Why Scholastic Stock Was Flopping on Friday: The Unsettling Truth Behind the Plunge

Scholastic shares took a nosedive Friday—another reminder that traditional education stocks can't keep up with digital disruption.

Earnings Miss Sparks Sell-Off

The publisher missed revenue targets by double digits. Print book sales slumped as digital alternatives continue eating their lunch.

Digital Shift Accelerates

While Scholastic dabbles in e-books, it's getting outmaneuvered by tech-native education platforms. Parents and schools are voting with their wallets—and they're choosing interactive digital content over dusty textbooks.

Another legacy player learning that in today's market, if you're not innovating, you're just managing decline. Maybe they should've invested in blockchain-based educational tokens instead.

Booking a loss

Scholastic opened the book on its fiscal first quarter of 2026 just after market close Thursday. It revealed that revenue for the period was $225.6 million, which was down by nearly 12% year over year. On a slightly brighter note the company's operating loss narrowed a bit, coming in at $81.9 million ($2.52 per share) against the year-ago shortfall $85.6 million.

Image source: Getty Images.

Both figures were under the consensus analyst estimates. Collectively, pundits tracking the stock were modeling more than $240 million for revenue, and a narrower net loss of $2.45 per share.

Scholastic, which depends on municipal and local budgets since many of its end customers are public schools, said that "funding uncertainties" for such institutions negatively affected it during the quarter. This was felt particularly in the company's education solutions unit, which saw a 28% drop in revenue to slightly over $40 million.

Anticipating top-line improvement

In its earnings release, Scholastic reaffirmed its guidance for the entirety of the current fiscal year. It believes its non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) will land at $160 million to $170 million, on revenue that should be 2% to 4% higher than that of the previous fiscal year.