Scholastic Corp (NASDAQ: SCHL) reported Q3 EPS of ($0.32), $0.05 worse than the analyst estimate of ($0.27). Revenue for the quarter came in at $360.1 million versus the consensus estimate of $371.1 million.

Richard Robinson, Scholastic Chairman, President and Chief Executive Officer commented: "Consolidated revenue in the seasonally lower third quarter was up 4% over the prior year, keeping us on course to achieve our sales targets for fiscal 2019. Children's Book Publishing and Distribution was up 8% reflecting particularly strong performance in trade and media, while Education was on plan, setting the stage for the fourth quarter where almost half of the year's revenue is recorded. Trade publishing also performed well in International, though the strong dollar continued to affect revenues. Best-selling titles included Fantastic Beasts™: The Crimes of Grindelwald, series publishing such as Wings of Fire, The Baby-Sitters Club® graphic novels, and Dav Pilkey's Dog Man, as well as titles by Aaron Blabey and the 20th anniversary publishing for Harry Potter.

Mr. Robinson continued, "In February, the Education Group began customer presentations of Scholastic Literacy, our comprehensive core reading curriculum, which includes authentic and culturally relevant books, integrated writing and digital resources, combining to teach the basic skills of reading required for students to succeed in grades K to 6. The market has responded very positively to the program, which already has successfully competed in several reading adoptions, though the revenues will not be received until the first quarter of fiscal 2020. Meanwhile, the education sales force is also concentrating on selling our supplementary reading programs for which revenues will be received in the fourth quarter of the current fiscal year. We also successfully implemented sales tax collection for book clubs in February, responding to the Supreme Court\'s Wayfair decision, but the cost of implementation affected operating income this quarter. With higher labor costs in fulfillment, combined with cost increases in paper and printing, the impact of sales tax collection, and the effect of the stronger U.S. dollar in international, we now project our full year earnings to be at the low end of our guidance range. In the fourth quarter, we are focused on reducing operating costs, as well as achieving our end-of-year education sales."

GUIDANCE:

Scholastic Corp sees FY2019 EPS of $1.60-$1.70, versus the consensus of $1.53. Scholastic Corp sees FY2019 revenue of $1.65-1.7 billion, versus the consensus of $1.7 billion.

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