Scholastic (SCHL) Q4 Earnings: Revenue Miss but EPS Hits Target Amid Ongoing Transformation
Key Takeaways
- Revenue missed consensus: Q4 revenue of $476.1 million fell roughly 7.9% below analyst estimates of approximately $517 million, declining 6% year-over-year.
- Adjusted EPS matched expectations: Adjusted diluted earnings per share came in at $2.19, precisely in line with Wall Street consensus, more than doubling from $0.87 a year ago.
- Full-year adjusted EBITDA rose 4%: Fiscal 2026 adjusted EBITDA reached $151.5 million, in line with company guidance, and up 15% on a comparable basis when accounting for sale-leaseback transactions.
- Book Fairs remained a standout: Q4 Book Fairs revenue increased 5% to $186.6 million, driven by higher fair count, while Trade revenue dropped 20% against a tough comparison with the prior year's Hunger Games release.
- Fiscal 2027 guidance targets modest growth: Management expects revenue growth of 2% to 4% and adjusted EBITDA of $135 million to $145 million, pointing to stabilization in Education and continued strength in Children's Books.
- Shareholder returns accelerated: The company returned over $285 million to shareholders in fiscal 2026, including $268.6 million in share repurchases, and raised its quarterly dividend by 25% to $0.25 per share.
Why This Earnings Report Matters
Scholastic Corporation's fourth-quarter and full-year fiscal 2026 results, released on July 23, mark an important checkpoint in the company's multi-year transformation. Under CEO Peter Warwick, SCHL has been reshaping its governance, cost structure, and balance sheet, including sale-leaseback transactions that unlocked over $400 million in net proceeds. This earnings report matters because it shows whether the leaner, more focused company can turn restructuring momentum into sustainable profitability, even as top-line growth faces challenges from uneven Education spending and difficult publishing comparisons. For investors, the quarter provided a clear view of which segments are gaining traction and which still face structural headwinds heading into fiscal 2027.
The Numbers Breakdown
Scholastic reported fourth-quarter revenue of $476.1 million, a 6% decline from $508.3 million in the prior-year period and below the consensus estimate of approximately $517 million. For the full fiscal year, revenue decreased 3% to $1.582 billion.
On the bottom line, reported diluted EPS was $0.45, compared to $0.59 a year ago. However, adjusted diluted EPS came in at $2.19, matching analyst forecasts and more than doubling from $0.87 in the prior-year quarter. Full-year adjusted EPS reached $1.87, up substantially from $0.48 in fiscal 2025.
Adjusted EBITDA for the quarter was $84.7 million, versus $91.2 million a year earlier. On a pro forma comparable basis reflecting the full-period impact of sale-leaseback transactions, adjusted EBITDA rose 1% to $84.7 million. For the full year, adjusted EBITDA increased 4% to $151.5 million, in line with guidance, and rose 15% on a comparable basis.
By segment, the quarter showed clear divergence. Book Fairs revenue grew 5% to $186.6 million, supported by higher fair count. Book Clubs declined 7% to $12.2 million amid lower participation. Trade Publishing fell 20% to $77.5 million, reflecting a tough comparison against the prior-year release of Sunrise on the Reaping from Suzanne Collins' Hunger Games series. Education revenue dropped 13% to $109.2 million, as school and district spending on supplemental curriculum materials remained pressured. Entertainment surged 42% to $21.0 million on higher production services revenue. International revenue decreased 13% to $69.6 million.
I also checked this using Tickeron’s AI Screener to see how SCHL compares to others in the industry.
Market Reaction and Investor Sentiment
Scholastic shares fell approximately 5.25% in after-hours trading following the earnings release, declining to $44.00 from a regular-session close of $46.44. The sell-off appeared driven primarily by the top-line miss, as revenue came in roughly $41 million below consensus. Despite the post-earnings dip, SCHL stock had delivered a remarkable roughly 111% return over the prior 12 months and remained well above its 52-week low of $21.35. Investor sentiment entering the report reflected optimism around the restructuring story and capital returns, but the revenue shortfall introduced some caution about the pace of growth recovery.
Forward Outlook and Key Factors to Monitor
Scholastic's fiscal 2027 guidance calls for revenue growth of approximately 2% to 4% and adjusted EBITDA in the range of $135 million to $145 million. On a comparable basis, the midpoint of the EBITDA range represents about 6% growth from fiscal 2026. Free cash flow is expected to be approximately $35 million to $40 million, a sharp normalization from the $436 million reported in fiscal 2026.
Several segment-level dynamics will shape whether SCHL meets or exceeds these targets. The Book Fairs business enters fiscal 2027 with strong momentum, having held over 103,000 fairs in fiscal 2026 while generating approximately $250 million in cash and in-kind resources for schools. In Education, management acknowledged that schools and districts did not deliver the late-year spending surge anticipated in fiscal 2026. CEO Peter Warwick expressed confidence that performance would improve over the full course of fiscal 2027, supported by a strengthened product portfolio and a new chief revenue officer, but cautioned that improvement would not be immediate.
The Trade Publishing pipeline for fiscal 2027 includes a new Dog Man title in November and new content tied to the Hunger Games and Harry Potter franchises. Meanwhile, Entertainment is poised for continued growth, with projects such as a new Clifford the Big Red Dog animated series expected on PBS KIDS in 2027 and a live-action Magic School Bus film in development. Cost discipline will remain a central theme as the company tests the durability of its transformation.
Enhancing Analysis with AI Tools
When navigating earnings season, I find that tools capable of surfacing actionable ideas from thousands of stocks efficiently make a real difference. Tickeron’s AI Screener is an AI-powered stock and ETF discovery platform that enables traders and investors to filter the market using customizable criteria such as technical patterns, fundamental metrics, volatility profiles, industry classification, market capitalization, and AI-driven trading signals. Rather than manually sifting through endless charts, users can scan for breakout candidates, trend-following setups, or stocks exhibiting specific price patterns in seconds. For those monitoring earnings-driven opportunities or seeking to identify stocks with improving fundamentals similar to Scholastic's current transformation narrative, the AI Screener can help narrow the field with speed and precision.
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SCHL in downward trend: 10-day moving average broke below 50-day moving average on July 31, 2026
The 10-day moving average for SCHL crossed bearishly below the 50-day moving average on July 31, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for SCHL turned negative on July 09, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 39 similar instances when the indicator turned negative. In of the 39 cases the stock turned lower in the days that followed. This puts the odds of success at .
SCHL moved below its 50-day moving average on July 24, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SCHL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for SCHL entered a downward trend on August 06, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where SCHL's RSI Oscillator exited the oversold zone, of 28 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 54 cases where SCHL's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on August 10, 2026. You may want to consider a long position or call options on SCHL as a result. In of 104 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SCHL advanced for three days, in of 346 cases, the price rose further within the following month. The odds of a continued upward trend are .
SCHL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.055) is normal, around the industry mean (5.304). P/E Ratio (17.949) is within average values for comparable stocks, (20.904). SCHL's Projected Growth (PEG Ratio) (2.032) is slightly higher than the industry average of (1.933). Dividend Yield (0.019) settles around the average of (0.022) among similar stocks. P/S Ratio (0.643) is also within normal values, averaging (1.186).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. SCHL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SCHL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a publisher of books, magazines, teacher materials and television programming for children
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