Scholastic Inc has reported an overall 13% drop in sales for its fiscal year, despite a 41% uplift in revenue for its final quarter.
For the year ending 31st May 2021, the company experienced an overall 13% decline of $186.8m (£135.9m) as compared to the prior year, at a total of $1.3bn. This has been attributed to lower sales in the company’s book fairs channels in the US and abroad as a result of Covid-related restrictions.
The company also recorded an operating loss of $22.7m (£16.5m), which was a $65.8m (£47.9m) and 74% improvement as compared to an operating loss of $88.5m (£64.4m) in the prior year. However, excluding one-time items, Scholastic had operating income of $39m (£28.4m) in fiscal year 2021, versus an operating loss of $32.3m (£23.5m) in fiscal year 2020.
Revenues were up 41% in the final quarter, rising to $401.4m (£292.1m) compared with last year’s $284m (£206.7m), in the period ending 31st May 2020.
James Barge, speaking on behalf of Scholastic’s board of directors, said: “In the fourth quarter, Scholastic’s businesses showed dramatically improved results on both the top and bottom lines, even as educators around the globe still struggled with transitioning their students safely back to the classroom. Management’s decisive actions, taken throughout the difficult 2021 fiscal year, and our employees’ disciplined execution helped to successfully weather the adverse impacts of the pandemic on the company’s end markets and supply chain. Our strength in execution was most evident in our positive free cashflow generation and improved operating margins, which resulted in meaningful year-over-year growth in adjusted EBITDA, despite a drop in full year revenues. These results are particularly bittersweet in light of last month’s unexpected passing of Scholastic’s long-time leader, Dick Robinson, and we acknowledge his stalwart vision and remarkable stewardship in achieving these outcomes, as well as the culture he built.”
The Covid-related decline in school book fairs held was partially offset by strong core frontlist sales of trade titles, the company said. Top-selling trade titles included Dav Pilkey’s Dog Man: Mothering Heights, Tui T Sutherland's The Dangerous Gift, Maggie Stiefvater's Mister Impossible (The Dreamer Trilogy), and Ann M Martin and Gabriela Epstein's Babysitters Club graphic novel Claudia and the New Girl. A tougher trade comparison in the last quarter of the fiscal year was the result of the release of Suzanne Collins' blockbuster bestseller The Ballad of Songbirds and Snakes, the fourth title in The Hunger Games series in the fourth quarter of the prior year period, the company noted.
Iole Lucchese, executive vice-president and chief strategy officer, said: “Despite having to take difficult, but carefully measured cost actions in response to a 13% decline in sales in the year, Scholastic continued to make important investments related to its key growth initiatives with a focus on: book fairs recovery; new education solutions, including digital products and early childhood programmes; increasing parent access to the company’s e-commerce platforms; English-language learning in Asia; and the acquisition and development of content for our trade and media operations, as well as in technology to improve our systems and processes. These initiatives are the underpinnings of Scholastic’s growth strategy for fiscal 2022 and beyond.
“In this coming school year, it is clear that many students, not just the most vulnerable, and their teachers will need additional support. Scholastic will be a strong partner in literacy and education as we always have for more than 100 years, proudly extending Dick Robinson’s accomplished vision, a core element of our success, as we maintain our focus on supporting our customers in this changing environment.”