Scholastic income down 55% despite sales rise
In the US, Scholastic has reported a 2019 fiscal year operating income of US$25 million (A$36.2m), a 55% drop on the previous year despite sales rising 2% to US$1.65 billion (A$2.3b), reports Publishers Weekly.
Contributing to the profit decline was a disappointing fourth quarter, sales tax collection issues at its book clubs, higher than expected book fair expenses, higher costs for printing, paper and labour, and the foreign currency exchange rates.
Revenue from children’s book publishing and distribution—the publisher’s largest segment—grew 2% on a 20% increase in trade sales, boosted by titles including Dav Pilkey’s Dog Man: Lord of the Fleas and Dog Man: Brawl of the Wild, new Harry Potter publishing including Fantastic Beasts: The Crimes of Grindelwald (J K Rowling), and Craig Smith’s The Wonky Donkey (illus by Katz Cowley).
The gain in trade sales was offset by a five percent decline in book club revenue and a three percent drop in book fair revenue. International revenue fell one percent, with the three percent growth in international sales offset by US$15.4 million (A$22.3m) lost in currency translations.
Scholastic forecasts that revenue in fiscal 2020 will increase to between US$1.67 billion (A$2.42b) and US$1.69 billion (A$2.45b) and EBITDA (earnings before interest, taxes, depreciation and amortisation) will rise to between US$140 million (A$202.6) and US$160 million (A$231.5m), up from US$121.3 million (A$175.1m )in fiscal 2019.
Category: International news