Scholastic’s Stock Plunges After ‘Hunger Games’ Sales EbbNick Turner
Scholastic Corp., the world’s largest publisher of children’s books, fell 14 percent in New York trading after posting a deeper quarterly loss, hurt by a shrinking appetite for “The Hunger Games” trilogy.
The fiscal third-quarter net loss widened to $20.1 million, or 63 cents a share, from $10.3 million, or 33 cents, a year earlier, Scholastic said today in a statement. Sales tumbled 19 percent to $380.5 million in the period, which ended on Feb. 28.
The New York-based publisher blamed the shortfall on lower-than-expected orders of “The Hunger Games,” a dystopian novel about teens forced to fight to the death. The trilogy of books have helped fuel sales since the first installment was published in 2008 and inspired a movie series. Scholastic’s investments in digital technology also hurt its bottom line, the company said.
“We knew that fiscal 2013 would be challenging,” Chief Executive Officer Richard Robinson said in the statement. “However, third-quarter sales of ‘The Hunger Games’ trilogy were significantly lower than our expectations, particularly in the U.S., Canada and Australia.”
The shares fell $4.32 to $26.75, marking the biggest one-day decline since November. Before the plunge, the stock had climbed 5.1 percent this year.
Scholastic also cut its forecast for fiscal 2013, which ends on May 31. The company now expects sales of $1.75 billion to $1.8 billion, down from a previous projection of as much as $1.9 billion. Excluding one-time items such as cost-cutting programs, earnings will be $1.10 to $1.30 a share, compared with an earlier forecast of as much as $1.60.
Sales of “The Hunger Games” got a boost in the year-earlier period from the March 2012 debut of the first movie in the trilogy. A second film, “The Hunger Games: Catching Fire,” is coming, though it’s not slated to reach theaters until November.
Meanwhile, Scholastic is looking to other series, such as the “Captain Underpants” series and “Tea Time with Sophia Grace and Rosie,” to help maintain revenue.