Core Viewpoint - Steelcase Inc. reported a fourth quarter revenue increase of 2% year-over-year, driven by a 5% growth in the Americas, while facing a 7% decline in international revenue. The company also highlighted strong order growth in the Americas, indicating a positive outlook for future performance [1][2][5]. Financial Performance - Fourth quarter revenue was $788.0 million, net income was $27.6 million, or $0.23 per share, and adjusted earnings per share were $0.26. The results included $21.8 million of favorable tax items, which increased net income by $13.4 million [1][10]. - For fiscal 2025, the company recorded $3.2 billion in revenue, net income of $120.7 million, and adjusted earnings per share of $1.12, reflecting stable performance compared to the previous year [10][11]. Revenue and Orders - Revenue growth in Q4 2025 was 2% compared to Q4 2024, with a 5% increase in the Americas and a 7% decline in international markets. Organic revenue declined by 5% [2][11]. - Orders grew by 9% in Q4, with a 12% increase in the Americas, driven by large corporate and government customers [3][5]. Gross Margin and Operating Income - Gross margin improved by 70 basis points to 31.9% in Q4, attributed to cost reduction initiatives [7][8]. - Operating income for Q4 was $9.5 million, a decrease of $16.2 million compared to the prior year, primarily due to lower international revenue and higher operating expenses [6][8]. Shareholder Returns and Liquidity - The company returned $84 million to shareholders and strengthened total liquidity by $73 million, ending the quarter with $558.3 million in total liquidity [5][13]. - Steelcase repurchased 2.1 million shares for a total cost of $26.5 million, with $79.9 million remaining under its share repurchase authorization [14]. Outlook - The company expects first quarter fiscal 2026 revenue to be between $760 million and $785 million, translating to a growth of 4% to 8% compared to the prior year [15][16]. - Fiscal 2026 targets include mid-single digit organic revenue growth and modest improvement in adjusted operating income margin [17][19].

Company Overview - Steelcase Inc. is a global leader in design and research focused on enhancing work environments, established in 1912 [2] - The company reported a fiscal year 2024 revenue of $3.2 billion, employing approximately 11,300 individuals globally [2] - Steelcase collaborates with over 30 creative and technology partner brands to provide innovative furnishings and solutions for various work settings, including learning and health [2] Upcoming Financial Results - Steelcase will host a webcast to discuss its fourth quarter and fiscal year 2025 financial results on March 27, 2025, at 8:30 a.m. ET [1] - A news release detailing the financial results will be issued on March 26, 2025, after market close [1] - The webcast will be accessible via the company's investor relations website, with a replay available shortly after the call [1]

Company Overview - Steelcase is a global design, research, and thought leader in the world of work, established in 1912, with fiscal year 2024 revenue of $3.2 billion [5]. - The company employs approximately 11,300 people globally and collaborates with a community of expert dealers in about 770 locations [5]. Leadership Appointment - Megan Blazina has been appointed as vice president, chief legal officer, and secretary, effective March 17, 2025, reporting to Sara Armbruster, Steelcase president and CEO [1][4]. - Blazina brings over 24 years of experience and will oversee all legal services, compliance, corporate strategy, global trade, government affairs, and sustainability [2]. Professional Background - Prior to joining Steelcase, Blazina served as North American vice president & general counsel at Whirlpool Corporation, with extensive experience in litigation, compliance, mergers and acquisitions, and government relations [3][4]. - Blazina has held leadership roles across Europe and Asia, leading global initiatives in e-commerce expansion and crisis management [3]. Strategic Vision - Sara Armbruster expressed confidence in Blazina's ability to shape Steelcase's strategic vision and advance critical initiatives [4]. - Blazina expressed enthusiasm about joining Steelcase during a pivotal moment of transformation and growth, aiming to drive impactful change [5].

Career and Professional Background - The individual has over a decade of experience in investing and managing accounts, including family and friends' portfolios, with a focus on U.S.-based investments and one Europe-focused account [1] - Founded Middle Coast Investing, an investment advisory firm, in 2023, and is developing a Short Investing Guide [1] - Previously worked at Seeking Alpha from 2012-2020, holding roles such as Director of the Seeking Alpha Marketplace, Podcast coordinator, and co-host of The Razor's Edge [1] - Served as VP of Content at Investing.com from 2021-2023, significantly increasing page views and search reach for unique content, and overseeing an acquisition [1] Media and Content Creation - Founded Shortman Studios in 2020, co-hosting The Razor's Edge, an investing podcast that combines prop trading insights with fundamental research, and A Positive Jam, a music podcast [1] - The Razor's Edge podcast has thousands of global listeners and features interviews with industry leaders, executives, and investors [1] Personal Background - Currently resides in Valencia, Spain, with plans to return to the Lake Michigan coast in Michigan periodically [1] - Has a multicultural background, being the son of Russian Jewish immigrants, and has lived abroad since 2008 [1]

