Shares of children’s book publisher Scholastic Corp. (NASDAQ:SCHL) are down double-digits today after the company’s first-quarter numbers disappointed investors. During the quarter, revenue dropped by 13.1% year-over-year to $228.5 million, missing expectations by $40.3 million. The net loss per share of $2.20 came in wider than estimates by a whopping $0.85.
The drop in the top line was attributable to continued retail weakness and seasonality in the company’s Education Solutions vertical. Furthermore, the company’s International revenues declined by 12%, owing to adverse foreign exchange movement coupled with the disposition of its direct sales operations in Asia.
Despite the challenges, SCHL remains upbeat for the rest of the year. Upcoming title launches in the Fall and Spring include Dog Man, Cat Kid Comic Club, Heartstopper, and The Harry Potter Wizarding Almanac. Additionally, SCHL is releasing the Goosebumps TV series on Disney+ and Hulu.
Further, SCHL had a net cash balance of $119.9 million at the end of the quarter. In Q1, it distributed dividends worth $6.5 million and bought back shares worth $36.2 million. The company still has about $85.7 million remaining under its share repurchase program.
Why Is Scholastic Stock Down?
With today’s price decline, Scholastic shares have now dropped nearly 17.8% over the past six months. While the seasonally weak first quarter is impacting SCHL’s stock price, a strong lineup of titles bodes well for the stock.
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