Scholastic Corporation

6,026 results. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Jeffrey Matthews, Executive Vice President and Chief Growth Officer.

Hello and welcome everyone to Scholastic's fiscal 2026 first quarter earnings call. Today on the call, I'm joined by Peter Warrick, our president and chief executive officer, and Haji Glover, our chief financial officer and executive vice president. As usual, we posted this call's investor presentation on our IR website at investor.scholastic.com, which you may download now if you've not already done so. We would like to point out that certain statements made today will be forward-looking These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipated. In addition, we'll be discussing some non-GAAP financial measures as defined in Regulation G. The reconciliations of those measures to the most directly comparable GAAP measures may be found in the company's earnings release and company financial tables, filed this afternoon on a Form 8K. This earnings release has also been posted to our Investor Relations website. we encourage you to review the disclaimers in the release and investor presentation and to review the risk factors disclosed in the company's annual and quarterly reports filed with the SEC. Should you have any questions after today's call, please send them directly to our IR email address, investor underscore relations at scholastic.com. And now I'd like to turn the call over to Peter Warrick to begin this afternoon's presentation.

Thank you, Jeff, and good afternoon, everyone. Scholastic had a productive summer as we prepared for the back-to-school season and advanced important initiatives. As expected, our first quarter reflected the normal seasonality of our business with an operating loss in line with previous years. We continued to make strong progress on our previously announced real estate monetization process with significant investor interest in both our Soho headquarters and our Jefferson City Distribution Center. We remain on track with the timeline we outlined in July. Haji will share further details in his remarks. At the same time, we're driving greater financial discipline and operational leverage across the company while affirming our full-year guidance. These actions position as well for profitable growth in the quarters and years ahead. In our children's book publishing and distribution segment last quarter, trade sales were solid, Strong continued demand for our global franchises drove unit sales in excess of the overall growth in the children's and young adult markets. Suzanne Collins' Sunrise on the Reaping has now sold 3.7 million copies worldwide since its March release. Looking ahead, in October, we're excited to release the 25th title, in Lauren Tarshis' I Survive series, another middle-grade bestseller, along with the illustrated edition of Catching Fire and the interactive illustrated edition of Harry Potter and the Goblet of Fire. In November, we'll publish a collector's edition of Sunrise on the Reaping to sustain momentum ahead of Lionsgate's feature film adaptation in 2026. We're also building towards another major global release with Dave Pilkey's Dogman, Big Jim Believes. Pre-orders are tracking in line with the last Dogman, positioning this newest title for a strong on sale. The Dogman franchise has more than 70 million copies in print across 48 languages. And next spring, Dave Pilkey's Captain Underpants returns in an entirely new format with the first epic manga illustrated by Motojiro. In book fairs, quarter one represents only a small portion of annual revenue given the school summer vacations, but early indicators are encouraging. Fall bookings are strong and ahead of last year's bookings. Redemption of scholastic dollars, our reward currency in book fairs, is high, indicating good engagement with book fair hosts. We're also making progress in booking more larger fairs and reducing churn. In book clubs, Quarter 1 also represents a small portion of annual revenue with year-over-year change reflecting the timing of mailings. With the integration of trade, fairs, and clubs into the new children's book group, we now have one aligned organization coordinating editorial, merchandising, marketing, and distribution to maximize the reach and value of our publishing across both our proprietary and retail channels. Our initial priority has been streamlining operations and infrastructure, enhancing data analytics, optimizing inventory and overhead, and driving early cost savings while building a foundation for long-term profitable growth. Turning to Scholastic Entertainment, We're positioned for renewed growth as industry greenlighting accelerates and our 360-degree IP strategy gains traction. Now with the capabilities and assets of Nine Story Media Group fully integrated into our strategy and organization. We're using YouTube as a launchpad for new properties after integrating all Nine Story branded channels under the Scholastic banner. Clifford remains a cornerstone franchise, both in traditional linear and on digital platforms. We expect to surpass 10 million monthly views by calendar year end of classic Clifford content on YouTube. And we're supporting this with new publishing, consumer products, and promotional partnerships to lay the groundwork for Clifford's next phase of growth. The trailer for Paris Hilton's Paris and Pops dropped on all social media platforms and has been viewed more than 1.8 million times. The series YouTube launch is coming September 23rd, with episodes releasing weekly and toys launching in fall 2026 with Playmates Toys, as they announced this morning. Scholastic holds global publishing rights, with tie-in books also scheduled for fall 2026. This approach, pairing digital-first content with publishing, is central to our strategy. It not only expands the reach of our IP, but also builds brand affinity that flows back into book sales. As just announced, we've also launched the first-ever Scholastic branded streaming app in partnership with Future Today. The app offers families a free, safe, and trusted destination to enjoy beloved Scholastic programming on demand with nearly 400 half hours of content and will scale to more than 1,300 half hours by fiscal 2027. A significant marketing campaign begins this month to build awareness and adoption. Together, these initiatives are expanding the reach of Scholastic's IP, creating high-margin digital revenue streams and strengthening our position at the intersection of publishing and media. In scholastic education, sales are pressured in the quarter by a volatile funding environment, reflecting the delay of some federal education grants and cancellation of others. Further, several states are facing budget impasses. In this challenging environment, we continue taking steps to strengthen this business for the long term, Under new leadership, the team is refocusing our go-to-market functions on our core strengths, rationalizing the product portfolio and prioritizing investment in high-impact offerings like Knowledge Library. While near-term results remain constrained by the market, education continues to be central to Scholastic's mission. We remain confident in its long-term potential. International results reflected continued portfolio rationalization and the focus on margin improvement. We see growth opportunities in expanding English as a second language programs and in growing markets like India and the Philippines. Overall, Scholastic delivered a solid start to fiscal 2026. We advanced our strategy, including recent reorganizations, invested in some of our strongest franchises and IP, made progress on our potential real estate monetization, and prepared for the important back-to-school season. With these actions, we're affirming our full-year guidance and remain confident in our ability to deliver meaningful profit growth while continuing to create long-term value for our shareholders and lasting impact for children worldwide. Thank you, and I'll now turn it over to Haji.