Gains in its educational technology group were not enough to offset declines in the children’s book publishing and distribution unit resulting in a 5.8% decline in total sales at Scholastic for the first quarter ended August 31. Still, the company cut its net loss in the period to $29.9 million from $32.1 million in the first quarter of fiscal 2013. Costs cuts were cited as the primary reason for the smaller loss. To account for its cost-saving initiatives, Scholastic took a pretax severance charge of $2 million in the quarter.
In the children's book publishing and distribution segment, revenue in the first quarter was $54.6 million, down from $70.9 million in the prior year period. Expected declines in sales of the Hunger Games were partially offset by strong sales of frontlist titles, Scholastic said. Within the group, trade sales fell 29%, book club revenue fell 16%, and fair sales rose 2%. Sales in the educational technology and services group rose 19%, to $94.8 million driven by “robust sales” of System 44 Next Generation, MATH 180, Common Core Code X and iRead products, the company reported.
Sales in the classroom and supplemental materials publishing division were roughly flat at $37.8 million, while sales in the media, licensing and advertising group fell to $10.4 million from $14.4 million. International group sales fell to $78.7 million, from $90.2 million in the prior year period, as higher sales in Asia were partially offset by lower sales of The Hunger Games in the UK and Canada, Scholastic reported.
