Sales at Scholastic in their second quarter nudged up 1 percent to $660 million, as operating income fell $2.4 million to $105.6 million. Earnings would have been up sharply, except the company took $40 million in mostly non-cash writedowns. There was a $36.3 million charge from their “decision to consolidate supplemental non-fiction and library publishing activities into the children’s book segment” and another $3.8 million charge “related to assets received in connection with the dissolution of a joint venture in the United Kingdom.”
Trade book sales fell 4.5 percent, at $49.6 million for the quarter. Their school book clubs showed the biggest decline, down 14 percent at $138.4 million, “partially due to fewer orders related to planned cuts in promotion spending and the late start of the school year.” Education publishing was the biggest gainer, up 35 percent to $122.6 million, driven by a doubling “in sales of educational technology and related services.”
CEO Dick Robinson says in the release: “Pursuing our goal of 9% operating margins, we made significant progress with cost reductions and increased pricing across the Company, particularly in the Children’s Book segment. This yielded higher margins and profits in that segment compared to a year ago, despite lower revenue partially due to planned reductions in promotion spending, as well as the late start of schools this year.”
Release