Scholastic Corp. ( SCHL ) shares fell after the company reported a wider fiscal 2026 first-quarter loss and results that missed Wall Street expectations on revenue and earnings.

Adjusted loss per share was $2.52, missing the consensus estimate of $2.44, while sales of $225.6 million came in below expectations of $238.91 million.

Revenue declined 5% from $237.2 million a year ago, pressured by weaker Education Solutions sales in a volatile funding environment. GAAP net loss widened to $71.1 million, or $2.83 per diluted share, compared with a net loss of $62.5 million, or $2.21 per share, in the prior-year period. Adjusted EBITDA improved 8% to a loss of $55.7 million.

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Children’s Book Publishing and Distribution revenue rose 4% to $109.4 million. Book Fairs revenue climbed 18% to $34.1 million, while Book Clubs revenue fell 33% to $1.8 million. Trade revenue was nearly flat at $73.5 million. The segment reported an operating loss of $35.1 million, narrowing from $36.6 million a year earlier.

Education Solutions revenue dropped 28% to $40.1 million as schools and districts delayed or reduced purchases. Segment operating loss widened to $21.2 million from $17.0 million.

Entertainment revenue fell 18% to $13.6 million due to production delays. Segment operating loss expanded to $4.0 million from $0.5 million, reflecting higher amortization expenses related to the 9 Story Media Group acquisition.

Excluding favorable foreign currency exchange of $0.2 million, International revenue increased 4% to $59.4 million, led by gains in Australia, the U.K., and Asia. The operating loss narrowed to $4.2 million from $8.3 million.

Cash used in operating activities totaled $81.8 million, compared with $41.9 million in the prior-year period. Free cash use rose to $100.2 million from $68.7 million, while net debt climbed to $242.8 million from $152.1 million.

Scholastic paid $5.2 million in dividends and had $70 million remaining under its share repurchase authorization.

Scholastic declared a quarterly cash dividend of 20 cents per share, payable on December 15, 2025, to all shareholders of record as of the close of business on October 31, 2025.

“Scholastic made steady progress in the first quarter of fiscal 2026, advancing strategic initiatives across all segments,” President and CEO Peter Warwick said. “Fall book fair bookings are encouraging and exceed prior year bookings, with signs of strong engagement with our book fair hosts.”

“With a sharpened strategy, valuable IP, and a focus on operational discipline, we are affirming our fiscal 2026 guidance, confident in our ability to deliver long-term growth and impact,” Warwick added.

The company reaffirmed its fiscal 2026 guidance and said processes to explore potential sale-leasebacks of owned real estate assets are expected to conclude this fall.

Price Action: SCHL shares were trading lower by 10.68% to $24.60 premarket at last check Friday.

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