SCHOLASTIC CORP
For the period ended Aug 31, 2026. Filed Sep 25, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2026 · Filed Sep 25, 2026
SCHL$37.20+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-02-28; filed 2026-03-20.
0000866729-26-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-31; filed 2026-09-25.
0000866729-26-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe 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 94 previous paragraphs and 64 current paragraphs.
22 unchanged; 21 reworded; 19 added; 46 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (19)
Current report
First quarter results reflected the seasonal summer slowdown in School Reading Events, with book fair bookings for the fall season ahead of the prior year period. The trade channel benefited from the release of the paperback edition of Sunrise on the Reaping in August and is expected to benefit from new releases this fall, including Dav Pilkey’s Dog Man®: Sprinkle in Timeand tie-in publishing related to the new Harry Potter® HBO series and the film adaptation of Sunrise on the Reaping. Entertainment continued to expand production activity, driving higher revenues and improved operating profitability. In Education, continued pressure on school and district budgets impacted sales, while ongoing cost alignment and transformation initiatives are expected to support improved performance. Operating loss was consistent with the prior fiscal year quarter, as higher costs resulting from the fiscal 2026 sale-leaseback transactions were offset by improved profitability in Entertainment and International.
Current report
Cost of goods sold for the quarter ended August 31, 2026 was $118.1 million, or 54.5% of revenues, compared to $123.5 million, or 54.7% of revenues, in the prior fiscal year quarter. The decrease in Cost of Goods sold as a percentage of revenues was primarily attributable to lower product costs resulting from tariff refunds received during the quarter ended August 31, 2026, largely benefiting the U.S. book fairs channel. This benefit was partially offset by higher product and royalty costs within Education, increased production amortization within Entertainment and higher postage costs in the Major Markets driven by rising fuel prices. Fuel costs are not expected to materially impact the Company’s financial results, although sustained increases in fuel prices could result in higher cost of goods sold in future periods.
Current report
center, partially offset by lower severance expense of $6.3 million in the quarter ended August 31, 2026 related to cost-saving initiatives, coupled with lower marketing expenses related to sponsored programs in Education.
Current report
Revenues for the quarter ended August 31, 2026 decreased by $3.6 million to $105.8 million, compared to $109.4 million in the prior fiscal year quarter. Trade channel revenues decreased $3.0 million, primarily reflecting a co-edition sale in the prior fiscal year quarter that did not recur in the quarter ended August 31, 2026, partially offset by higher sales resulting from the release of the paperback edition of Sunrise on the Reaping and foil editions of certain Dog Man® titles. Revenues from School Reading Events decreased $0.6 million. Revenues from School Reading Events are generally not significant in the first fiscal quarter as most schools are not in session.
Current report
Cost of goods sold for the quarter ended August 31, 2026 was $55.4 million, or 52.4% of revenues, compared to $62.2 million, or 56.9% of revenues, in the prior fiscal year quarter. The decrease in Cost of goods sold as a percentage of revenues was driven by tariff refunds received during the quarter ended August 31, 2026, primarily benefiting the book fairs channel, partially offset by higher postage costs in the trade channel.
Current report
Other operating expenses for the quarter ended August 31, 2026 increased by $7.1 million to $88.6 million compared to $81.5 million in the prior fiscal year quarter. The increase in Other operating expenses was primarily driven by higher rent expense associated with the Company's leased headquarters and primary distribution facilities following the sale-leaseback transactions completed in the third quarter of fiscal 2026, as well as higher employee-related expenses.
Current report
Segment operating loss for the quarter ended August 31, 2026 increased by $3.1 million to $38.2 million, compared to $35.1 million in the prior fiscal year quarter. The increase was primarily attributable to higher rent and employee-related expenses, partially offset by tariff refunds received during the quarter ended August 31, 2026.
Current report
Education
Current report
Revenues for the quarter ended August 31, 2026 decreased by $9.7 million to $30.4 million, compared to $40.1 million in the prior fiscal year quarter. The decrease in segment revenues was primarily driven by lower sales of supplemental curriculum products related to continued pressure on school and district spending.
Current report
Other operating expenses for the quarter ended August 31, 2026 decreased by $3.1 million to $38.9 million, compared to $42.0 million in the prior fiscal year quarter. The decrease in Other operating expenses was primarily attributable to lower marketing expenses related to sponsored programs, in addition to the benefits from previous reorganizations and cost-savings initiatives.
Current report
Segment operating loss for the quarter ended August 31, 2026 increased by $2.1 million to $23.3 million, compared to an operating loss of $21.2 million in the prior fiscal year quarter. The increase was primarily attributable to lower revenues reflecting the continued pressure on school and district spending.
Current report
Revenues for the quarter ended August 31, 2026 increased by $6.5 million to $20.1 million, compared to $13.6 million in the prior fiscal year quarter. The increase in segment revenues was primarily driven by higher
Current report
production revenues resulting from an increase in episodic deliveries compared to the prior fiscal year quarter, as well as higher production services and distribution revenues.
Current report
Cost of goods sold for the quarter ended August 31, 2026 was $12.0 million, or 59.7% of revenues, compared to $8.1 million, or 59.6% of revenues, in the prior fiscal year quarter. Higher production amortization and production costs were offset by lower distribution costs.
Current report
Cost of goods sold for the quarter ended August 31, 2026 was $36.1 million, or 59.7% of revenues, compared to $35.4 million, or 59.6% of revenues, in the prior fiscal year quarter. Cost of goods sold as a percentage of revenues increased primarily due to higher freight and postage costs in the Major Markets resulting from rising fuel prices, largely offset by lower product costs driven by the mix of products sold in Australia and the U.K. during the quarter ended August 31, 2026.
