Scholastic Corporation (SCHL)
Profitability ratios
Return on sales
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 51.74% | 55.65% | 53.85% | 53.41% | 48.74% |
| Operating profit margin | 1.15% | 0.91% | 6.24% | 5.93% | -0.84% |
| Pretax margin | -0.08% | 1.02% | 6.60% | 5.46% | -1.40% |
| Net profit margin | -0.12% | 0.76% | 5.08% | 4.93% | -0.84% |
The analysis of Scholastic Corporation's profitability ratios over the period from May 2021 to May 2025 reveals several noteworthy trends and fluctuations.
Gross profit margin has demonstrated a consistent upward trajectory, rising from 48.74% in 2021 to a peak of 55.65% in 2024. This indicates an improvement in the company's ability to manage cost of goods sold relative to revenues, reflecting enhanced pricing strategies, cost control, or product mix adjustments. However, a slight decline to 51.74% is observed in 2025, suggesting some erosion in gross profitability, potentially due to increased costs or competitive pricing pressures.
Operating profit margin has experienced volatility, transitioning from a negative value of -0.84% in 2021 to positive figures in subsequent years. In 2022, it improved markedly to 5.93%, then marginally increased to 6.24% in 2023, indicating operational improvements and better cost management at the operating level. In 2024, the ratio declined sharply to 0.91%, implying a substantial reduction in operating efficiency or increased operating expenses. The margin slightly increased again to 1.15% in 2025, but remains modest, reflecting ongoing challenges in operational profitability.
The pretax margin followed a similar pattern, turning positive from -1.40% in 2021 to 5.46% in 2022, and further to 6.60% in 2023. The decline to 1.02% in 2024 signals a reduction in pre-tax profitability, possibly due to increased interest expenses, non-operating costs, or other financial charges. The marginal negative figure of -0.08% in 2025 indicates a near break-even point at the pre-tax level, with potential financial pressures impacting profitability before tax.
Net profit margin also exhibits significant fluctuations. After being negative at -0.84% in 2021, the ratio moved into positive territory at 4.93% in 2022, and slightly increased to 5.08% in 2023, signifying improved bottom-line performance. However, the net margin decreased sharply to 0.76% in 2024, reflecting reduced net income relative to revenues, and ultimately turned negative at -0.12% in 2025. This decline could be attributable to increased expenses, tax costs, or non-operational charges impacting net profitability.
Overall, while Scholastic Corporation shows signs of operational and gross profit improvement in certain periods, recent years have seen a deterioration in profitability margins, particularly in 2024 and 2025. These trends suggest increased cost pressures, operational challenges, or financial expenses impacting overall profitability at multiple levels.
Return on investment
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.96% | 0.87% | 5.69% | 5.02% | -0.54% |
| Return on assets (ROA) | -0.10% | 0.72% | 4.63% | 4.17% | -0.54% |
| Return on total capital | 1.55% | 1.78% | 9.77% | 7.60% | -2.79% |
| Return on equity (ROE) | -0.20% | 1.19% | 7.43% | 6.65% | -0.92% |
The profitability ratios of Scholastic Corporation over the period from May 31, 2021, through May 31, 2025, exhibit notable fluctuations and a general trend of improvement followed by a decline.
Starting with the Operating Return on Assets (Operating ROA), the company initially experienced a negative value of -0.54% in May 2021, indicating operating inefficiencies or losses relative to its assets. This ratio improved significantly in May 2022 to 5.02%, reflecting a strong recovery in operational profitability. The positive trend continued into 2023, reaching 5.69%, suggesting sustained operational strength. However, in the subsequent years, the ratio declined to 0.87% by May 2024 before slightly increasing to 0.96% in May 2025, yet remaining markedly below its peak in 2023, indicating a moderation in operational performance.
The Return on Assets (ROA), which measures net income relative to total assets, mirrored a similar pattern. It was negative at -0.54% in 2021, but then increased sharply to 4.17% in 2022 and further to 4.63% in 2023, reflecting improved profitability and asset utilization. The decline in 2024 to 0.72%, and subsequent negative value of -0.10% in 2025, suggests a deterioration in net income generation relative to assets, approaching breakeven.
Regarding the Return on Total Capital, the data indicates a negative figure of -2.79% in 2021, signifying losses or inefficiencies in capital utilization during that period. A significant improvement followed in 2022, with the ratio rising to 7.60%, and further to 9.77% in 2023, marking a period of strong profitability and effective capital deployment. However, in 2024 and 2025, the ratio declined to 1.78% and 1.55%, respectively, reflecting a waning of this profitability measure and potentially pointing to increased challenges in capital efficiency.
The Return on Equity (ROE), an essential metric for shareholders, was negative at -0.92% in 2021, then increased to 6.65% in 2022 and 7.43% in 2023, indicative of improved profitability and shareholder returns. Nevertheless, in 2024, the ROE declined sharply to 1.19%, and ultimately turned negative at -0.20% in 2025, signaling reduced profitability for shareholders and a possible decline in the company’s net income relative to equity.
Overall, the analysis reveals that Scholastic Corporation experienced a robust recovery in profitability metrics during 2022 and 2023, followed by a decline in 2024 and 2025. The fluctuations suggest periods of operational and financial challenges post-2023, with recent data indicating diminished profitability across multiple ratios.