News

Potter Powers Scholastic
Jim Milliot -- 9/25/00
Total revenues up 99% to $362.1 million for the first quarter


Financial magic.
The one-two punch of the July release of Harry Potter and the Goblet of Fire and inclusion of results from the Grolier purchase pushed total revenues at Scholastic up 99% to $362.1 million for the first quarter ended August 31, 2000. Net loss in the quarter dropped to $10.6 million from $23.6 million in last year's first period.
Revenues in the children's book publishing and distribution group jumped 165% to $206.6 million as the Potter titles contributed revenues of $90 million compared to $15 million in the comparable quarter in fiscal 2000. Scholastic estimates that Potter trade sales will represent 8% to 10% of total revenues in fiscal 2001 compared to 5% to 6% last year. The division also benefited from $38.2 million in additional revenue from the Grolier home book clubs.

Revenues in the educational publishing group rose 65%, to $93.7 million, led by a 50% increase in sales in its core curriculum products and $12 million from Grolier reference sales. International sales increased 33%, to $51.6 million, aided by an 11% increase in Canadian sales and $13.9 million in sales from Grolier's product abroad. In all, Grolier contributed $65.8 million in revenues in the quarter.

Toys R Us Deal
Scholastic also announced last week that it has reached an agreement with Toys R Us under which the publisher will establish Scholastic boutiques in 1,215 Toys R Us and Imaginarium stores worldwide. Rollout is set for fall 2001. The boutiques will feature Scholastic-branded arts and crafts materials, activity toys, puzzles, games, building and construction products, role-playing items, school supplies and electronic learning aids.

Approximately 40 products are expected to be featured in next year's launch and Deborah Forte, Scholastic executive v-p and head of Scholastic entertainment, said she hopes to get that number up to 150 within the next few years. All the products will be developed exclusively for the Toys R Us boutiques, although Scholastic will have the right to distribute them through selected distribution outlets. Books are not a featured part of the program. "This is a branding initiative that we see as a way to connect with families at retail with products that will support children's learning," Forte told PW.