Current report
Other operating expenses for the quarter ended August 31, 2026 decreased by $0.9 million to $27.3 million, compared to $28.2 million in the prior fiscal year quarter. The decrease in Other operating expenses was attributable to lower overhead costs, reflecting the benefits of operational efficiencies and previously implemented cost-saving initiatives.
Current report
Segment operating loss for the quarter ended August 31, 2026 was $2.9 million, compared to an operating loss of $4.2 million in the prior fiscal year quarter. The $1.3 million improvement was attributable to lower operating expenses resulting from operational efficiencies and previously implemented cost-saving initiatives.
Current report
Cash used in operating activities was $94.6 million for the three months ended August 31, 2026, compared to $81.8 million for the prior fiscal year quarter, representing an increase in cash used in operating activities of $12.8 million. The increase was primarily attributable to lower cash remittances received in the quarter ended August 31, 2026, coupled with higher rent payments and the loss of rental income as a result of the sale-leaseback transactions. This was partially offset by lower payments for royalty advances and lower inventory purchases.
Current report
Cash used in investing activities was $17.3 million for the three months ended August 31, 2026, compared to $14.9 million in the prior fiscal year quarter, representing an increase in cash used in investing activities of $2.4 million. The increase was primarily due to higher capital expenditures during the three months ended August 31, 2026, related to the purchase of point-of-sale equipment for the book fairs channel.
Removed paragraphs (46)
Previous report
During the third fiscal quarter, the Company closed on the sale and leaseback transactions related to its headquarters in New York City and distribution center in Jefferson City, which resulted in pre-tax net proceeds of $452.4 million and a pre-tax gain on sale of $118.2 million. The Company used this capital to repay borrowings under its U.S. Credit Agreement and return value to shareholders through open-market share repurchases while continuing to invest in initiatives that support long-term growth.
Previous report
Within Children's Book Publishing and Distribution, School Reading Events continued to outpace the prior period, driven by higher revenue per fair. Trade channel revenues reflected the shift in timing of the Dog Man® publication, with year-to-date results remaining in line with the prior fiscal year period. The trade channel is expected to benefit from new releases in the fourth fiscal quarter including Wings of Fire #16: The Hybrid Prince, published in early March, and Captain Underpants: The First Epic Manga to be published in April. Education Solutions continued to be impacted by the challenging funding market for schools and districts, however, the segment benefited from its lower cost structure which resulted in improved profitability in the third fiscal quarter. The Entertainment segment continued to expand its pipeline of media development and production and remains well-positioned for growth as industry greenlight activity improves. International results reflected the expected impact of the Dog Man publication timing in the Major Markets and the continued benefit of operational efficiencies. The Company remains focused on growth and margin improvement in its international operations.
Previous report
Revenues for the nine months ended February 28, 2026 decreased by $11.4 million to $1,105.8 million, compared to $1,117.2 million in the prior fiscal year period. Revenues in the Children's Book Publishing and Distribution segment increased by $12.2 million, driven by increased revenues from School Reading Events as a result of higher fair count and increased revenue per fair as well as increased redemptions of book fair incentive program credits. In the Education Solutions segment, revenues decreased by $25.7 million, primarily due to the continued challenging funding market for schools and school districts which resulted in lower sales of supplemental curriculum products and lower subscription revenues from Magazines+. In the Entertainment segment, revenues decreased by $1.5 million, primarily reflecting lower production and distribution revenues. In local currency, International segment revenues increased by $1.6 million, primarily driven by higher sales in Australia, Asia and the U.K. International segment revenues were also impacted by favorable foreign exchange of $3.2 million in the period ended February 28, 2026. In addition, rental income decreased $1.2 million from the
Previous report
prior fiscal year period as a result of the sale and leaseback of the Company's headquarters in New York City as the Company no longer owns the leasable space.
Previous report
Cost of goods sold for the quarter ended February 28, 2026 was $150.3 million, or 45.7% of revenues, compared to $154.6 million, or 46.1% of revenues, in the prior fiscal year quarter. The decrease in Cost of Goods sold as a percentage of revenues was primarily driven by improved utilization of inventory in the U.S. book fairs channel which resulted in less excess and obsolete inventory, in addition to lower freight costs in the Company's international Major Markets. Royalty costs were also lower as a result of a decrease in the mix of higher-royalty bearing titles sold in the U.S. trade channel in the quarter ended February 28, 2026, partially offset by higher sales of royalty-bearing titles in Australia. This was partially offset by increased tariff charges, primarily in the U.S. book fairs channel, coupled with increased production costs from higher production services revenue in Entertainment and higher shipping and postage costs related to sponsored programs in Education Solutions.
Previous report
Cost of goods sold for the nine months ended February 28, 2026 was $499.4 million, or 45.2% of revenues, compared to $511.5 million, or 45.8% of revenues, in the prior fiscal year period. The decrease in Cost of goods sold as a percentage of revenues was primarily driven by improved utilization of inventory in the U.S. book fairs and book clubs channels which resulted in less excess and obsolete inventory, in addition to lower freight costs in the Company's international Major Markets. This was partially offset by increased tariff charges, primarily in the U.S. book fairs channel. The Company is evaluating the potential impact of a recent U.S. Supreme Court ruling pertaining to tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA). The Company estimates that approximately $9 million of its tariff payments are subject to this ruling, however, no amounts have been recognized to date. The ultimate timing and amount of any refund remain uncertain.