Company Overview - Steelcase Inc. (NYSE: SCS) is an office furniture company primarily serving corporate customers [2] - The company is currently facing an uncertain growth outlook despite stronger Q3 shipments [2] Growth Strategy - Steelcase is attempting to position itself in better growth segments to enhance its market performance [2]

Revenue Performance - Revenue for Q3 2025 was $794.9 million, an increase of $17.0 million or 2% compared to Q3 2024, driven by volume growth in the Americas [26]. - Organic revenue growth in Q3 2025 was 3%, with a 7% increase in the Americas and an 8% decline in International markets [28]. - Year-to-date revenue for 2025 was $2,378.0 million, a decrease from $2,384.4 million in the same period of 2024 [25]. - Revenue for year-to-date 2025 was $2,378.0 million, representing a decline of $6.4 million compared to the prior year, driven by lower volume in International and the impact of a divestiture in the Americas [38]. - The Americas revenue represented 77.3% of consolidated revenue in Q3 2025, with a 5% increase compared to the prior year driven by higher volume and pricing benefits [45]. - Revenue increased by $55.0 million or 3% in year-to-date 2025 compared to the prior year [47]. Cost and Expenses - Cost of sales as a percentage of revenue improved by approximately 120 basis points in Q3 2025 compared to the prior year, with a 190 basis point improvement in the Americas [28]. - Operating expenses increased by $17.3 million in Q3 2025, or 160 basis points as a percentage of revenue, influenced by higher employee costs and variable compensation expenses [28]. - Operating expenses decreased by $16.6 million year-to-date 2025, or 60 basis points as a percentage of revenue, compared to the prior year, reflecting a $42.1 million gain on the sale of land [32]. - Operating expenses increased by $12.6 million in Q3 2025, or 70 basis points as a percentage of revenue, compared to the prior year [47]. - Operating expenses decreased by $12.3 million in year-to-date 2025, or 90 basis points as a percentage of revenue, compared to the prior year [48]. Net Income and Earnings - Net income for Q3 2025 was $19.1 million, representing 2.4% of revenue, compared to $30.8 million or 4.0% in Q3 2024 [23]. - Adjusted diluted earnings per share for Q3 2025 were $0.16, down from $0.26 in Q3 2024 [24]. - Net income for year-to-date 2025 was $93.1 million, with diluted earnings per share of $0.78, compared to net income of $59.8 million and diluted earnings per share of $0.50 in the prior year [38]. - The company reported a net income of $93.1 million for the nine months ended November 22, 2024, up from $59.8 million in the prior year, representing a growth of approximately 56% [69]. International Performance - International revenue decreased by 6% in Q3 2025, primarily due to declines in most Asia Pacific markets [26]. - The operating loss in International was $5.5 million in Q3 2025, a decline of $12.1 million compared to operating income of $6.6 million in the prior year [52]. - Adjusted operating loss of $2.4 million in Q3 2025 represented a decline of $11.8 million compared to adjusted operating income of $9.4 million in the prior year [52]. Liquidity and Cash Flow - Total liquidity sources available as of November 22, 2024, amounted to $900.7 million, an increase from $807.3 million on February 23, 2024 [59]. - Cash and cash equivalents totaled $365.2 million as of November 22, 2024, with 87% located in the U.S. [66]. - Net cash provided by operating activities decreased to $147.9 million for the nine months ended November 22, 2024, compared to $251.3 million for the same period in 2023, reflecting a decline of approximately 41% [69]. - Cash used in investing activities totaled $(28.0) million for the nine months ended November 22, 2024, compared to $(5.2) million in the same period of 2023, indicating a significant increase in investment outflows [70]. - The company experienced a net increase in cash and cash equivalents of $46.5 million for the nine months ended November 22, 2024, compared to $171.9 million in the prior year [68]. Shareholder Returns - The company repurchased 2,864,002 shares of Class A common stock in year-to-date 2025, compared to 512,707 shares in year-to-date 2024, reflecting a substantial increase in share repurchases [73]. - Dividends declared and paid per common share remained consistent at $0.100 for each quarter in both year-to-date 2025 and 2024, totaling $0.300 for the year [73]. Capital Expenditures and Investments - Capital expenditures for year-to-date 2025 are expected to total approximately $50 million, alongside an additional $50 million for capitalized costs related to cloud computing arrangements [75]. - The company has a global committed bank facility of $300.0 million, with no borrowings outstanding as of November 22, 2024 [74]. - Total long-term debt as of November 22, 2024, was $446.9 million, consisting of term notes due in 2029 with an effective interest rate of 5.6% [74].

