SCHL - Earnings call transcript Q4 2024

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Operator

Thank you for standing by, and welcome to the Scholastic Reports Fourth Quarter Fiscal Year 2024 Results. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Jeffrey Mathews. Please go ahead, sir.

Jeffrey Mathews

Hello, and welcome, everyone, to Scholastic's Fiscal 2024 Fourth Quarter Earnings Call. I'm Officer; Peter Chief and call, and our Financial the Executive Chief Haji on joined Warwick, by President Officer. Today Glover, our

risks on subject point investor.scholastic.com, forward-looking. from by we uncertainties, IR results already now anticipated. will and done usual, have be would the These to certain not investor As their may like statements We to today posted if you've statements, website that actual nature, you which materially presentation at various so. may out are download forward-looking and accompanying differ our currently made those

addition, the In reconciliation earnings as of We discussing posted earnings to presentation Investor review financial encourage accompanying company's may directly this the investor please non-GAAP The filed them defined to been to measures financial measures SEC. and the you website. the most release with on This factors and Should we measures e-mail the and X-K. release be review investor_relations@scholastic.com. filed to a will Form those comparable release tables G. in in afternoon also found Regulation disclosed address, has quarterly company's GAAP some in and have directly today's questions reports our call, IR after annual Relations send the any disclaimers our to you risk the in be

call the Warwick And this turn presentation. would over to Peter now to like I to begin afternoon's

Peter Warwick

long-term execute performance. or quarter, you a its opportunities and and good impacted And market Events Thank fiscal the afternoon, for and modest Solutions that's key businesses to relative Scholastic expectations quarter X contrast Thank year's on consolidated Increasing for everyone. Reading growth. XX% revenue in pressure decline resulting last our spending million current last navigating quarter to growth strategy, XXXX, affecting in strong our Education on us. in $XX School Jeff, to headwinds. joining of you, while fourth investing continued initiatives In

was down important compared record our $XX fourth the last quarter million, $XX most prior ago. to seasonally our in income million quarter year million. year was million below a $XXX and year's Fourth from $XX guidance. operating revised profits Consequently, EBITDA fell Adjusted of adjusted

We with as excluding onetime maintained long-term demand. opportunities. overhead, spending both improved and SG&A in corporate line lower-than-expected took expenses manage steps items, we to even on

For million, million $XXX million revenue fiscal of a the to since million. in cash This ago, reflecting headwinds capital-efficient $XX last the we continue adjusted to revised XXXX, free fall. With we've business' EBITDA up experienced was million from capital working our versus $XX $XX $XXX generate million careful and strong of prior $XX again, year. our models, flow outlook management year exceeded

to we our drive on capital to during through share million Scholastic's We deployed repurchases value returned Delivering shareholders XXXX. over sheet commitment $XXX fiscal strong and long-term dividends year. the in also to allocation, balance

a life We economic X more the kids Scholastic's our a It which they and as Media Story Group, and Scholastic's X in where company. participate we evolution children's to reach also our expands is closed cycle in global franchises XXX% announced a interest are greatly IP. in full XX. $XXX media profitably million a ability children's of June to Story acquire strategic investment major investment on advance in

page Entertainment will and significant for segment. Since Story Starting this we brand Scholastic there's XXXX demand on that successfully the Entertainment fiscal profitably and effectively Entertainment its with on IP screens year, as and has in new well and meet X that Scholastic's can publishing Scholastic a this be consolidated as proven the integrated demand. reboot,

the with opportunities release The #X book acquisition beloved to revenues today, Zealand best-selling publishing trusted of margins Australia Canada, franchises ability twelfth global print, significantly an the much the Scholastic's New to as again sales of the series sales franchises. spot forward with a month, In only excluding business trade I'll the After Scholastic Man reached point shortly. Last spring all quarter, U.S., discuss merchandising. the sizable the saw and integrated build combined and earlier and increase and U.K. content, Pilkey's success across categories expands titles book Scholastic's X%, strong top of children's Dog publishing, by also Dav to brand, a for children's quickly Its plan, screens in moving Scholastic's Ireland, global addition Story adding spot its in drove book demonstrating EBITDA the from the Entertainment. is starting across leverage in solid in X best-selling series, division

