The 10-second takeaway
For the quarter ended May 31 (Q4), Scholastic met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share contracted significantly.
Gross margins expanded, operating margins contracted, net margins dropped.
Scholastic booked revenue of $506.9 million. The one analyst polled by S&P Capital IQ looked for sales of $514.3 million on the same basis. GAAP reported sales were 25% lower than the prior-year quarter's $678.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.90. The two earnings estimates compiled by S&P Capital IQ anticipated $0.83 per share. Non-GAAP EPS of $0.90 for Q4 were 54% lower than the prior-year quarter's $1.96 per share. (The prior-year quarter included -$0.11 per share in earnings from discontinued operations.) GAAP EPS of $0.66 for Q4 were 63% lower than the prior-year quarter's $1.76 per share. (The prior-year quarter included -$0.11 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.3%, 300 basis points better than the prior-year quarter. Operating margin was 8.0%, 650 basis points worse than the prior-year quarter. Net margin was 4.2%, 420 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $308.8 million. On the bottom line, the average EPS estimate is -$0.76.
Next year's average estimate for revenue is $1.92 billion. The average EPS estimate is $2.23.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 68 members out of 97 rating the stock outperform, and 29 members rating it underperform. Among 33 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give Scholastic a green thumbs-up, and seven give it a red thumbs-down.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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