty that demand for content will be sustained over the long term, that consumers will have an appetite for the programming produced by the
Current wording
Company believes that the demand for high-quality content will continue, industry trends may continue to change and the Company's entertainment business may be adversely affected by such changing industry trends, including potential impacts of mergers and acquisitions in the industry. There can be no certainty that demand for content will be sustained over the long term, that consumers will have an appetite for the programming produced by the Company's entertainment business or that the Company will be able to identify and be responsive to new content trends.
Previous wording
The Company has recorded a significant amount of goodwill and other identifiable intangible assets as a result of acquisitions. At May 31, 2025, there was $198.9 million of goodwill and $87.9 million of intangible assets on the Company's Consolidated Balance Sheet. The intangible assets are principally composed of customer lists, customer contracts/relationships, intellectual property, trade names and internally developed software. Failure to achieve business objectives and financial projections could result in asset impairments, which would result in noncash charges to the Company's Consolidated Statement of Operations. Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis and when events or changes in circumstances indicate that impairment may have occurred. Intangible assets with definite lives, which were $85.8 million at May 31, 2025, are tested for impairment only when events or changes in circumstances indicate that an impairment may have occurred. Determining whether an impairment exists can be difficult as a result of increased uncertainty and requires management to make significant estimates and judgments. A noncash intangible asset impairment charge could have a material adverse effect on the Company's financial position and results of operations. See Note 12, “Goodwill and Other Intangibles” of Notes to Consolidated Financial Statements in Item 8, “Consolidated Financial Statements and Supplementary Data” for further information related to goodwill and intangible assets.
Current wording
The Company has recorded a significant amount of goodwill and other identifiable intangible assets as a result of acquisitions. At May 31, 2026, there was $199.4 million of goodwill and $77.9 million of intangible assets on the Company's Consolidated Balance Sheet. The intangible assets are principally composed of customer lists, customer contracts/relationships, intellectual property, trade names and internally developed software. Failure to achieve business objectives and financial projections could result in asset impairments, which would result in noncash charges to the Company's Consolidated Statement of Operations. Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis and when events or changes in circumstances indicate that impairment may have occurred. Intangible assets with definite lives, which were $75.8 million at May 31, 2026, are tested for impairment only when events or changes in circumstances indicate that an impairment may have occurred. Determining whether an impairment exists can be difficult as a result of increased uncertainty and requires management to make significant estimates and judgments. A noncash intangible asset impairment charge could have a material adverse effect on the Company's financial position and results of operations. See Note 13, “Goodwill and Other Intangibles” of Notes to Consolidated Financial Statements in Item 8, “Consolidated Financial Statements and Supplementary Data” for further information related to goodwill and intangible assets.
Previous wording
The Company operates in highly competitive markets that are subject to rapid change, including, in particular, changes in customer preferences and changes and advances in relevant technologies, including rapid advances in artificial intelligence (“AI”). There are substantial uncertainties associated with the Company’s efforts to develop successful trade publishing, educational, and media products and services, including digital products and services, for its customers, as well as to adapt its print and other materials to new digital technologies, such as the internet cloud technologies, tablets, mobile and other devices and school-based technologies and uncertainties involving the use of AI in connection with the foregoing. The Company makes significant investments in new products and services that may not be profitable, or whose profitability may be significantly lower than the Company anticipates or has experienced historically. In particular, in the context of the Company’s current focus on key digital opportunities, the markets are continuing to develop and the Company may be unsuccessful in establishing itself as a significant factor in any relevant market segment which does develop. Many aspects of markets which could develop for children and schools, such as the nature of the relevant software and devices or hardware, the size of the market, relevant methods of delivery and relevant content, as well as pricing models, are still evolving and will, most likely, be subject to change on a recurring basis until a pattern develops and becomes more defined. This could specifically impact the Company's ability to execute on a digital and print literacy solution, which requires a multi-year investment, through internal development, third party providers and/or acquisitions. In addition, the Company faces market risks associated with systems development and service delivery in its evolving school ordering and ecommerce businesses, as well as in responding to changes in how schools plan to utilize technology for virtual or remote learning and the potential impact on the demand for printed materials in schools.
Current wording
The Company operates in highly competitive markets that are subject to rapid change, including, in particular, changes in customer preferences and changes and advances in relevant technologies, including rapid advances in AI. There are substantial uncertainties associated with the Company’s efforts to develop successful trade publishing, educational, and media products and services, including digital products and services, for its customers, as well as to adapt its print and other materials to new digital technologies, such as the internet cloud technologies, tablets, mobile and other devices and school-based technologies, as well as uncertainties involving the use of AI in connection with the foregoing. The Company makes significant investments in new products and services that may not be profitable, or whose profitability may be significantly lower than the Company anticipates or has experienced historically. In particular, in the context of the Company’s current focus on key digital opportunities, the markets are continuing to develop and the Company may be unsuccessful in establishing itself as a significant factor in any relevant market segment which does develop. Many aspects of markets which could develop for children and schools, such as the nature of the relevant software and devices or hardware, the size of the market, relevant methods of delivery and relevant content, as well as pricing models, are still evolving and will, most likely, be subject to change on a recurring basis until a pattern develops and becomes more defined. This could specifically impact the Company's ability to execute on a digital and print literacy solution, which requires a multi-year investment, through internal development, third party providers and/or acquisitions. In addition, the Company faces market risks associated with systems development and service delivery in its evolving school ordering and ecommerce businesses, as well as in responding to changes in how schools plan to utilize technology for virtual or remote learning and the potential impact on the demand for printed materials in schools.