tested in Fairs Despite the on fair decreased and also were we Sales lower revenues school Book reflecting partly in spring in Clubs X, resizing declined in new solid by Book segment School Books trade quarter's consumer offers, level, formats count. the increasing fair Book growth to planned results, participation by School this in Book relative Children's while revenue School X% revenues resizing, by and last of promotional record with for spending ahead. year down reflecting per pressure Fairs. the offset Clubs XX% last marketing year's quarter and the X%,

which across have per second transaction on fairs. number especially the our fair, fair's families, spring market, we've the particular Headwinds As we've well has strong schools in as host impacted This some absenteeism when economy, school this revenue of of among more of in fairs rates offset year churn and fair pressure middle-class impacted consumer high spending fairs. per higher transactions the grown the higher-value sizes, environment, partly the among fair by reflects count merchandising. addition this been of increased increasing than discussed, has as especially benefit smaller as core

in our the Revenues business' by seasonally Solutions XX% declined segment. important Education quarter. to fourth most Turning

year, explicitly This curriculum and have the rose to sales aligned schools structured spring. on they not products implemented literacy this many community science overall. nonschool As classroom this book of and contrast, state impacted paused partners adopted and In core as spending collections well with sales new as supplemental libraries literacy products particularly programs of curricular reading.

a As we return years. cyclical comprehensive we a investing on currently continued challenging supplemental navigated plan, spending in anticipation We're school executing currently on new shortly. long-term discuss XXXX in of as this XXXX the segment's the product of growth market, and in I'll products potential

quarter, headwinds declined Finally, last in modestly mostly Asia. International reflecting revenues

I profitability of laid businesses generation book out protecting are builds and key education a international growth market to As these of return growth and flow children's free year strategy vectors, domestic long-term I'll earnings our growth Leveraging cash run ago, and by strengths Scholastic's trends and also flow and sheet core sustainably business fund through. strong aim the while the capital models. guided which and to X cash unique free grow on and flow investments shareholders. our Scholastics investments we balance outlook, cash to our

First, and on our Scholastic's educators families ourselves trusted brand and channels children's into sustainably. content with to by proliferate as accelerated new technologies and global screens leaning brands, we're like and AI, differentiate franchises online best-selling grow generative and

more on Second, as to with time ability they and spend our reach the are and both where we're expanding kids high-quality on page. kids screens, on content more screen engaging

with NAEP post fund children's we scores, programs declining new are reach in to with developing at families partnership state, philanthropic struggled parents school and a home, models education as community school. to recent literacy support the especially reverse we're again fourth, directly. And and schools to at lows, and organizations channels results and seen reading COVID, XX-plus-year as as new outside and take at families more the building their support active role Third,

Turning near- and our to long-term outlook.

our benefit modest For adjusted of revenue the EBITDA, Haji and Story, as including targeting fiscal in strategic will XXXX, growth in X we're investment discuss.

with ahead growth investments compelling I've opportunities continuing are especially market in As Education we Solutions. headwinds, our we moving navigate while said, most for

expanded Entertainment new production the executing development slate. on In segment, and we're an

while lights levels key fiscal well X build properties beyond. platforms the below Scholastic X in from core in green 'XX synergies and and ago, with record orders we'll preparing for continue on through continue fiscal production growth and While years XXXX to their

X long-standing during valuable IP current Story that have cycle. the partnerships has their buttressed and results

optimistic For at have company both profit top the significant Daniel several X and Neighborhood for We're continue will Wild and Kratts, least seasons. participation produces shows PBS' in more example, currently. Tiger's

We're featuring moves significant sales Bus, brands, Magic we've and X X key X Children's publishing the a strong largest our core moving projects have we world. in These presence even update expertise for distribution merchandising and and Story's Scholastic upside bestseller-filled plans presents partners our begun development also major another teams. plan Clifford value market. that School licensing today's leveraging in children's and the of to Story's brands on. In have to on content quickly tight franchise, Scholastic, forward forward to YouTube currently for Scholastic's Books, executing as franchises licensing opportunity including and