Previous report
Selling, general and administrative expenses for the nine months ended February 28, 2026 decreased to $587.5 million, compared to $594.5 million in the prior fiscal year period. The $7.0 million decrease was primarily attributable to lower employee-related and external labor costs resulting from the Company's previous reorganization efforts and cost-saving initiatives and lower spending on general overhead expenses. This was partially offset by increased severance expense related to cost-saving initiatives of $5.7 million in the period ended February 28, 2026 and higher rent expense as a result of the sale and leaseback of the Company's headquarters in New York City.
Previous report
Depreciation and amortization expense for the quarter ended February 28, 2026 decreased by $4.0 million to $12.9 million, compared to $16.9 million in the prior fiscal year quarter. Depreciation and amortization expense
Previous report
Asset impairments for the nine months ended February 28, 2026 were $9.4 million. The Company recognized asset impairments of $3.4 million related to certain products within the Education Solutions segment, $5.2 million primarily related to certain film and television programs in development within the Entertainment segment and $0.8 million related to a product that is no longer being sold within the Children's Book Publishing and Distribution segment. Asset impairments for the three and nine months ended February 28, 2025 were $0.3 million and $0.4 million, respectively, primarily related to the early exit of leased office space within the Entertainment segment.
Previous report
Gain on sale and leaseback transactions for the three and nine months ended February 28, 2026 was $119.8 million and $118.2 million, respectively. During the third quarter of fiscal 2026, the Company completed the sale and leaseback transactions related to its headquarters in New York City and primary distribution center in Jefferson City, Missouri. The Company recognized a pre-tax gain of $118.2 million, which included certain transaction costs of $1.6 million incurred during the second quarter of fiscal 2026.
Previous report
Net income for the nine months ended February 28, 2026 increased by $64.6 million to $47.3 million, compared to a net loss of $17.3 million in the prior fiscal year period. Earnings per basic and diluted share of Class A and Common Stock was $1.91 and $1.87, respectively, for the period ended February 28, 2026, compared to a loss per basic and diluted share of $0.61 in the prior fiscal year period.
Previous report
Revenues for the quarter ended February 28, 2026 decreased by $5.7 million to $197.6 million, compared to $203.3 million in the prior fiscal year quarter. Trade channel revenues decreased $7.7 million, primarily due to the shift in timing of the Dog Manpublication which occurred in the second fiscal quarter compared to the third fiscal quarter in the prior year. Revenues from School Reading Events increased $2.0 million, driven by higher revenue per fair in the book fairs channel. Revenues from the book clubs channel were relatively consistent with the prior fiscal year quarter.
Previous report
Revenues for the nine months ended February 28, 2026 increased by $12.2 million to $687.9 million, compared to $675.7 million in the prior fiscal year period. Revenues from School Reading Events increased $12.7 million, driven by higher fair count and increased revenue per fair in the book fairs channel, coupled with increased redemptions of book fair incentive program credits. This was partially offset by lower book clubs channel revenues primarily due to lower sponsor participation. Trade channel revenues were relatively consistent with the prior fiscal year period, decreasing $0.5 million, with continued success in the Hunger Games®, Harry Potter® and Dog Manfranchises.
Previous report
Cost of goods sold for the quarter ended February 28, 2026 was $83.7 million, or 42.4% of revenues, compared to $92.0 million, or 45.3% of revenues, in the prior fiscal year quarter. The decrease in Cost of goods sold as a percentage of revenues was primarily driven by lower royalty costs as a result of a decrease in the mix of higher-royalty bearing titles sold in the trade channel in the quarter ended February 28, 2026, coupled with improved utilization of inventory in the book fairs channel which resulted in less excess and obsolete inventory. This was partially offset by increased tariff charges, primarily in the book fairs channel.
Previous report
Cost of goods sold for the nine months ended February 28, 2026 was $292.4 million, or 42.5% of revenues, compared to $294.2 million, or 43.5% of revenues, in the prior fiscal year period. Cost of goods sold benefited from improved utilization of inventory in the book fairs and book clubs channels resulting in less excess and obsolete inventory, partially offset by increased tariff charges, primarily in the book fairs channel.
Previous report
Other operating expenses for the nine months ended February 28, 2026 increased by $3.7 million to $312.1 million, compared to $308.4 million in the prior fiscal year period. The increase in Other operating expenses was primarily attributable to inflationary pressures and higher expected credit losses on customer receivables.
Previous report
Segment operating income for the quarter ended February 28, 2026 increased by $1.3 million to $8.9 million, compared to $7.6 million in the prior fiscal year quarter. The improvement was primarily attributable to favorable cost of goods sold as a result of lower royalty costs in the trade channel, coupled with improved utilization of inventory in the book fairs channel which resulted in less excess and obsolete inventory.
Previous report
Segment operating income for the nine months ended February 28, 2026 increased by $9.5 million to $82.6 million, compared to $73.1 million in the prior fiscal year period. The improvement was primarily attributable to increased revenues from the book fairs channel, coupled with favorable cost of goods sold as a result of improved utilization of inventory in the book fairs and book clubs channels resulting in less excess and obsolete inventory.
Previous report
Education Solutions
Previous report
Revenues for the quarter ended February 28, 2026 decreased by $1.1 million to $56.1 million, compared to $57.2 million in the prior fiscal year quarter. The decrease in segment revenues was primarily driven by lower sales of supplemental curriculum products resulting from the continued challenging funding market for schools and school districts, coupled with lower subscription revenues from Magazines+. This decline was partially offset by increased revenues from sponsored programs in the quarter ended February 28, 2026.