Financial Data and Key Metrics Changes - In Q3, the company achieved 3% organic revenue growth and adjusted earnings of $0.30 per share, exceeding initial targets for the fiscal year [8][28] - The Americas segment reported 7% organic revenue growth and an adjusted operating margin of 8.1%, marking the fifth consecutive quarter of year-over-year order growth [9][35] - The International segment experienced an 8% decline in revenue, attributed to lower volume and competitive discounting [28][30] Business Line Data and Key Metrics Changes - The Americas segment's strong performance was driven by favorable shipment timing and backlog, while the International segment faced challenges due to soft orders and project shipment delays [28][30] - The healthcare business within the Americas showed strong revenue growth, supported by increasing demand for healthcare services [19][20] Market Data and Key Metrics Changes - The company noted improved order trends from large corporate customers towards the end of Q3, with a strong continuation into early December [10][36] - In the International segment, there was year-over-year order growth in China and nearly 20% sequential growth in total Asia-Pacific orders compared to the previous quarter [37] Company Strategy and Development Direction - The company is focusing on transformation by adapting to changes in workplace dynamics, including increased reliance on technology and AI [13][15] - The strategy includes community-based design to create flexible workspaces that cater to diverse employee needs [17] - The company is also emphasizing sustainability through initiatives like Circular by Steelcase, which supports customers in meeting carbon reduction goals [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fiscal 2025 adjusted earnings per share finishing above the targeted range, despite industry growth being slower than expected [26][41] - The company anticipates continued demand growth from large corporate customers, particularly in the financial services and technology sectors [42][44] Other Important Information - The company is implementing additional restructuring actions in the International segment to address ongoing challenges and is targeting approximately $5 million in annualized cost savings by early fiscal 2026 [30] - The company is facing supply chain disruptions due to a laminate supplier affected by Hurricane Helene, which may impact operations into fiscal 2026 [39][40] Q&A Session Summary Question: Clarification on ERP implementation costs - Management clarified that the projected $20 million impact is related to implementation costs and does not include inefficiencies associated with the go-live process [51][56] Question: Trends in continuing business - Management noted a decline in continuing business orders compared to the previous year but expects improvement as more employees return to the office [70][72] Question: Competitive discounting in International markets - Management indicated that competitive discounting pressures are broad-based, particularly in Western Europe, and are strategically targeting volume growth in specific markets [76][78] Question: Exposure to potential tariffs - Management is evaluating contingency plans regarding potential tariffs and is taking actions such as building additional inventory to mitigate risks [86][90] Question: Confidence in International segment recovery - Management expressed that macroeconomic factors and targeted account strategies are crucial for driving revenue growth in the International segment [108][110]

