Led by a 14% increase in revenue in its trade division, total sales at Scholastic rose 2% in the fiscal year ended May 31, 2016, over fiscal 2015. Revenue rose $1.67 billion in the year.
Earnings from continuing operations increased to $44.0 million from $15.5 million in the prior year. Net income in fiscal 2015 was $294.6 million (compared to $40.5 million in fiscal 2016), but the 2015 figure included a one-time gain of $275.6 million from the sale of Scholastic's educational technology group to Houghton Mifflin Harcourt.
The 14% rise in trade sales, to $211 million, was due to gains in Scholastic’s “core publishing” the company said, including increases in its frontlist and backlist sales, and gains in Harry Potter revenue. Book fair revenue rose 5%, to $520.4 million, but sales through the book clubs dropped 2%, to $275 million. Overall, revenue in the children’s book publishing and distribution group increased 5% over fiscal 2015 to just over $1.0 billion.
In the education group, sales rose 8% in the year to $298.1 million, compared to $275.9 million a year ago. Sales of classroom books and magazines were both up in the year.
Revenue in the international group was impacted by the negative affect of currency exchange which shaved $43.2 million from reported sales, which fell to $372.2 million, compared to $401.2 million in the prior year.
Looking at fiscal 2017, Scholastic said it expects revenue to be between $1.7 billion and $1.8 billion, driven by the July release of the new Harry Potter book, Harry Potter and the Cursed Child. The publisher also has high hopes for the publication of the Fantastic Beasts and Where to Find Them original screenplay book, by Potter creator J. K. Rowling.
Overseas, the company is planning for growth in trade publishing and education, and expects significant local currency gains across all channels in Asia. Scholastic expects earnings per diluted share in the range of $1.60 to $1.70, excluding one-time items, as increased operating profits are reduced on an after-tax basis due to a higher effective tax rate in the new fiscal year.