Previous report
Revenues for the nine months ended February 28, 2026 decreased by $25.7 million to $158.4 million, compared to $184.1 million in the prior fiscal year period. The decrease in segment revenues was primarily driven by lower sales of supplemental curriculum products due to the continued challenging funding market for schools and school districts, coupled with lower subscription revenues from Magazines+. Revenues from sponsored programs were relatively consistent with the prior fiscal year period.
Previous report
Cost of goods sold for the quarter ended February 28, 2026 was $23.2 million, or 41.4% of revenues, which was comparable to $23.0 million, or 40.2% of revenues, in the prior fiscal year quarter. Cost of goods sold as a percentage of revenues increased due to higher shipping and postage costs related to sponsored programs.
Previous report
Other operating expenses for the quarter ended February 28, 2026 decreased by $3.0 million to $38.1 million, compared to $41.1 million in the prior fiscal year quarter. Other operating expenses for the nine months ended February 28, 2026 decreased by $11.0 million to $119.8 million, compared to $130.8 million in the prior fiscal year period. The decrease in Other operating expenses was primarily attributable to lower employee-related and external labor costs and reduced spending on general overhead expenses.
Previous report
Asset impairments for the nine months ended February 28, 2026 were $3.4 million. During the second quarter of fiscal 2026, the Company recognized asset impairments of $3.4 million related to certain education products. Refer to Note 5, "Asset Write Down," of Notes to the Consolidated Financial Statements in Item 8, "Consolidated Financial Statements and Supplementary Data" for further details.
Previous report
Segment operating loss for the quarter ended February 28, 2026 decreased by $1.7 million to $5.2 million, compared to an operating loss of $6.9 million in the prior fiscal year quarter. The improvement was primarily attributable to lower employee-related and external labor costs as well as reduced spending on general overhead expenses.
Previous report
Segment operating loss for the nine months ended February 28, 2026 increased by $6.7 million to $31.1 million, compared to an operating loss of $24.4 million in the prior fiscal year period. The overall decline was driven by lower revenues and the asset impairments recognized during the period ended February 28, 2026, partially offset by lower employee-related and external labor costs as well as reduced spending on general overhead expenses.
Previous report
The Entertainment segment includes the operations of 9 Story, as acquired on June 20, 2024, and Scholastic Entertainment Inc. ("SEI"). Refer to Note 9 "Acquisitions," of Notes to the Consolidated Financial Statements in Item 8, "Consolidated Financial Statements and Supplementary Data" for further details regarding the acquisition of 9 Story.
Previous report
Revenues for the quarter ended February 28, 2026 increased by $3.2 million to $16.0 million, compared to $12.8 million in the prior fiscal year quarter. The increase in segment revenues was primarily driven by higher production revenues from services and an increase in episodic deliveries as compared to the prior fiscal year quarter.
Previous report
Revenues for the nine months ended February 28, 2026 decreased by $1.5 million to $44.7 million, compared to $46.2 million in the prior fiscal year period. The decrease in segment revenues was primarily driven by lower production revenues as a result of fewer episodic deliveries as compared to the prior fiscal year period and lower distribution revenues. This was partially offset by increased revenues from production services.
Previous report
Cost of goods sold for the quarter ended February 28, 2026 was $9.3 million, or 58.1% of revenues, compared to $7.2 million, or 56.3% of revenues, in the prior fiscal year quarter. The increase in Cost of goods sold as a percentage of revenues was primarily driven by the revenue mix between production services and episodic deliveries as there is a higher cost associated with production services.
Previous report
Cost of goods sold for the nine months ended February 28, 2026 was $26.2 million, or 58.6% of revenues, compared to $26.1 million, or 56.5% of revenues, in the prior fiscal year period. The increase in Cost of goods sold as a percentage of revenues was primarily driven by the increase in production services revenues which have a higher cost compared to production revenues related to episodic deliveries.
Previous report
Other operating expenses for the three and nine months ended February 28, 2026 were $10.2 million and $29.8 million, respectively, which were comparable to $9.2 million and $28.9 million, respectively, in the prior fiscal year periods.
Previous report
Asset impairments for the nine months ended February 28, 2026 were $5.2 million. During the second quarter of fiscal 2026, the Company recognized asset impairments of $4.9 million related to certain film and television programs in development and $0.3 million related to its ownership interest in a children's book publishing business located in the UK. Refer to Note 5, "Asset Write Down," of Notes to the Consolidated Financial Statements in Item 8, "Consolidated Financial Statements and Supplementary Data" for further details.
Previous report
Asset impairments for the three and nine months ended February 28, 2025 were $0.3 million. The Company early exited certain leased office space as a result of which the Company recognized an impairment expense of $0.3 million in the third quarter of fiscal 2025, primarily related to the right-of-use asset associated with the operating leases.
Previous report
Segment operating loss for the nine months ended February 28, 2026 was $16.5 million compared to $9.1 million in the prior fiscal year period. The $7.4 million increase in operating loss was primarily driven by lower production and distribution revenues, coupled with the asset impairments recognized during the period ended February 28, 2026.
Previous report
Revenues for the nine months ended February 28, 2026 increased by $4.8 million to $207.6 million, compared to $202.8 million in the prior fiscal year period. Local currency revenues across the Company's foreign operations increased by $1.6 million, excluding favorable foreign exchange impact of $3.2 million. In Asia, local currency revenues increased $1.8 million, primarily driven by increased trade and education sales, which included growth in India. In Australia and New Zealand, local currency revenues increased $1.6 million, primarily driven by increased trade channel sales in Australia, partially offset by lower education sales in New Zealand. In the U.K., local currency revenues increased $0.7 million, primarily attributable to increased trade channel sales, coupled with increased book fairs channel sales on higher fair count. In addition, export channel sales increased $0.3 million compared to the prior fiscal year period. The overall increase in segment revenues was partially offset by a $2.8 million decrease in local currency revenues in Canada, primarily driven by lower book clubs and trade channel sales.
