Scholastic Corporation reported a decline in financial performance for the second quarter of fiscal 2025, with revenues of $544.6 million, down 3% from $562.6 million in the same quarter of the previous year. The company experienced a significant drop in net income, which fell to $48.8 million, or $1.71 per diluted share, compared to $76.9 million, or $2.45 per diluted share, in the prior year. For the first half of the fiscal year, Scholastic recorded a net loss of $13.7 million, contrasting with a net income of $2.7 million in the same period last year.
The decrease in revenue was primarily attributed to lower performance in the Children's Book Publishing and Distribution segment, which saw a $25.4 million decline due to timing-related revenue shifts and reduced book fair revenues. The Education Solutions segment also faced challenges, with revenues down by $9.8 million as school districts focused on new core programs, leading to decreased spending on supplemental materials. However, the newly formed Entertainment segment contributed positively, generating $16.8 million in revenue, a significant increase from $0.4 million in the prior year, largely due to the acquisition of 9 Story Media Group.
In terms of operational metrics, the company reported a total of 90,000 book fairs expected for the fiscal year, with a fair count for the fall season anticipated to exceed the previous year. The Entertainment segment's growth is expected to continue as Scholastic leverages its intellectual property across various platforms. The company also noted an increase in selling, general, and administrative expenses, which rose to $224.9 million for the quarter, primarily due to the integration of 9 Story and severance costs related to cost-saving initiatives.
Looking ahead, Scholastic anticipates that upcoming product releases, including new titles from popular series, will bolster revenues in the latter half of the fiscal year. The company is also focused on developing new supplemental products for schools, set to launch for the 2025/2026 school year. Despite the current challenges, Scholastic's management remains optimistic about the potential for growth in its Entertainment segment and the overall recovery of its core publishing and education businesses.
About SCHOLASTIC CORP
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