Man Dog by title Man we'll First, worldwide followed of XXXX. another Dog in be theatrical the release the this publishing January fall, movie

at Harry also franchise to Potter mega and Reaping, publishing fifth are U.S., continue fans Collins' bestselling and delight will to We're and book in the bringing beyond. This we readers timeless Zealand. look bestsellers, Harry XXXX, the so picture fall, on New the Potter book XXXX of Book forward in publishing Canada, of released the companion Potter: announced promises Hogwarts, Official Second, Games to about already Harry The to we U.K., Official Create, the simultaneously be families anticipated Sunrise Baking Decorate new and that to all the Potter Christmas series in highly doing Cookbook. book ages. Bake, excited fiscal Suzanne Lionsgate and March this movie thrilled through and which also scheduled book, Times Australia worldwide the adaptation a November Harry to has in York a XXXX, The New be Hunger

title the novels, to this upon industry year. dominated children's in first their graphic we Unico: also launch additional anticipated X leading launched fiscal August, the highly Building our series. a we'll middle-grade the And ability publishing kids, multi-volume and Awakening, series position in later in have manga manga full-color engage kid-friendly which

Ryan addition, full titles bestselling authors In Oseman, Raina and from exciting we and a Alice Telgemeier, Muñoz new Selznick. beloved lineup Pam of Brian have

I publishing XXXX. We Not we'll the movie creator, finale In from to of December internationally major another Funny, have acclaimed David!, Goosebumps That's series March, publishing survived. we'll be our brand-new Blabey's David like be new Caldecott David! Club, Shannon. series in Baby-Sitters And and in Honor book with Guys The Bad No, summer follow Aaron in a publishing

initiatives, from buying successfully digital program, fair including in help XXXX XXXX. revenue we're a growth to we're enabling schools optimistic School its rollout the fiscal XXXX, to In for support and new year actions about is grow we Book the students full who Share to was per Fair planning for invest school contributions and giving need books. program this modest in The Fairs, beyond. fiscal community collect long-term growth as in fiscal piloted

should and to case optimization, types new positively value per Continued fair. strategic category revenue pricing also contribute

title in and Fairs' Man leveraging We titles. have exciting the to Dog Scholastic access release hottest of Book film, young children's around plans the adult next the exclusive

to With structure respect prospecting, our our fair to success. fair book count, churn and in processes invested host and sales we've ensure reduce increase

to children. our of to and channel piloting track with school-based and Based This direct-to-home So support models distribution serve the begun schools and redesigned national far, core we're and grow local assets target and proposition scholastic core flyers and bring as serve. In channels a and public early and We're and bookings of to our and caregivers early strategic addressable long-term to infrastructure, we're and developments launching kids fairs targeting investing year, profitable investing fairs kids' brand and operating markets on outside for sponsored fairs. Clubs, school to our don't leveraging in readers this to fairs. research unique in substantial count on continue Book a which testing, we we book taps piloting and new organizations learners. families. high-need young families our teachers will our currently communities, to market opportunity new and our offers offers extensive parents to channels also XX,XXX trusted book we've Complementing schools which School growth, new reengage enhancing customers their fiscal achieve share to value to revitalize of we're families profitably XXXX help with

further expect these growth to providing about line don't we in XXXX, in opportunity fiscal materially XXXX and optimistic investments beyond, to the we top fiscal and While look to contribute updates. we're forward

investing Solutions. organizations programs and and has to proven launching also home development. schools as at to growth and for communities models targeting home benefit our school, Turning reading access to own partners which partnership We're libraries. outside continue give and books sales kids' the We're improve and literacy in state in high-need solid Education these to organizations build ability community their philanthropic new to to to the kids choose

literacy of aligned of supplemental not with new the explicitly especially from growth reading. funding sources materials, in sales expect to We declines science further help those offset literacy

literacy aligned continue ELA with year, our These investing program a engaging plan instruction. current programs of in leveraging pipeline magazine middle-school literacy a leveled This content, and we classroom ReadyXReading and replace program, to to new libraries older for reading include year. including better launched collections building book new knowledge-building rooms guided collections, students, our engaging on extensive we decodable which and last our new

