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Scholastic (SCHL) to Post Q2 Earnings: What's in the Offing?

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Scholastic Corporation (SCHL - Free Report) is scheduled to report second-quarter fiscal 2020 financial numbers on Dec 19, before the market opens. Notably, in the trailing four quarters, the company’s bottom line surpassed the Zacks Consensus Estimate by 6%, on average.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.77, indicating a 15.3% decline from the year-ago quarter’s reported figure. Notably, the consensus estimate has been unchanged over the past 30 days. The consensus mark for revenues stands at $591.2 million, suggesting a 2.2% dip from the year-ago quarter’s reported figure.

Scholastic Corporation Price and EPS Surprise

 

Key Factors to Note

Scholastic has been focused on fair segmentation and targeting, enhanced POS devices, and automation of operational processes to schedule fairs. The company’s digital English language learning programs, which target middle-class customers, have been receiving positive consumer feedback.

Further, Scholastic has been focused on reducing inventory purchases via efficient buying and printing initiatives, and utilizing Fairs Customer Incentive programs. It remains on track with its digital transformation drive pertaining to its book clubs business in order to transit more parents and students to online ordering.

Moreover, the company has been making efforts to improve margins by undertaking pricing actions, increased promotions, better customer service and deployment of a real-time management dashboard for better analytics.

Further, management expects the international segment to have witnessed growth in trade publishing. However, any fluctuation in foreign currency might have hurt the segment’s fiscal second-quarter revenues to some extent.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Scholastic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Scholastic carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

CarMax (KMX - Free Report) currently has an Earnings ESP of +0.21% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills (GIS - Free Report) has an Earnings ESP of +1.58% and a Zacks Rank #3 at present.

Amazon.com (AMZN - Free Report) currently has an Earnings ESP of +6.74% and a Zacks Rank of 3.

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