Citing lower sales of its educational technology products, Scholastic reported a small drop in third quarter sales for the period ended February 28, 2014, and a higher operating loss compared to a year ago. Total revenue fell to $373.5 million, from $378.6 million in the third quarter of fiscal 2013, and the operating loss was $34.3 million, up from $27.4 million in last year's quarter.
Scholastic chairman Dick Robinson said part of the reason for the drop in educational revenue was the integration of the division's sales force with that of the classroom supplementary group, a consolidation, Robinson said, that is now largely complete.
Children's book publishing and distribution group sales rose 1% to $190.0 million, compared to $187.5 million in the prior year period. Book fair revenue increased by 3%, reflecting higher revenue per fair compared to the prior year period. This increase came despite lower attendance in certain regions due to harsh weather conditions, Scholastic said. Book club revenue rose 9% in the quarter. Trade division revenue declined 12% compared to the prior year period, which benefited from a favorable return reserve adjustment, according to Scholastic. Trade revenues reflected strong sales of new titles including Minecraft: Essential Handbook, and LEGO®: The LEGO Movie, as well as the release of the second installment of the New York Times bestselling multiplatform Spirit Animals series.
Robinson said that despite the softer than expected quarter, Scholastic remains on track to hit its financial targets for fiscal 2014, which includes revenue of $1.8 billion.