We anticipate year will growth the supplemental and 'XX expect the XXXX, school to products cycle to launch these fiscal in funding as contribute beginning products improves. for in XXXX they

moment, trade pursue margins growth in continued drive Haji relative and provide the offering contribution to investment opportunities Canada, side. the X in modest in as in to language a International, fiscal markets, markets more taking contribution further improvements In strategic expected major across actions are and our on operating build operational of in we're cost in including English operating in major expand XXXX Story scale including and we Asia. to details our will improvements expected and

Scholastic's to summary, fiscal In the progress goals. accelerate XXXX XXXX toward of strategic our plan continue and fiscal is

channels As and of the long Scholastic's we giving extensive parents potential unique to and to among strengths, our trusted unique kids, term, and our committed growing short joy full to essential realizing we learning. our an of in need the educators, brand, power markets, stories content both respond dynamic meet kids the and remain our and

results call With guidance. and that, fiscal the turn Haji our to I'll to XXXX fiscal over XXXX review

Haji Glover

complete items onetime will adjusted items. for our results and refer to everyone. refer onetime otherwise fiscal and quarter our tables Today, for to Peter, SEC and Thank full the a excluding fourth I indicated. discussion good release unless you, press Please year, of afternoon, filings

year a As fall Fair revised in of science-based performance and revenues materials, our noted, prior for below our while QX in guidance. impacted supplemental period Book shift curricula per fair adoption continued increasing our below customer businesses more our caused instructions literacy the and core Peter challenging to Education market Widespread ELA and for softness of on spending approaches impacted Book Fairs. spending

While preserve which margins, XXXX on launch steps XXXX, in taken years. structured expect including we key to literacy to we maintained were new initiatives, operating the programs, spending school

to fairs. per In Book to average channels these publishing and to the a trade periods. Canadian Fairs, the activities these But operations were we fair. prior In benefit this cash in we our new periods. well challenges, operating inventory channel due and headwinds, in free Book continued our performed future resized operating to business, Internationally, successfully Despite impacted new this added tested tightly U.K. profitably we U.S. in margins revenue strong U.S. lower favorable negatively leverage contributing business to by due strong response flow. managed from pipeline, and to restructuring offerings grow as we in cash, Clubs

period. of decreased the were compared I earnings in per Operating $XX.X million million offset to to by the million. Adjusted a income partially was to $X.XX million share million $XX.X year, the period, million which lower Turning and significant market Net prior the year to share benefit from lowered net $X.XX. described. million, revenues count In This fourth prior to down to income to million diluted prior consolidated of $XX.X diluted our decreased ago. share headwinds $XXX EBITDA $XX.X financial $XXX.X XX.X reflected the in reflecting year the results. $XX from compared XX.X year million repurchases, just relative income XX% quarter, was

period. million. $XXX.X EBITDA $XX.X XX% diluted million million $XXX.X $X.XX, in the revenues were $XX.X to Net And year prior prior full earnings in period. year million decreased down X% million, the Full income XXXX. year to $X.XX the adjusted to share decreased per Operating XX% For from decreased fiscal billion. down income was $X.X year, $XX.X from from in

the per Book $X.X leverage down revenue Book Entertainment, from in was Now in for Publishing $XX.X year turning driven $XXX the million million Trade. reflecting Distribution, lower quarter operating partially impact fair. the X% to the Clubs, of were X% our revenue fair high segment offset income timing-related Children's period sales by to resizing Segment year. increased for revenue to down operating prior Scholastic decreased of lower Revenues results. in million, fiscal Book In and revenues $XXX.X million, by primarily full Fairs to and fourth per

fiscal For the income $XXX.X year, segment Children's for the operating $XX.X Book full to million decreased million.

