Steelcase Inc. Earnings
Steelcase Inc. has announced its financial results for the third quarter (Q3) of fiscal 2025, revealing moderate revenue growth despite declines in net income. The furniture manufacturer reported total revenue of $794.9 million, marking a 2% increase compared to the $777.9 million recorded in the third quarter of the previous year. Net income, however, witnessed a 38% decrease, falling from $30.8 million to $19.1 million, primarily due to a non-cash charge associated with pension plan annuitization.
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|---|---|---|---|
| Total Revenue | $794.9M | $777.9M | +2% |
| Net Income | $19.1M | $30.8M | -38% |
| Earnings Per Share (EPS) | $0.16 | $0.26 | -38% |
| Adjusted Earnings Per Share | $0.30 | $0.29 | +3% |
| Operating Income | $41.0M | $43.8M | -6% |
| Adjusted Operating Income | $47.3M | $49.3M | -4% |
Steelcase Inc. Results
This quarter's financial performance indicates a mixed result for Steelcase. Despite the dip in net income and operating income, the company achieved an adjusted earnings per share (EPS) of $0.30, which is a 3% increase from last year's $0.29. Steelcase outperformed its adjusted EPS target. The operating income also saw a slight decline of 6%, landing at $41 million, while the adjusted operating income decreased 4%, reaching $47.3 million.
Revenue Breakdown
Steelcase's performance varied significantly across different geographic segments. The Americas segment witnessed a solid 5% year-on-year growth, driven by a higher backlog of shipments and increased demand among government, corporate, healthcare, and education clients. This growth signifies Steelcase's ability to leverage strong market positions and cater effectively to a range of institutional clients.
On the other hand, the International segment grappled with a 6% decline. Weak demand in the Asia Pacific and France contributed to this downturn, partially offset by robust growth in Germany, indicating regional market challenges but also potential areas of strength that Steelcase can build on.
| Segment | YoY Growth | Commentary |
|---|---|---|
| Americas | +5% | Growth driven by higher backlog shipments and increased revenue from government, corporate, healthcare, and education clients. |
| International | -6% | Decline primarily due to weak markets in Asia Pacific and France, partially offset by growth in Germany. |
Key Developments
There were several notable developments within Steelcase this quarter. The company managed to improve its gross margin by 100 basis points. This improvement came on the back of U.S. revenue growth and various cost-saving initiatives, reflecting Steelcase's strategic focus on efficiency and margin enhancement.
Furthermore, total liquidity increased by $152 million from the previous year, providing a stronger financial foundation. The firm initiated restructuring actions expected to generate annual savings of approximately $5 million by fiscal 2026, demonstrating proactive financial and operational management.
Comments from Company Officers
Sara Armbruster, President and CEO of Steelcase, accentuated the robust performance in the Americas and the positive trends noticed among large corporate clients. She emphasized the strategic evolution of the company's capabilities to adapt to changing work patterns—indicating a forward-thinking approach geared towards staying relevant in a dynamic market.
Chief Financial Officer Dave Sylvester addressed the softer-than-anticipated international results, which he attributed to shipment delays and fluctuating demand. Nevertheless, he remained optimistic, citing increased project activities from global clients as a reassuring sign for future prospects.
Dividends and Share Repurchases
The Steelcase Board of Directors declared a quarterly cash dividend of $0.10 per share, ensuring returns to shareholders with payment scheduled on or before January 13, 2025. This action demonstrates a commitment to maintaining shareholder value amidst fluctuating earnings.
Steelcase Inc. Stock Forecast
Following the release of its earnings, Steelcase’s stock exhibited a slight increase of 0.69%, offering a glimpse of market confidence in the company’s trajectory. Considering its ongoing operational efficiencies, strategic geographic focus, and resilient revenue streams, Steelcase's stock could see potential highs between $12 and $14 over the next quarter. Conversely, given external market pressures particularly in the international segment, lows might occur around $10 to $11.
In summary, while Steelcase faced specific headwinds in Q3 2025 from international market weaknesses and a heavy pension charge, it remains on a stable path due to its robust performance in the Americas and enhanced operational efficiencies. This balanced outlook paves the way for cautious optimism as Steelcase progresses.
