Led by a 14% increase in its children’s book publishing and distribution business, revenue at Scholastic rose 7% in the second quarter ended November 30, 2014, compared to the same period last year.
Sales hit $665.6 million, up from $623.2 million a year ago. Net income in the quarter rose to $68.5 million from $58.3 million in last year’s second quarter. Earnings in both periods include one-time charges, including a $900,000 charge reflecting severance payments and a $2.9 million charge associated with its decision to close its retail store in New York City in January. The company plans to reconfigure the ground floor of its headquarters building in New York to add a retail component.
The sales increase in the children’s book publishing & distribution segment was driven by a 33% gain in the sale in its book cub unit where sales hit $129.6 million. According to Scholastic, new marketing programs have led to, higher engagement levels of both teachers and parents, which in turn has meant a higher number of orders. In book fairs, revenue increased 8% to $217.4 million, reflecting higher revenue per fair and an increase in the number of fairs held in the 2014 quarter. The successful Minecraft handbook series helped drive a 6% increase in revenues in the trade segment.
Scholastic’s educational technology and services segment was the quarter’s weakest performer with sales down 16%, to $50.9 million. Lower sales of educational technology products in the current quarter were partially offset by gains in technology support and product dependent services, Scholastic reported. Sales in Scholastic’s international group fell 2%, to $132.8 million, due primarily due to unfavorable exchange rates that dropped sales by $5.4 million. Higher local currency sales in the United Kingdom, Australia, the Asia-Pacific region and Export were partially offset by lower revenues in Canada due largely to the effect of a teachers' strike in British Columbia early in the quarter.
In the classroom and supplemental materials publishing group sales increased 6%, and revenue rose 6% in the media, licensing and advertising segment.
For the first half of fiscal 2015, revenue was up 6%, to $949.4 million, and net income rose 22%, to $34.4 million