Book the Fairs fourth for million revenues year $XXX.X to the X% in quarter $XXX.X full million. decreased to and X%

levels, participation, headwinds resulted spending than year offsetting revenue volumes. Peter. well Merchandising transaction higher impacted lower increased, count that sizes, fair record ahead Although by pre-pandemic was of as prior the efforts partially per levels fair lower in on though discussed transaction

Book Clubs revenues prior were fourth Full down revenues of period the of prior $XX.X million. $XXX.X year the of million revenues year $XX.X versus million. quarter trailed year $XX.X in million revenue the of

resized As underway to improve offerings profitable Book are more a Club smaller, various to teacher is business, efforts engagement. to test

are recorded prior to million channel, customers. quarter of year Entertainment Scholastic in Full continues with publisher Excluding the in to trade million, were $XXX.X prior revenues Despite which in increased million Trade company's line a market, retail $XXX resonate to difficult revenues fourth year the revenues, bestselling compared the $XX.X in with revenues $XX.X million. consolidated year. also

X Entertainment for the XXXX, series. TV Story will Group decreased the Beginning year fiscal a the prior Media of Eva Scholastic due Scholastic in be company. in Owlet new revenues release Entertainment combined to with segment

were when in $XXX.X Book revenues for prior quarter were period. QX to Excluding timing for year, decreased fourth XXXX. year. In the release X% And revenues year Clubs and full X% segment Education, million, revenues of million, the $XXX.X impact compared from Scholastic in the Entertainment resizing the from and the XX% the X% down dates, down full the

opportunity. key increasing including partly million supplemental to classroom year to Segment in well the This our curricula partners, growth reading in summer Full lower a as the literacy coupled Lower revenues, operating in growth with strategic literacy collections. operating product the for product $XX.X continued income libraries period. impacted decreased offset year offerings, $XX.X we to in future million which as see by operating as income sales to compared discussed, year lines, we segment nonschool and margins. the million and $XX.X prior period. As QX compared $XX.X competition state sales community to in investment market million for challenging decreased prior was resulted

of segment prior $XX.X The impact revenues $XXX,XXX unfavorable $XX.X quarter International in of partly currency reflecting year-over-year million, of period trailed revenues fourth year million the foreign exchange.

year, decrease million revenues $XXX.X prior primarily negative the due full million. $XXX.X in Australia For Year-over-year, $X.X and exchange million had of The International the in revenues was segment lower revenue fourth trade the Asia impact. channels million year's down the to were a from offset the performed of foreign quarter This operating due partially segment decreased to million was the where in The the to the retail in market. global the company's softness income popular in U.K., period. in prior $X.X well. titles sales compared to $X.X

our compared $XX.X period, employee-related were $XX.X million prior prior million loss year. was overhead improving costs. from in XXXX, the reflecting a in costs fiscal of lower Unallocated segment to million $X.X loss operating $X.X the in million fourth For the quarter,

prior year-over-year overhead X% cost full increase to on $XX.X million year, inflationary unallocated $XX was year of million. costs. For primarily related compared the higher The of were to overhead when impact

balance the cash and Now sheet. turning to flow

cash increased total were year. compared cash Improvements million flow sales. by the $XXX.X $XXX.X $XX.X end the offset million to was For year, to $XXX.X prior of prior the year. net operating flow to cash $XX Free provided on purchases, customer inventory in decreased compared largely to remittance activities in fiscal period. driven lower million of XXXX million cash in by net in cash million by year year, million the compared prior partially debt was the the end and equivalents at $XXX.X of At fiscal the lower full

In its net related In regular fiscal year share the returned to capital, fiscal repurchases, in of to market nearly $XX including million represented with we of continued over increase $XXX repurchased returning strategies shareholders XXX,XXX over over total, issued million Open dividend, fiscal excess $XX XXXX, X.X XXXX. This shares, XXXX, million shares executing to stock quarter. combined company's XX% which deploy in company shareholders. the including cash outstanding. represents million shares a compensation, to

we of past the company's repurchased stock shares, million issued X.X represented net X.X the fiscal Over million X for outstanding. which shares XX% years, compensation, shares of

working borrowed to existing under capital begin its $XXX facility the Media of complete the and X we As company approximately revolving transaction XXXX, the meet the fiscal Story summertime million organization. needs credit seasonal

in debt the more securing fund are acquisition. permanent the of We facility currently process a to

on $XX $XX needs, budgeted current inventory cash earnings, capital and our including million. million for forecast purchasing is investments free lower and expected growth current to Based working flow outlook

our balance We second, first, strong will investing enhance maintaining to to cash excess pursue capital a growth third, returns. and opportunities leverage continue shareholders sheet; balance to opportunity; deploy and and to sheet their in by, returning efficient

