Shares of Scholastic Corporation (SCHL) plummeted 5.47% in Thursday's trading session following the release of its fiscal fourth quarter and full-year 2025 financial results. The sharp decline came despite the company reporting a 2% increase in annual revenue to $1.63 billion, as investors focused on the substantial drop in earnings per share (EPS).

Scholastic, a leading global children's publishing, education, and media company, announced that its adjusted EBITDA met the original guidance at $91.2 million. However, the company reported a significant 52% decrease in EPS compared to the previous year. This substantial earnings decline appears to be the primary driver behind the stock's negative performance.

While Scholastic highlighted positive aspects such as strong performance in Book Fairs and higher revenues from new releases in Trade Publishing, these gains were offset by decreased sales in the Education Solutions segment. The company's Q4 adjusted EPS came in at $0.48, which may have fallen short of market expectations. Looking ahead, Scholastic provided an outlook for fiscal 2026, projecting adjusted EBITDA between $160 million to $170 million, indicating potential for future growth. However, the market's immediate reaction suggests that investors are more concerned with the current earnings decline and challenges in the Education Solutions segment.