Previous report
Cost of goods sold for the quarter ended February 28, 2026 was $35.3 million, or 60.1% of revenues, compared to $33.8 million, or 57.0% of revenues, in the prior fiscal year quarter. The increase in Cost of goods sold as a percentage of revenues was driven by higher royalty costs in Australia due to an increase in the mix of higher-royalty bearing titles sold in the trade channel, partially offset by lower freight costs in the Company's Major Markets.
Previous report
Cost of goods sold for the nine months ended February 28, 2026 was $118.6 million, or 57.1% of revenues, compared to $118.0 million, or 58.2% of revenues. Cost of goods sold as a percentage of revenues decreased as a result of lower freight costs in the Company's Major Markets.
Previous report
Other operating expenses for the quarter ended February 28, 2026 were $28.1 million, compared to $27.6 million in the prior fiscal year quarter. Excluding unfavorable foreign exchange of $1.5 million, Operating expenses decreased $1.0 million primarily due to lower employee-related costs in Canada, the U.K. and Asia.
Previous report
Other operating expenses for the nine months ended February 28, 2026 were $85.5 million, compared to $89.5 million in the prior fiscal year period. Excluding unfavorable foreign exchange of $1.5 million, Other operating expenses decreased $5.5 million primarily driven by lower employee-related costs, primarily in Canada, the U.K.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (21)
Previous wording
Revenues for the third quarter ended February 28, 2026 were $329.1 million, compared to $335.4 million in the prior fiscal year quarter, a decrease of $6.3 million or 2%. The Company reported net income per diluted share of Class A and Common Stock of $2.55 in the third quarter of fiscal 2026, compared to net loss per diluted share of $0.13 in the prior fiscal year quarter.
Current wording
Revenues for the first quarter ended August 31, 2026 were $216.8 million, compared to $225.6 million in the prior fiscal year quarter, a decrease of $8.8 million or 4%. The Company reported net loss per diluted share of Class A and Common Stock of $3.77 in the first quarter of fiscal 2027, compared to net loss per diluted share of $2.83 in the prior fiscal year quarter.
Previous wording
Revenues for the quarter ended February 28, 2026 decreased by $6.3 million to $329.1 million, compared to $335.4 million in the prior fiscal year quarter. Within the Children's Book Publishing and Distribution segment, revenues decreased by $5.7 million, driven by lower trade channel revenues reflecting the shift in timing of the Dog Manpublication which occurred in the second fiscal quarter compared to the third fiscal quarter in the prior year, partially offset by increased revenues from School Reading Events as a result of higher revenue per fair. In the Education Solutions segment, revenues decreased by $1.1 million, primarily driven by lower sales of supplemental curriculum products and lower subscription revenues from Magazines+, partially offset by increased revenues from sponsored programs. In the Entertainment segment, revenues increased by $3.2 million, reflecting higher production revenues from episodic deliveries and services. In local currency, International segment revenues decreased by $4.1 million, primarily driven by lower trade channel sales in the U.K.and Canada due, in part, to the timing shift of the Dog Man publication, coupled with lower education sales in New Zealand. International segment revenues were impacted by favorable foreign exchange of $3.5 million in the quarter ended February 28, 2026. In addition, rental income decreased $2.1 million from the prior fiscal year quarter as a result of the sale and leaseback of the Company's headquarters in New York City as the Company no longer owns the leasable space.
Current wording
Revenues for the quarter ended August 31, 2026 decreased by $8.8 million to $216.8 million, compared to $225.6 million in the prior fiscal year quarter. Within the Children's Book Publishing and Distribution segment, revenues decreased by $3.6 million, primarily driven by a co-edition sale in the trade channel in the prior fiscal year quarter that did not repeat in the quarter ended August 31, 2026. In the Education segment, revenues decreased by $9.7 million, driven by lower sales of supplemental curriculum products related to continued pressure on school and district spending. In the Entertainment segment, revenues increased by $6.5 million, reflecting higher production revenues from episodic deliveries and services. Excluding favorable foreign exchange of $1.2 million, International segment revenues were consistent with the prior year, decreasing by $0.1 million. In addition, rental income, recorded in the Overhead, decreased $3.1 million from the prior fiscal year quarter as a result of the sale-leaseback of the Company's headquarters in New York City completed during fiscal 2026 after which the Company no longer owned the leasable space.
Previous wording
Components of Cost of goods sold for the three and nine months ended February 28, 2026 and February 28, 2025 are as follows:
Current wording
Components of Cost of goods sold for the quarter ended August 31, 2026 and August 31, 2025 are as follows:
Previous wording
Selling, general and administrative expenses for the quarter ended February 28, 2026 increased to $192.8 million, compared to $187.5 million in the prior fiscal year quarter. The $5.3 million increase was primarily attributable to higher rent expense as a result of the sale and leaseback of the Company's headquarters in New York City, partially offset by lower severance expense of $0.6 million in the quarter ended February 28, 2026 related to cost-saving initiatives.
