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December 23, 2025 • 4 min read
Scholastic Corporation (SCHL), the global publishing giant best known for bringing Harry Potter and The Hunger Games to readers, has just released its financial results for the second quarter of fiscal 2026. For those not familiar with the name, Scholastic is the world's largest publisher and distributor of children's books, a ubiquitous presence in schools through its book clubs and book fairs.
The goal of this post is to dig into their latest 10-Q filing to see how the company is performing during a critical part of the school year. While the core business of selling physical books remains robust, the company faces distinct challenges in its media and education service divisions.
To get a quick overview of how money flows through Scholastic—from revenue sources down to the bottom line—take a look at the visualization below, which illustrates the company's performance for the quarter ended November 30, 2025.
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For the quarter, Scholastic reported total revenues of $551.1 million, a modest increase from $544.6 million in the same period last year. While the revenue growth was slight (around 1.2%), the company demonstrated significant improvement in profitability. Operating income rose to $82.9 million, up from $74.7 million the previous year, resulting in an operating margin of 15.0%.
Net income saw a healthy bump to $55.9 million ($2.17 per diluted share), compared to $48.8 million ($1.71 per diluted share) a year ago. This suggests that despite flat-to-low growth in sales, Scholastic is managing its costs effectively and benefiting from a favorable mix of high-margin sales.
The engine driving Scholastic remains its Children's Book Publishing and Distribution segment. This division, which includes the iconic school book fairs and trade publishing, generated $380.9 million in revenue, accounting for nearly 70% of the company's total sales.
Operating income for this segment was $108.8 million, highlighting just how profitable the traditional book business remains. The "Book Fairs" channel alone brought in $242.0 million. For investors, this confirms that despite the digital age, the physical school ecosystem remains Scholastic's most formidable "moat" or competitive advantage.
One of the more interesting takeaways from the filing is the performance divergence between international operations and domestic services.
A notable item in this quarter's income statement is $8.6 million listed under "Asset impairments and write downs." For those new to financial jargon, an impairment occurs when a company realizes that an asset (like a copyright, a film production, or software) is no longer worth what it was listed for on the balance sheet. They must "write down" the value, which counts as an expense.
Scholastic took specific hits in its Education ($3.4 million) and Entertainment ($5.2 million) segments. While these are non-cash charges (meaning money didn't physically leave the bank account this quarter), they acknowledge that past investments in these areas aren't generating the expected future value.
Scholastic's latest filing paints a picture of a company with a rock-solid core business that is currently subsidizing its struggling expansion efforts. The School Book Fairs continue to print money, providing the capital necessary to navigate a rough patch in Education Solutions and Entertainment media. As the company moves forward, the key challenge will be stabilizing the Education segment to ensure it complements, rather than drags down, the profitable publishing arm.
Last updated: December 23, 2025