fiscal As adding be Scholastic existing current as Scholastic in XXXX, Group. added Entertainment discussed, as we a in with historical Entertainment release press will X well for earnings division consolidate will newly segment, Children's in the the Media beginning new The provide company's the which results Book from Story the and Story. both tables X results segment reported slide Entertainment historically

and spending fewer expected on major next discussed, greenlit level in Peter in with from both to productions just under This the streaming and benefited of fiscal to by XXXX results new months. pressure As productions XXXX platforms. XXXX for XX being remain high businesses' is retracted XX

has all peers in the been strength Story premium While able of and to has. much this impacted Scholastic has Entertainment IP industry, like the reputation, X its on partnerships, players outperform

spending. in is executing while of resuming X navigating initiatives, strategic Children's Books integration segment execute plans, In In XXXX, XXXX, growth as this growth and adjusted segment XXXX in on Books in growth Story, Solutions in our to solid fiscal results fiscal on fiscal EBITDA Education headwinds should our continued and we continue priority synergies modest expect the beyond. managing company-wide the tightly short-term our benefit which and including segment, franchise Children's we and

the adjusted growth franchises. Books X% plan, sales million. EBITDA publishing merchandising our increased revenue to on building targeting count fair expect $XXX plan exciting we growth and and Based Fairs, initiatives. Children's and X% new of In $XXX million Book segment, we on on a of modest In this have expect to very we global

to to increase continue will strategies in explore teacher We engagement. Clubs Book

In from Story its addition we franchises on driving the our we new in X and benefit further of beyond. Entertainment and integrated partnerships strong our segment, expect which growth and to anticipate strategies, we as XXXX execute strategic

expect Story XXXX. over $XX in EBITDA with fiscal revenue solid X million in We to contribute

In supplemental despite year. Solutions Education slated the segment, soft launches forthcoming product the we XXXX expect spending sales steady new for to hold XXXX, by offset on offerings, school

Our expanding primary sources aimed reading the new tackle nationwide. on initiatives remains securing challenges focus at funding prevalent to

as costs overhead year to support unallocated improve long-term we to next approximately efficiencies and capabilities expect to remain continue build growth. We leveled

Scholastic seasonal. and generally fourth third summer second record and operating quarters are We winter As loss our a first and highly results coinciding vacations reminder, with quarters. with an in school profitable

to period. line prior of seasonal QX loss with in be We XXXX fiscal expect in our

We are to busy an forward looking ahead. exciting and year

And I'll today. time call the Peter remarks. your for you his now hand final for Thank back to

Peter Warwick

you, Haji. Thank

by While continued, strength cash-generating balance opportunity. unmatched our long-term by children's vast, strengths. in, media trusted trusted sight forces, adapting Scholastic's market for and global building and and is and this to And Scholastic's creativity that businesses pursue and of the X on investing reading carefully manage XXXX, with we've challenging quarter trends this as seen need opportunity of are employees, conditions and favorable cyclical talent shareholders, our authors, a children's kept broader dynamic in illustrators and fiscal robust we create continuing brand, books, our businesses. distribution the impact. to growing opportunity driven support deep: to substantial the more strengths our the look macro to on our year are and fiscal channels, in serve In sheet and our and market creators proprietary forward franchises value content our we and

now much. the let very me Jeff. you turn call And to over Thank

Jeffrey Mathews

Thank you, questions. call we open will that, With for Operator? the Peter.

Operator

from Sidoti McCarthy our Instructions] from for comes the first & Brendan today line question Company. [Operator And

Brendan Michael McCarthy

I XX% revenue off looking the wanted 'XX? you start looking fair fair surpass fiscal pre-pandemic Can And fiscal Book for about levels into outlook Fairs the year? to your looking out talk you to do business. at per expect into the next of

Peter Warwick

It's Yes, it's Peter. here. Peter

So we be we're the revenue -- expect in terms count, in would per we did less period, to do it's the the that financial much we make probably all, scale. which we're of were XXXX. really us pre-pandemic and book very year expecting We growth money fairs for because the of to fair the fairs focus at during than that going pre-pandemic financial terms modest on forward, forthcoming going -- some in much in revenue have better be didn't

churn I important that we addressable we addressable best size think really, make be means that well as put we which fairs which revenues during thing. improvements, focused that there's to can the big in on we number is focus the is market a described that the sure think, one of the can place, we do I we market, less And do that really means with the on where of call, make I what's the will able to sure that hold.

