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Aug 31, 2020
Scholastic Q1 2021 Earnings Report
Reported financial results for the first quarter of fiscal year 2021.
Key Takeaways
Scholastic reported a decrease in revenue due to COVID-19 impacted delays in school openings but improved operating loss due to cost savings measures. Digital billings were up 15% in the quarter.
Successful execution of $100 million cost savings program improved quarterly operating loss and cash used in operating activities.
Trade and education businesses performed well and remain positioned for further growth.
Digital connections with customers deepened, with digital billings up 15% in the quarter.
Cost savings measures should bring permanent improvements to the Company's cost structure and opportunities for substantial gains in profitability as normal sales levels return.
Scholastic
Scholastic
Scholastic Revenue by Segment
Scholastic Revenue by Geographic Location
Revenue by Segment
Children's Book Publishing & Dist. Revenue
CapyFin.comEducation Solutions Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
The company expects a significant decline in revenues in the Children's Book Publishing and Distribution segment in the second quarter due to delays in club orders and fair bookings but believes that business conditions should improve in the second half of its fiscal year, but is not providing a financial outlook for fiscal year 2021.
Positive Outlook
- Company has substantially completed work on lowering its cost base by $100 million.
- A significant portion of these cost savings, as well as new measures being taken, should continue to favorably impact future period results.
- The outlook for the Company's trade and education businesses remains positive with a robust frontlist of bestselling series and authors scheduled to release over the remainder of the fiscal year.
- Scholastic's digital education programs and digital-only magazines gaining momentum as schools look to learning solutions which can be used at school and at home.
- Expect increasing demand for the Company's slate of flexible new services, such as our virtual and shippable fair options and home delivery of club and fair orders, as well as our safe and easy in-person fairs.
Challenges Ahead
- Delays in club orders and fair bookings will likely lead to a significant decline in revenues in the Company's Children's Book Publishing and Distribution segment in the second quarter.
- Given the variability in school schedules, as well as the possibility of new COVID outbreaks and their potential impact on schools, Scholastic is not providing a financial outlook for fiscal year 2021.
- Lower sales in the Company's direct sales business in Asia.
- School closings in Canada, Australia and the U.K.
- COVID-19 related measures taken by governmental authorities or suppliers or customers which may curtail or otherwise adversely affect certain of the Company's business operations
Revenue & Expenses
Visualization of income flow from segment revenue to net income