Previous wording
The Company’s distribution channels include online retailers and ecommerce sites, digital delivery platforms and expanding social media and other marketing platforms. An increased concentration of retailer power has also resulted in the increased importance of mass merchandisers as well as of publishing best sellers to meet consumer demand. Currently, the Company’s top five trade customers make up approximately 75% of the Company’s U.S. trade business and 16% of the Company’s total revenues. Adverse changes in the mix of the major customers of the trade business, including the type of customer, which may also be engaged in a competitive business, or in their purchasing patterns or financial condition or the nature of their distribution arrangements with the trade business including any requirements related to environmental sustainability with which the Company must comply could negatively affect the profitability of the Company’s trade business and the Company’s financial performance.
Current wording
The Company’s distribution channels include online retailers and ecommerce sites, digital delivery platforms and expanding social media and other marketing platforms. An increased concentration of retailer power has also resulted in the increased importance of mass merchandisers as well as of publishing best sellers to meet consumer demand. Currently, the Company’s top five U.S. trade customers make up approximately 74% of the Company’s U.S. trade business and 15% of the Company’s total revenues. Adverse changes in the mix of the major customers of the trade business, including the type of customer, which may also be engaged in a competitive business, or in their purchasing patterns or financial condition or the nature of their distribution arrangements with the trade business including any requirements related to environmental sustainability with which the Company must comply could negatively affect the profitability of the Company’s trade business and the Company’s financial performance.
Previous wording
In certain of its businesses the Company holds or has access to personal data, including that of customers or received from schools. Adverse publicity stemming from a data breach, whether or not valid, could reduce demand for the Company’s products or adversely affect its relationship with teachers or educators, impacting participation in the book fairs or book clubs components of the Company's reading events business or decisions to purchase educational materials or programs produced by the Company's Education Solutions segment. Further, a failure to adequately protect personal data, including that of customers or children, or other data security failure, such as cyber-attacks from third parties, could lead to legal actions, fines and penalties, significant remediation costs and reputational damage, including loss of future business.
Current wording
In certain of its businesses the Company holds or has access to personal data, including that of customers or received from schools. Adverse publicity stemming from a data breach, whether or not valid, could reduce demand for the Company’s products or adversely affect its relationship with teachers or educators, impacting participation in the book fairs or book clubs components of the Company's reading events business or decisions to purchase educational materials or programs produced by the Company's Education segment. Further, a failure to adequately protect personal data, including that of customers or children, or other data security failure, such as cyber-attacks from third parties, could lead to legal actions, fines and penalties, significant remediation costs and reputational damage, including loss of future business.
Previous wording
In the ordinary course of our business, we collect and store in our internal and external data centers, cloud services and networks sensitive data, including but not limited to personal information of our customers, including information received from children. The Company is subject to privacy laws and regulations in the conduct of its business in the United States and in other jurisdictions in which it conducts its international operations, many of which vary significantly, relating to the collection and use of personal information, including the European Union General Data Protection Regulation, which became enforceable on May 25, 2018, and the California Consumer Privacy Act, which became effective in January 2020. Following California’s lead, similar consumer data privacy laws have been passed, and either are in effect or will become effective within the next 12 months in 17 other states.
Current wording
In the ordinary course of our business, we collect and store in our internal and external data centers, cloud services and networks sensitive data, including but not limited to personal information of our customers, including information received from children. The Company is subject to privacy laws and regulations in the conduct of its business in the United States and in other jurisdictions in which it conducts its international operations, many of which vary significantly, relating to the collection and use of personal information. Significant regulations include the European Union General Data Protection Regulation, which became enforceable on May 25, 2018, and the California Consumer Privacy Act, which became effective in January 2020. As of 2026, approximately 20 states have enacted comprehensive consumer privacy laws, with additional amendments and new requirements continuing to take effect.
Previous wording
The Company operates in multiple countries and is subject to different regulations throughout the world. In the United States, the Company is regulated by the Internal Revenue Service, the Securities and Exchange Commission, the Federal Trade Commission and other regulating bodies. Failure to comply with these regulators, including providing these regulators with accurate financial and statistical information that often is subject to estimates and assumptions, or the high cost of complying with relevant regulations, including a significant increase in new regulations resulting from changes in the regulatory environment, could negatively impact the Company. The Company is also subject to the risk that it is unable to comply with the unstandardized, rapidly-changing environmental requirements imposed internationally by local governments, including those related to measuring and reporting on the impact its business has on the environment, which could negatively impact the Company's ability to conduct business in the related country if not met.
Current wording
The Company operates in multiple countries and is subject to different regulations throughout the world. In the United States, the Company is regulated by the Internal Revenue Service, the Securities and Exchange Commission, the Federal Trade Commission and other regulating bodies. Failure to comply with these regulators, including providing these regulators with accurate financial and statistical information that often is subject to estimates and assumptions, or the high cost of complying with relevant regulations, including a significant increase in new regulations resulting from changes in the regulatory environment, could negatively impact the Company.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The media and content industry in which the Company's entertainment business operates is rapidly evolving, including the market and demand for film and television content, with the entrance of new major streaming platforms and consolidation of traditional platforms, as well as the changing viewing habits of children and youth. While the
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Company, or if the Company’s strategies to try to manage these costs, including additional cost savings initiatives, are ineffective, the Company’s results of operations could be adversely affected. In addition, the bankruptcy of a supplier may result in unanticipated price increases for the Company.
Previous report — wording carried elsewhere
Company's entertainment business or that the Company will be able to identify and be responsive to new content trends.