The addition of the 9 Story Media Group was the major factor in bumping up sales at Scholastic by 4% in the quarter ended August 31, 2024. Total company sales were $237.2 million, compared to $228.5 million a year ago, and the operating loss fell to $88.5 million, from $99.1 million in the first quarter of fiscal 2024.
Scholastic acquired the Toronto-based production and animation company this spring, as part of its strategy to monetize its content through different platforms. To that end, Scholastic formed a new entertainment group by combining 9 Story with Scholastic Entertainment. The new division saw first quarter sales of $16.6 million, due in part to the launch of the Magic School Bus channel on Tubi and the Clifford Classic channel on YouTube. The launch of those two channels, Scholastic CEO Peter Warwick told analysts in a conference call, are examples of how Scholastic aims to realize its goal of blending its print and media properties to drive growth.
Sales in Scholastic’s largest division, its children’s book publishing and distribution group, rose 3%, to $105.4 million. Within the group, the company’s trade revenues were up 2% over fiscal 2024, to $73.9 million. The increase was primarily driven by higher foreign rights revenues, which were partly offset by lower frontlist sales compared to the prior year, when the paperback edition of The Ballad of Songbirds and Snakes was released, Scholastic reported.
With schools not in session for most of its first quarter, Scholastic’s school reading events business, which combines book fairs with the much smaller book clubs, had modest sales of $31.5 million, marking a 5% increase over last year. Scholastic expects to hold more than 90,000 fairs in the fiscal year and, while that is an increase over fiscal 2024, Warwick acknowledged that Scholastic is expecting only modest revenue-per-fair growth due to financial pressures facing many consumers.
Sales in the educational solutions group declined 16%, to $55.7 million, which Scholastic attributed to lower sales of supplemental curriculum products, and sales in the international group were flat, at $57 million. Scholastic executives noted that the first quarter had no surprises—and that being the case, CFO Haji Glover told analysts, the company continues to expect revenues to increase between 4% to 6% over fiscal 2024, with adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to be between $140 million to $150 million.