Current wording
Selling, general and administrative expenses for the quarter ended August 31, 2026 increased to $178.3 million, compared to $177.2 million in the prior fiscal year quarter. The $1.1 million increase was primarily attributable to higher rent expense as a result of the sale-leaseback of the Company's headquarters and primary distribution
Previous wording
for the nine months ended February 28, 2026 decreased by $2.8 million to $45.7 million, compared to $48.5 million in the prior fiscal year period. The decrease in Depreciation and amortization expense was primarily attributable to the sale of the Company's headquarters in New York City and distribution center in Jefferson City.
Current wording
Depreciation and amortization expense for the quarter ended August 31, 2026 decreased by $3.7 million to $12.6 million, compared to $16.3 million in the prior fiscal year quarter. The decrease in Depreciation and amortization expense was primarily attributable to the sale of the Company's headquarters and primary distribution center during the third quarter of fiscal 2026.
Previous wording
Interest expense for the three and nine months ended February 28, 2026 was $1.9 million and $12.5 million, respectively, compared to $4.7 million and $13.4 million, respectively, in the prior fiscal year periods. The decrease in interest expense was due to repayments of borrowings under the U.S. Credit Agreement during the period ended February 28, 2026.
Current wording
Interest expense for the quarter ended August 31, 2026 was $2.3 million, compared to $5.0 million in the prior fiscal year quarter. The decrease in interest expense was attributable to lower average borrowings outstanding under the U.S. Credit Agreement during the period ended August 31, 2026, as the Company used proceeds from the sale-leaseback transactions to repay outstanding borrowings.
Previous wording
Interest income for the three and nine months ended February 28, 2026 was $1.1 million and $2.2 million, compared to $0.4 million and $1.7 million, respectively, in the prior fiscal year periods. The increase in interest income was attributable to higher average short term investment balances in the period ended February 28, 2026 resulting from the net proceeds received from the sale and leaseback transactions. The Company invests excess cash in short term investments which earn competitive interest rates that change directionally in relation to the Federal Funds rate.
Current wording
Interest income for the quarter ended August 31, 2026 was $0.7 million, compared to $0.5 million, in the prior fiscal year quarter. The increase in interest income was attributable to higher average short term investment balances in the period ended August 31, 2026. The Company invests excess cash in short term investments which earn competitive interest rates that change directionally in relation to the Federal Funds rate.
Previous wording
The Company's interim effective tax rate, inclusive of discrete items, for the three and nine months ended February 28, 2026 was 31.9% and 33.1%, respectively, compared to 87.3% and 65.5%, respectively, for the prior fiscal year periods. The interim effective tax rate for the nine months ended February 28, 2026 varies from the statutory rate primarily due to non-deductible compensation for covered executive employees and expected state and local income tax.
Current wording
The Company's interim effective tax rate, inclusive of discrete items, for the quarter ended August 31, 2026 was 24.0%, compared to 26.7% for the prior fiscal year quarter. The interim effective tax rate for the quarter ended August 31, 2026 varied from the statutory rate primarily due to non-deductible compensation for covered executive employees, expected state and local income tax and the Foreign-Derived Intangible Income (FDII) deduction.
Previous wording
Net income for the quarter ended February 28, 2026 increased by $66.1 million to $62.5 million, compared to a net loss of $3.6 million in the prior fiscal year quarter. Earnings per basic and diluted share of Class A and Common Stock were $2.61 and $2.55, respectively, for the fiscal quarter ended February 28, 2026, compared to a loss per basic and diluted share of $0.13 in the prior fiscal year quarter.
Current wording
Net loss for the quarter ended August 31, 2026 increased by $0.1 million to $71.2 million, compared to a net loss of $71.1 million in the prior fiscal year quarter. Loss per basic and diluted share of Class A and Common Stock was $3.77 for the fiscal quarter ended August 31, 2026, compared to a loss per basic and diluted share of $2.83 in the prior fiscal year quarter.
Previous wording
Asset impairments for the nine months ended February 28, 2026 were $0.8 million. During the first quarter of fiscal 2026, the Company recognized an asset impairment of $0.8 million related to a certain product that is no longer being sold. Refer to Note 5, "Asset Write Down," of Notes to the Consolidated Financial Statements in Item 8, "Consolidated Financial Statements and Supplementary Data" for further details.
Current wording
Asset impairments for the quarter ended August 31, 2025 were $0.8 million. The Company recognized an asset impairment of $0.8 million related to a certain product that is no longer being sold.
Previous wording
Cost of goods sold for the nine months ended February 28, 2026 was $66.3 million, or 41.9% of revenues, compared to $77.7 million, or 42.2% of revenues, in the prior fiscal year period. Cost of goods sold as a percentage of revenues decreased due to lower product costs associated with the mix of products sold during the period ended February 28, 2026, partially offset by higher shipping and postage costs related to sponsored programs.
Current wording
Cost of goods sold for the quarter ended August 31, 2026 was $14.8 million, or 48.7% of revenues, which was comparable to $19.3 million, or 48.1% of revenues, in the prior fiscal year quarter. Cost of goods sold as a percentage of revenues increased due to higher product and royalty costs associated with the mix of products sold during the quarter ended August 31, 2026, partially offset by lower prepublication amortization resulting from certain product impairments recognized in fiscal 2026.
Previous wording
Other operating expenses for the quarter ended February 28, 2026 were $105.0 million which were comparable to $103.7 million in the prior fiscal year quarter.
Current wording
Other operating expenses for the quarter ended August 31, 2026 were $9.9 million, which were comparable to $9.5 million, in the prior fiscal year quarter.
Previous wording
Segment operating loss for the quarter ended February 28, 2026 was $3.5 million compared to $3.9 million in the prior fiscal year quarter. The $0.4 million improvement was primarily driven by the increased revenues during the quarter ended February 28, 2026.
