Scholastic Corporation (NASDAQ:SCHL) shares slumped over 12% in Friday pre-market trading after the children’s education and media company reported fiscal second-quarter earnings below Wall Street estimates and lowered its full-year profit and sales outlook.
It posted 2Q earnings per share of $2.45, up 16% year-over-year but below estimates of $2.65.
Revenue decreased 4% year-over-year to $562.6 million, missing forecasts of $625.2 million. The company attributed its decreased revenues to reduced promotional spending and the elimination of unprofitable orders in Book Clubs.
For fiscal 2024, Scholastic now expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $165 million to $175 million, down from its earlier forecast of $190 million to $200 million.
Revenue is no longer expected to rise 3% to 5%, with the company now expecting it to be level or slightly lower year-over-year.
"Second quarter results came in below expectations for profit growth, however, largely reflecting lower than forecast participation and spending in our School Reading Events division, which we expect to continue for the remainder of this school year,” commented Scholastic CEO Peter Warwick.
“As a result, we are adjusting our fiscal 2024 guidance as we take steps to target additional revenue opportunities and align spending in the second half of this year.”
Scholastic shares were down 12.7% at US$36.21 ahead of the opening bell.
~Updated with latest share price movement~