Brendan Michael McCarthy

appreciate you if that the to color strategy how can Clubs relates that have shrink the Scholastic some longer Book I -- on I'm far 'XX. Scholastic along to as is provide turn do wondering front how to more and to guess business strategy. does how the and much I the I fiscal much or to company work maybe wanted in detail Great. on there. grow it

Peter Warwick

we'll of what's worked the of things best think that that. ways from Well, fall a time of lot number implementing working be of spent I we've hard I And handling the think a we've year. this that and trialed

to we're that optimistic us, Brendan, able about more importantly, this period much the to deteriorated. the engage profitable. with what really being in that need as be changes the But have forward do possible making to been to the way has -- needs be business. with really able also And that teachers we're we But to this, be And we the business. in in to the we're we make as profitability modestly be think want centric is think year-over-year that going most going grow able tune manage grow that that not think committed key point I can are we teacher I back the possibly to business. much is to we as as business I to that sure

Brendan Michael McCarthy

part relates business. Understood. turning geared a any the reading that. to to the always know a of Understood. Solutions reading? company a as big acquire And opportunity allocation go science there spending. on towards of has Education the Are it is to been I that science out broad to acquisitions But have bit maybe of transition headwind and you Scholastic's fully the a know been of framework, out I capital seeing

Jeffrey Mathews

this Jeff. adding or both some products across most discussed, aligned. we broad -- have can we are the Mathews Education that a Entertainment development properly as that Look, compelling we I the where opportunities are opportunities is the corporate from and address -- Jeff now great our perspective. Brendan, Books seeing In we're Children's here. we've segment, -- see -- segment. weren't

That's core making value them We mostly new of investments align The those with done is to around great pedagogies. independent reading kind organically. still are there. taking bones and

content at additionally to children's opportunities We the as side review and while that opportunities we in on segment media look continue well.

Brendan Michael McCarthy

one it. it. Got me. for And Got more question

underperformance that your 'XX? cause the factors fiscal guidance or as and relates relative material out 'XX it to a what numbers outperformance provided, fiscal some expectations to you Looking for would of to

Peter Warwick

sort economic participating in public this X are have who money factor the by The fact. to of who Peter books and from X surprise. because the they was the very it's -- Fairs were buying at final the environment much think is to one are actually whose Book reflective was than of middle-class were of -- kids the in didn't they families of number that declined really we factors. main I took seen Fairs buy number here. And There many the quarter, that lower their any That's us parents Book during of The fairs. the go books. kids our first certainly And actually schools. kids Yes, had

much already mentioned expected turned there reading we've in for to that actually really one opportunities will the out materials. the be that And be be the area about fully to have supplemental and more forthcoming was what able be order in factor with other the new supplement will materials education a case than are that teachers as 'XX The that do because to like, volume they're materials in science of reading. and during We trained and time curricula more associated see new headwind, that then is provide able financial particularly and properly to able to the that But the to they've literacy we got year. of in cyclical. just programs good a years core familiar something to 'XX, It's school would they was being continuing new once schools using. position sheer which to be of a the be if new you bit with that the curriculum we those need it

Operator

hand for to like today's any session remarks. question-and-answer of thank I'd further does conclude you. program. management back the to program This the

Peter Warwick

to next our Goodbye. updates to in on days further you quarterly initiatives joined in our investors has providing got afternoon. look an our coming the It's We those growth and progress, this very who upcoming us of ahead. calls, forward Peter here. including -- on to you Well, engaging with Scholastic important, exciting one with And including all our of thank thank you year September. much. the

Operator

This Thank your for you. does thank today's Ladies and program. gentlemen, participation the conclude you in conference.

disconnect. You Good day. may now

Scholastic (SCHL) 18 Jul 242024 Q4 Earnings call transcript