Books Lead Scholastic

Jim Milliot |

Oct 02, 2000

News
Books Lead Scholastic Jim Milliot -- 10/2/00 Operating profit at Scholastic's children's book publishing and distribution segment soared 51.5% to $169.6 million for the fiscal year ended May 31, 2000, the company said in its annual report. The segment was by far the company's most profitable division; operating profit in the international group was $6.4 million, while the educational group reported a loss of $10.7 million, and the media, licensing, advertising group had a $10.3 million loss. Earlier this year, Scholastic reported that total revenues increased 20% to $1.40 billion, led by a 30.8% increase in the children's book publishing group (News, July 24). Within the children's book publishing group, sales through the trade distribution channel jumped 103% to $230 million, led by sales of the first three Harry Potter titles. Despite the rapid growth in the trade channel, book clubs remain Scholastic's largest marketing avenue with sales up 16.4% last year to $327 million due to higher orders and more revenue per order. Sales in the school book fairs segment increased 18.1% to $235 million, while sales in the home continuity division rose 8.8% to $73 million. The company's only other profitable segment, international, benefited from strong gains in the trade, book club and book fair operations in Canada (where sales rose 30%) and Australia (sales up 14%), which offset a sales decline in the U.K. During the year, Scholastic opened a new international subsidiary in Argentina to help increase its presence in the Spanish-language market. Scholastic said the $10.7 million loss in its educational group was due to promotion and selling costs associated with the Texas reading adoption campaign and launch costs for Read 180, a reading intervention program. The higher loss in the media, licensing and advertising group to $10.3 million was due primarily to investments in developing Scholastic.com. Among the upgrades set for the Web site are greater e-commerce capabilities for both teachers and parents. By fall, Scholastic expects to permit teachers to order titles from the company's book clubs off the site, and later in the fiscal year it plans to offer more materials for teachers to buy from the site. In early fiscal 2001, Scholastic expects to have a home learning services site through which parents can buy recommended products.

News

Books Lead Scholastic
Jim Milliot -- 10/2/00

Operating profit at Scholastic's children's book publishing and distribution segment soared 51.5% to $169.6 million for the fiscal year ended May 31, 2000, the company said in its annual report. The segment was by far the company's most profitable division; operating profit in the international group was $6.4 million, while the educational group reported a loss of $10.7 million, and the media, licensing, advertising group had a $10.3 million loss. Earlier this year, Scholastic reported that total revenues increased 20% to $1.40 billion, led by a 30.8% increase in the children's book publishing group (News, July 24).

Within the children's book publishing group, sales through the trade distribution channel jumped 103% to $230 million, led by sales of the first three Harry Potter titles. Despite the rapid growth in the trade channel, book clubs remain Scholastic's largest marketing avenue with sales up 16.4% last year to $327 million due to higher orders and more revenue per order. Sales in the school book fairs segment increased 18.1% to $235 million, while sales in the home continuity division rose 8.8% to $73 million.

The company's only other profitable segment, international, benefited from strong gains in the trade, book club and book fair operations in Canada (where sales rose 30%) and Australia (sales up 14%), which offset a sales decline in the U.K. During the year, Scholastic opened a new international subsidiary in Argentina to help increase its presence in the Spanish-language market.

Scholastic said the $10.7 million loss in its educational group was due to promotion and selling costs associated with the Texas reading adoption campaign and launch costs for Read 180, a reading intervention program. The higher loss in the media, licensing and advertising group to $10.3 million was due primarily to investments in developing Scholastic.com. Among the upgrades set for the Web site are greater e-commerce capabilities for both teachers and parents. By fall, Scholastic expects to permit teachers to order titles from the company's book clubs off the site, and later in the fiscal year it plans to offer more materials for teachers to buy from the site. In early fiscal 2001, Scholastic expects to have a home learning services site through which parents can buy recommended products.

A version of this article appeared in the 10/02/2000 issue of Publishers Weekly under the headline: