What Happened?
Shares of educational publishing and media company Scholastic (NASDAQ: SCHL) jumped 4.4% in the afternoon session after it announced a definitive agreement to acquire Cottage Door Press for about $71 million. According to the company’s PR Newswire release, the purchase price is subject to customary adjustments and expands Scholastic’s position in the early childhood book market. Cottage Door is an independent children’s publisher focused on early childhood and novelty formats; Scholastic said the deal is expected to broaden its publishing portfolio across formats and channels and close by year-end 2026, funded with cash and revolver borrowings. Acquiring a fast-growing early-childhood catalog can deepen Scholastic’s reach with young readers and retail partners.
After the initial pop, the shares cooled down to $34.90, up 3.9% from the previous close.
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What Is The Market Telling Us
Scholastic’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 10.5% on the news that the company reported a wider adjusted operating loss and a 3.9% decline in revenue for the third quarter of 2026, missing Wall Street's expectations. According to a company press release, Scholastic reported revenue of $216.8 million for the third quarter of 2026, down 3.9% year on year due to declines in education and children's book publishing and distribution, while its adjusted operating loss widened to $88.7 million. The results trailed Wall Street's expectations, as revenue missed consensus estimates of $224.7 million and the company's adjusted loss of $3.63 per share was wider than the $3.42 per share loss anticipated by analysts. The release also said Scholastic affirmed its full-year guidance projecting 2% to 4% revenue growth and returned approximately $29.6 million to shareholders through share repurchases and dividends.
Scholastic is up 16.4% since the beginning of the year, but at $34.90 per share, it is still trading 26.3% below its 52-week high of $47.34 from June 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Scholastic’s shares 5 years ago would now be looking at only $985.11.
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