Current wording
Segment operating loss for the quarter ended August 31, 2026 was $1.8 million compared to $4.0 million in the prior fiscal year quarter. The $2.2 million improvement was primarily driven by increased revenues during the quarter ended August 31, 2026.
Previous wording
Revenues for the quarter ended February 28, 2026 decreased by $0.6 million to $58.7 million, compared to $59.3 million in the prior fiscal year quarter. Local currency revenues across the Company's foreign operations decreased by $4.1 million, excluding favorable foreign exchange impact of $3.5 million. In the U.K., local currency revenues decreased $1.7 million, primarily within the trade channel reflecting the shift in timing of the Dog Manpublication which occurred in the second fiscal quarter compared to the third quarter in the prior fiscal year. In Canada, local currency revenues decreased $1.7 million, primarily driven by lower trade channel sales due, in part, to the timing of the Dog Man publication, partially offset by increased book fairs channel sales. In Australia and New Zealand, local currency revenues decreased $0.9 million, primarily driven by lower education sales in New Zealand, partially offset by increased trade channel sales in Australia. In Asia, local currency revenues were consistent with the prior year quarter, increasing $0.2 million. In addition, export channel sales were consistent with the prior fiscal year quarter.
Current wording
Revenues for the quarter ended August 31, 2026 increased by $1.1 million to $60.5 million, compared to $59.4 million in the prior fiscal year quarter. Excluding favorable foreign exchange impact of $1.2 million, local currency revenues across the Company's foreign operations were consistent with the prior fiscal year quarter, decreasing by $0.1 million. In Canada, local currency revenues increased $1.2 million, primarily driven by higher trade channel sales. In Asia, local currency revenues increased $0.7 million, driven by continued growth in India, primarily within the trade channel. In addition, export channel sales increased $0.2 million compared to the prior fiscal year quarter. These revenue increases were offset by lower local currency revenues in Australia and New Zealand of $1.9 million, primarily driven by lower trade channel sales in Australia as the prior year benefited from increased sales from the Dog Man® series and the release of Sunrise on the Reaping. In the U.K., local currency revenues decreased $0.3 million, primarily driven by lower sales in the trade and education channels.
Previous wording
Unallocated overhead expense for the quarter ended February 28, 2026 increased by $3.8 million to $22.4 million, from $18.6 million in the prior fiscal year quarter. The increase was primarily attributable to the impact of the sale and leaseback transactions which resulted in lower rental income and higher rent expense, partially offset by lower depreciation expense.
Current wording
Unallocated overhead expense for the quarter ended August 31, 2026 decreased by $1.7 million to $26.0 million, from $27.7 million in the prior fiscal year quarter. The decrease was primarily attributable to $6.4 million of lower severance expense related to cost-saving initiatives, substantially offset by the impact of the sale-leaseback transactions completed during the third quarter of fiscal 2026. These transactions resulted in lower rental income and higher rent expense, partially offset by lower depreciation expense.
Previous wording
The Company’s Children’s Book Publishing and Distribution school-based book club and book fair channels and most of its Education Solutions businesses operate on a school-year basis; therefore, the Company’s business is highly seasonal. As a result, the Company’s revenues in the first and third quarters of the fiscal year generally are lower than its revenues in the other two fiscal quarters. Typically, school-based channels and magazine revenues are minimal in the first quarter of the fiscal year as schools are not in session. Education channel revenues are generally higher in the fourth quarter. Trade channel and Entertainment segment revenues can vary throughout the year due to the timing of published titles' release dates and program production deliveries and the start dates of distribution license agreements.
Current wording
The Company’s Children’s Book Publishing and Distribution school-based book club and book fair channels and most of its Education businesses operate on a school-year basis; therefore, the Company’s business is highly seasonal. As a result, the Company’s revenues in the first and third quarters of the fiscal year generally are lower than its revenues in the other two fiscal quarters. Typically, school-based channels and magazine revenues are minimal in the first quarter of the fiscal year as schools are not in session. Education channel revenues are generally higher in the fourth quarter. Trade channel and Entertainment segment revenues can vary throughout the year due to the timing of published titles' release dates and program production deliveries and the start dates of distribution license agreements.
Previous wording
Cash used in financing activities was $386.9 million for the nine months ended February 28, 2026, compared to cash provided by financing activities of $197.6 million for the prior fiscal year period, representing an increase in cash used in financing activities of $584.5 million. The increase in cash used was primarily attributable to net repayments on borrowings under the U.S. Credit Agreement of $250.0 million in the nine months ended February 28, 2026 funded by the proceeds from the sale and leaseback transactions, compared to net borrowings of $275.0 million in the prior fiscal year period in which the Company incurred increased borrowings to fund the 9 Story acquisition. In addition, the Company repurchased $127.2 million of common stock in the nine months ended February 28, 2026, compared to $40.0 million of common stock repurchases in the prior fiscal year period. This was partially offset by an increase in net repayments of film related obligations of $17.7 million.
Current wording
Cash provided by financing activities was $83.9 million for the three months ended August 31, 2026, compared to $66.8 million for the prior fiscal year quarter, representing an increase in cash provided by financing activities of $17.1 million. The increase was primarily attributable to higher net borrowings under the U.S. Credit Agreement of $25.0 million in the three months ended August 31, 2026, coupled with $7.1 million in higher net proceeds from stock option exercises. The increase also reflected lower net repayments of film related obligations of $5.4 million and lower dividend payments of $1.4 million. These increases were partially offset by $25.3 million of common stock repurchases in the three months ended August 31, 2026, compared to no repurchases in the prior fiscal year quarter.
