Scholastic Delivers Strong Q4 2026 Results Amid Challenging Market Conditions
Despite a decline in revenue, Scholastic, the leading children's publishing company, delivered strong adjusted operating income and EBITDA results for its fiscal fourth quarter of 2026. In an earnings call held on July 23rd, 2026, Peter Warwick, President and Chief Executive Officer, presented the company's key financial metrics, highlighting a multi-year transformation that has unlocked efficiencies, created integrated growth platforms, and enhanced shareholder returns.
According to Warren Buffett-esque CFO Haji Glover, "the earnings power of the more focused company we've been building" was on full display during Q4 2026. As Warwick noted, "this progress reflects a multi-year transformation of Scholastic's governance, organization, strategy, and balance sheet." The company has made significant strides in refining its business model, discipline cost management, and improving underlying profitability.
Key highlights from the quarter include a 3% decrease in revenue, operating income of $15.2 million (approximately in line with the prior year period), adjusted operating income of $47.1 million (up 32% from $35.8 million a year ago), and adjusted EBITDA of $151.5 million (up 4%, or 15% on a comparable basis, reflecting the full-year impact of sale leaseback transactions). Education segment showed improving trends despite headwinds continuing, with book fairs and entertainment returning to growth.
The company's capital deployment and balance sheet optimization efforts yielded impressive results. The sale-leaseback transactions unlocked over $400 million in net proceeds from real estate assets, which were then used to accelerate shareholder returns through open market repurchases and modified Dutch auction tender offer. During the year, Scholastic returned over $285 million to shareholders, including a 25% increase in regular dividend announced yesterday.
Warwick emphasized that "Scholastic brings children to reading," highlighting the company's mission-driven approach to creating long-term value for shareholders and all stakeholders. The market is indeed aligning with this direction, as evident from the company's progress in evolving a trusted brand, scaling its impact, and unlocking new growth opportunities.