Group 1: Earnings Performance - Steelcase reported quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, with an earnings surprise of 30.43% [1] - The company posted revenues of $794.9 million for the quarter ended November 2024, surpassing the Zacks Consensus Estimate by 0.15% and showing an increase from $777.9 million year-over-year [2] - Over the last four quarters, Steelcase has surpassed consensus EPS estimates four times, but has only topped consensus revenue estimates once [2] Group 2: Stock Performance and Outlook - Steelcase shares have declined approximately 3.5% since the beginning of the year, contrasting with the S&P 500's gain of 26.9% [4] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $845.8 million, and for the current fiscal year, it is $1.01 on revenues of $3.22 billion [8] - The estimate revisions trend for Steelcase is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Group 3: Industry Context - The Business - Office Products industry, to which Steelcase belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Revenue Performance - Revenue for Q3 2025 was $794.9 million, a 2% increase from $777.9 million in Q3 2024, with a 5% growth in the Americas and a 6% decline in International[2][3] - Revenue for the quarter was $794.9 million, compared to $777.9 million in the previous quarter, reflecting a growth of 2.5%[25] - Revenue for the fiscal year 2024 reached $3.2 billion, with a quarterly revenue of $794.9 million for November 2024, compared to $777.9 million in November 2023[40] - Projected revenue for Q4 2025 is estimated to be between $770 million and $795 million, indicating an organic decline of 4% to 7% compared to Q4 2024[24] Earnings and Income - Adjusted earnings per share for Q3 2025 were $0.30, compared to $0.29 in Q3 2024, while net income was $19.1 million, down from $30.8 million[2][20] - Net income for the quarter ended November 22, 2024, was $19.1 million, a decrease from $30.8 million in the previous quarter[23] - Basic earnings per share increased to $0.79 for the nine months ended November 2024, up from $0.50 in the prior year, reflecting a 58% growth[41] Operating Performance - Operating income for Q3 2025 was $41.0 million, a decrease of $2.8 million compared to the prior year, while adjusted operating income was $47.3 million, down $2.0 million[7][9] - Operating income for the latest quarter was $46.5 million, representing a 7.6% increase compared to $37.2 million in the same quarter last year[26] - Adjusted operating income was $49.7 million, reflecting an 8.1% increase from $39.9 million year-over-year[26] Margins and Costs - Gross margin improved by 100 basis points to 33.4% in Q3 2025, driven by revenue growth in the Americas and cost reduction initiatives[8][11] - The company reported a gross profit margin of 33.4% for the quarter ended November 22, 2024, compared to 32.4% in the previous quarter[25] - Gross profit for the latest quarter was $265.4 million, up from $252.3 million in the same quarter last year[40] - Operating expenses increased by $17.3 million to $223.8 million in Q3 2025, primarily due to higher employee costs[9] Liquidity and Debt - Total liquidity increased by $152 million to $576.6 million at the end of Q3 2025, with total debt at $446.9 million[11] - Total current assets rose to $1,065.1 million as of November 2024, compared to $959.4 million in February 2024, marking an increase of 11%[41] - Total liabilities increased to $1,388.5 million as of November 2024, up from $1,349.6 million in February 2024, indicating a growth of 2.9%[42] - Total long-term liabilities decreased to $710.9 million as of November 2024, down from $742.5 million in February 2024, a reduction of 4.2%[42] Cash Flow and Investments - The company reported a net cash provided by operating activities of $147.9 million for the nine months ended November 2024, compared to $251.3 million in the prior year, a decrease of 41%[43] - Capital expenditures for the period were $28.0 million, compared to $5.2 million in the previous year, indicating an increase in investment[43] Strategic Outlook - The company expects Q4 2025 revenue to be between $770 million and $795 million, reflecting a potential decline of 1% to growth of 3% compared to the prior year[13] - The backlog at the end of Q3 2025 was approximately $664 million, 5% lower than the prior year, but orders in the first three weeks of Q4 grew by 15%[13] - The company anticipates continued growth in organic revenue, excluding the impact of acquisitions and divestitures[30] - Steelcase is focused on expanding its market presence and enhancing product offerings through innovation and strategic partnerships[39]

Core Insights - Steelcase Inc. reported a third-quarter revenue of $794.9 million, reflecting a 2% increase compared to the prior year, driven by a 5% growth in the Americas and a 6% decline in International markets [1][2][3] - The company achieved a gross margin improvement of 100 basis points, reaching 33.4%, attributed to revenue growth in the Americas and cost reduction initiatives [6][19] - Total liquidity increased by $152 million, totaling $576.6 million at the end of the third quarter, while total debt stood at $446.9 million [9] Revenue and Orders - Revenue growth was 2%, with organic revenue growth at 3%. The Americas experienced a 5% revenue growth, while International revenue declined by 6% [2][17] - Orders adjusted for divestiture and currency translation effects showed a 2% growth in the Americas but an 8% decline in International orders [3][11] - The Americas' order growth was primarily driven by government customers, while the International decline was influenced by most markets in Asia Pacific and France [3][5] Earnings Performance - Net income for the third quarter was $19.1 million, or $0.16 per share, compared to $30.8 million, or $0.26 per share, in the prior year [1][23] - Adjusted earnings per share increased to $0.30 from $0.29 year-over-year [1][18] Operating Income and Expenses - Operating income decreased to $41.0 million from $43.8 million in the prior year, impacted by previous year's gains from asset sales and a decrease in acquisition earnout liability [4][23] - Operating expenses rose to $223.8 million, an increase of $17.3 million compared to the prior year, driven by higher employee costs [7][23] Future Outlook - The company expects fourth-quarter fiscal 2025 revenue to be between $770 million and $795 million, translating to a decline of 1% to growth of 3% compared to the prior year [11][12] - Projected earnings per share for the fourth quarter is estimated to be between $0.17 to $0.21, with adjusted earnings per share between $0.20 to $0.24 [12][22] Business Segment Performance - The Americas segment reported revenue of $614.7 million, a 5% increase, while the International segment reported $180.2 million, a 6% decline [15][17] - The Americas accounted for 77.3% of total revenue, while International contributed 22.7% [15][17] Cost Management - The company implemented restructuring actions projected to yield approximately $5 million in annualized cost savings by the start of fiscal 2026 [5][19] - Other expenses included a $15.2 million non-cash charge related to the annuitization of a pension plan [8]