Scholastic Stock Plunges as Uncertainty Over Government School Funding Hurts Results

Scholastic (SCHL) shares sank Friday after the children’s books publisher reported a quarterly loss as schools pulled back on spending because of uncertainty over government funding.

The company posted a fiscal 2026 first-quarter loss of $97 million, compared with the $92 million loss recorded a year ago. Revenue fell 5% to $225.6 million, falling short of analysts’ expectations.

Revenue in the company’s Education Solutions segment plunged 28% to $40 million, which Scholastic attributed to “increased funding uncertainty for schools and school districts, which has impacted spending on supplemental curriculum materials.”

CEO Pete Warwick said that the company was “focused on optimizing capital allocation and strengthening our balance sheet to enhance shareholder value.” To that end, he noted that the firm’s recently-launched moves to “evaluate potential sale-leasebacks of key real estate assets have drawn substantial interest.”

Scholastic is in the process of identifying potential investors for sale-leaseback deals for its office and retail real estate in New York City and distribution centers in Jefferson City, Mo. The company anticipates both processes to conclude this fall. Scholastic added that it “continues to believe that its significant real estate assets, if monetized, could provide significant additional liquidity to be deployed in accordance with its capital allocation priorities, including debt reduction and share repurchases.”

Shares of Scholastic were down about 12% in recent trading. Coming into today’s session, the stock was up nearly 30% in 2025.