Previous wording
The Company’s cash and cash equivalents totaled $104.6 million at February 28, 2026, $124.0 million at May 31, 2025 and $94.7 million at February 28, 2025. Cash and cash equivalents held by the Company’s U.S. operations totaled $41.6 million at February 28, 2026, $48.7 million at May 31, 2025 and $41.0 million at February 28, 2025. Due to the seasonal nature of its business as discussed under “Seasonality”, the Company usually experiences negative cash flows in the June through September time period.
Current wording
The Company’s cash and cash equivalents totaled $106.8 million at August 31, 2026, $134.9 million at May 31, 2026 and $94.3 million at August 31, 2025. Cash and cash equivalents held by the Company’s U.S. operations totaled $45.7 million at August 31, 2026, $66.6 million at May 31, 2026 and $28.6 million at August 31, 2025. Due to the seasonal nature of its business as discussed under “Seasonality”, the Company usually experiences negative cash flows in the June through September time period.
Previous wording
The Company’s operating philosophy is to use cash provided by operating activities to create value by paying down debt, reinvesting in existing businesses and, from time to time, making acquisitions that will complement its portfolio of businesses or acquiring other strategic assets, as well as engaging in shareholder enhancement initiatives such as share repurchases and dividend declarations. Under the Company's open-market buy-back program, $19.5 million remained available for future purchases of common shares as of February 28, 2026. Subsequent to February 28, 2026, the Board authorized an increase of $297.0 million for common stock repurchases, resulting in a current Board authorization of $300.0 million, which includes the remaining amount from the previous Board authorization, less repurchases of $16.5 million made subsequent to February 28, 2026. See Note 20, "Subsequent Events," of Notes to the Financial Statements - Unaudited in Item 1, "Financial Statements," for more information regarding the increased authorization.
Current wording
The Company’s operating philosophy is to use cash provided by operating activities to create value by paying down debt, reinvesting in existing businesses and, from time to time, making acquisitions that will complement its portfolio of businesses or acquiring other strategic assets, as well as engaging in shareholder enhancement initiatives such as share repurchases and dividend declarations. Under the Company's buy-back program, $157.4 million remained available for future purchases of common shares as of August 31, 2026.
Previous wording
The Company has maintained, and expects to maintain for the foreseeable future, sufficient liquidity to fund ongoing operations, including working capital requirements, pension contributions, postretirement benefits, debt service, planned capital expenditures and other investments, as well as dividends and share repurchases. As of February 28, 2026, the Company’s primary sources of liquidity consisted of cash and cash equivalents of $104.6 million, cash from operations and the Company's U.S. Credit Agreement. See Note 6, "Debt," of Notes to the Financial Statements - Unaudited in Item 1, "Financial Statements," for more information regarding the U.S. Credit Agreement. The Company expects the U.S. Credit Agreement to provide it with an appropriate level of flexibility to strategically manage its business operations. The Company's U.S. Credit Agreement, less commitments of $0.4 million, has $399.6 million of availability at February 28, 2026. Additionally, the Company has short-term credit facilities of $38.1 million, less current borrowings of $5.6 million and commitments of $3.6 million, resulting in $28.9 million of current availability under these facilities at February 28, 2026. Accordingly, the Company believes these sources of liquidity are sufficient to finance its currently anticipated ongoing operating needs, as well as its financing and investing activities.
Current wording
The Company has maintained, and expects to maintain for the foreseeable future, sufficient liquidity to fund ongoing operations, including working capital requirements, pension contributions, postretirement benefits, debt service, planned capital expenditures and other investments, as well as dividends and share repurchases. As of August 31, 2026, the Company’s primary sources of liquidity consisted of cash and cash equivalents of $106.8 million, cash from operations and the Company's U.S. Credit Agreement. See Note 5, "Debt," of "Notes to Condensed Consolidated Financial Statements - Unaudited" in Item 1, "Financial Statements," for more information regarding the U.S. Credit Agreement. The Company expects the U.S. Credit Agreement to provide it with an appropriate level of flexibility to strategically manage its business operations. The Company's U.S. Credit Agreement, less commitments of $0.4 million, has $224.6 million of availability at August 31, 2026. Additionally,
Previous wording
Reference is made to Note 1 of Notes to Financial Statements - unaudited in Item 1, “Financial Statements,” for information concerning recent accounting pronouncements since the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2025.
Current wording
Reference is made to Note 1 of "Notes to Condensed Consolidated Financial Statements - Unaudited" in Item 1, “Financial Statements,” for information concerning recent accounting pronouncements since the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Asset impairments for the quarter ended August 31, 2025 were $0.8 million. The Company recognized an asset impairment of $0.8 million related to a product that is no longer being sold within the Children's Book Publishing and Distribution segment.
Current report — wording carried from elsewhere
the Company has short-term credit facilities of $36.0 million, less current borrowings of $9.8 million and commitments of $5.0 million, resulting in $21.2 million of current availability under these facilities at August 31, 2026. Accordingly, the Company believes these sources of liquidity are sufficient to finance its currently anticipated ongoing operating needs, as well as its financing and investing activities.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
SCHOLASTIC CORPORATIONItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
Previous report — wording carried elsewhere
SCHOLASTIC CORPORATIONItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
Previous report — wording carried elsewhere
SCHOLASTIC CORPORATIONItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
Previous report — wording carried elsewhere
SCHOLASTIC CORPORATIONItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
Previous report — wording carried elsewhere
SCHOLASTIC CORPORATIONItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)