Revenue at Scholastic rose 24%, to $344.5 million, for the third quarter ended February 28, 2022, over the prior year period. The company also cut the quarterly operating loss from $24.2 million in last year’s third quarter to $19.5 million.
Scholastic said that, with schools returning to in-classroom learning, the school channels drove a majority of the sales increase, with more in-person book fairs and better than expected revenue per fair as well as higher sales of its core instructional products and sales of Scholastic Magazines.
As they recovered from the lows of the pandemic, sales from book fairs skyrocketed 181% in the quarter, to $76 million. The number of fairs continues to be about 70% of the number held during the pre-Covid third quarter of fiscal 2020, and Scholastic said enhanced marketing initiatives have help to lift revenue per fair. Book club revenue increased 15%, to $40.5 million, and Scholastic attributed part of the gain to fulfilling backlog orders from the previous quarter. Trade sales increased 5%, to $84.5 million, as several of the company’s series continued to do well.
Sales in the company’s educational solutions group rose 16% in the quarter, to $77.2 million. International sales, however, fell 3%, to $66.3 million, due to a combination of a $1.6 million unfavorable impact from foreign exchange and lower sales in Asia because of Covid restrictions and what the company called "recently adopted restrictive regulations in China." Sales in Canada, the U.K., and Australia/New Zealand, all major markets for the publisher, were up.
Scholastic expects the favorable sales trends to continue in its fourth quarter, but acknowledged that it is keeping an eye on cost pressures for paper, printing, and freight as well as higher labor and fuel costs. In a conference call with analysts, CFO Ken Cleary said higher product costs for printing, paper, and inbound freight have increased Scholastic’s per-unit cost by approximately 15% for purchases made this year. He also pointed to a 20% increase in labor costs for warehouse workers and drivers. While Scholastic continues to look for ways to keep costs under control, Cleary acknowledged that “we'll also be reviewing pricing as appropriate.”
