Led by strong sales of The Hunger Games trilogy, Scholastic reported sharply higher sales for the third quarter of $467 million, up 22 percent from a year ago, and a much smaller seasonal loss of $3.2 million, or 10 cents per share, compared to 81 cents a share (or $25.1 million) a year ago. The publisher’s stock jumped over 20 percent (or more than $7 a share) in early trading on Thursday on the improved results and increased full-year guidance. If sustained, it will be the highest Scholastic’s shares have traded since 2002.
Besides Hunger Games, for which “sales of the series reached a high point in the quarter, ahead of next week’s highly anticipated movie release,” ceo Dick Robinson adds in the release that “Scholastic’s distribution strengths were evidenced by double-digit sales growth and profit improvement in School Book Fairs last quarter.” The impact of Hunger Games sales is quite evident in the breakout for Scholastic’s trade book line: This quarter’s sales were $112 million, compared to $43.5 million this time a year ago. (They also cite two other movie tie-ins, Brian Selznick’s The Invention of Hugo Cabret and Michael Morpurgo’s War Horse.)
In special items, Scholastic did have a one-time expense of $2.5 million related to staff reductions and their voluntary retirement program, along with $3.1 million in bad debt for the quarter and unspecified asset impairments, primarily in the children’s publishing and distribution segment, of $800,000.
Based on the strong quarter, the company raised its full-year guidance for both sales and earnings, now forecasting revenue of approximately $2 billion and earnings of between $2.60 and $2.90 per share.