Core Insights - Steelcase Inc. (SCS) is set to release its first-quarter fiscal 2026 results on June 25, with a history of positive earnings surprises, averaging 31.5% over the last four quarters [1] Revenue Expectations - The consensus estimate for SCS's first-quarter fiscal 2026 revenues is $756 million, reflecting a 3.9% increase from the same quarter last year, driven by positive office leasing activity in the U.S. and Europe [2][9] Segment Performance - The Americas segment is expected to perform well due to strong demand from large corporate and government clients, with U.S. leasing volume increasing over 15% from the first quarter of 2024 [3][9] - The International segment is anticipated to improve, particularly in India and Spain, with large transactions in the European market contributing to recovery, especially in the U.K. and Germany [4][9] Earnings Projections - The Zacks Consensus Estimate for earnings is set at 12 cents per share, indicating a 25% decrease from the previous year's quarter [4] - The current model does not predict a definitive earnings beat for SCS, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [5][6]

Financial Results Announcement - Steelcase Inc. will webcast a discussion of its first quarter fiscal year 2026 financial results on June 26, 2025, at 8:30 a.m. ET [1] - A news release detailing the financial results will be issued on June 25, 2025, after the market closes [1] Annual Meeting of Shareholders - Steelcase Inc. will hold its Annual Meeting of Shareholders on July 9, 2025, via live webcast at 11:00 a.m. ET [2] - The webcast will be accessible online, and a replay will be available after the event concludes [2] Company Overview - Steelcase Inc. is a global design and thought leader focused on improving work environments [3] - The company collaborates with over 30 creative and technology partner brands to research, design, and manufacture furnishings and solutions for various workspaces [3] - Steelcase employs approximately 11,300 individuals and aims to enhance the wellbeing of people and the planet [3] - The company's solutions are distributed through a global network of expert dealers in around 790 locations [3]

Group 1 - Steelcase Inc. has good growth potential moving forward due to improving order trends and a strong backlog, which provides visibility for near-term revenue growth [1] - The company is expected to benefit from improvements in office occupancy rates and the return-to-office trend [1] Group 2 - The focus is on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1] - The company is recognized among the top 50 financial experts based on the consistency of stock recommendations and returns generated [1]

Revenue and Customer Concentration - The Americas segment generated revenue with no single industry representing more than 18% of the segment's revenue in 2025[30]. - The largest independent Steelcase dealer in the Americas accounted for approximately 6% of the segment's revenue in 2025, while the five largest independent dealers collectively accounted for about 15%[31]. - The International segment's largest independent dealer accounted for approximately 4% of its revenue in 2025, with the top five dealers making up about 10%[34]. - The largest customer contributed approximately 2% to consolidated revenue in 2025, with the top five customers accounting for about 6%[37]. - Foreign revenue accounted for approximately 28% of consolidated revenue in 2025, down from 29% in 2024[196]. Financial Performance and Investments - Total investments in unconsolidated joint ventures and other equity investments amounted to $53.3 million as of February 28, 2025[36]. - Research, design, and development expenses were $50.4 million in 2025, up from $48.2 million in 2024 and $44.4 million in 2023[47]. - Cost of sales decreased by approximately $6 million in 2025 and $14 million in 2024 due to changes in commodity costs[204]. - A 10% strengthening of the U.S. dollar would have increased operating income by approximately $16.8 million in 2025 and $16.5 million in 2024[197]. - A 1% increase in interest rates would have increased net income by approximately $2 million in 2025 and $1 million in 2024[201]. - An additional 1% increase in commodity prices would have decreased operating income by approximately $12 million in 2025 and $11 million in 2024[204]. Employment and Manufacturing - As of February 28, 2025, the company employed approximately 11,300 individuals, including about 6,600 in manufacturing and distribution[56]. - The company’s manufacturing model is predominantly make-to-order, with standard lead times typically ranging from four to six weeks[40]. Environmental Compliance - The company is subject to various environmental laws and believes it is in substantial compliance, with established reserves deemed adequate for anticipated remediation costs[58]. Currency and Investment Valuation - Cumulative net currency translation adjustments reduced shareholders' equity by $75.9 million as of February 28, 2025, compared to $68.5 million as of February 23, 2024[198]. - Net foreign currency exchange losses were $2.0 million in 2025 and $1.0 million in 2024[199]. - The net cash surrender value of variable life COLI policies was $64.4 million as of February 28, 2025, with 60% in fixed income and 40% in equity investments[205]. - A 10% adverse change in the value of the equity portion of variable life COLI investments would reduce net income by approximately $3 million in both 2025 and 2024[206].

Group 1 - Steelcase's Gesture office chair has been awarded the title of best office chair by Expert Consumers for its exceptional comfort and ergonomic design [1][4] - The Gesture chair features 3D LiveBack® technology and adjustable 360° arms, addressing the ergonomic needs arising from prolonged device usage [2][5] - The chair is designed to support a wide range of postures and user needs, reflecting the evolving demands of modern workplaces [4][7] Group 2 - Recent studies indicate that prolonged sitting and technology use have reshaped workplace ergonomics, increasing the demand for adaptable seating solutions [5][7] - Gesture's design includes features that enhance comfort during long workdays, such as a flexible seat edge and intuitive adjustments for a tailored fit [6][7] - Steelcase has over a century of experience in the office furniture industry, focusing on designing people-centered workplaces that enhance productivity and engagement [8]

Group 1 - Steelcase (SCS) closed at $11.46, with a 0.3% gain over the past four weeks, and a mean price target of $17 indicates a potential upside of 48.3% [1] - The average price targets range from a low of $16 to a high of $18, with a standard deviation of $1.15, suggesting a 39.6% increase at the lowest estimate and a 57.1% increase at the highest [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements [11][12] Group 2 - The Zacks Consensus Estimate for the current year has increased by 5.7% over the last 30 days, with two estimates moving higher and no negative revisions [12] - Steelcase currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can indicate the direction of price movement [13]

Steelcase (SCS) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. Individual inv ...

Financial Data and Key Metrics Changes - The full year adjusted earnings per share finished at $1.12, exceeding the top end of the targets communicated at the beginning of the fiscal year [8] - Adjusted operating margin was 5%, with 7% in the Americas [9] - Fourth quarter revenue was $788 million, in the upper end of the estimated range provided in December [22] - Adjusted earnings of $0.26 per share included $0.11 related to favorable tax items [23] - Organic revenue declined by 5% year-over-year, with a 3% decline in the Americas and a 10% decline in International [24] Business Line Data and Key Metrics Changes - The Americas segment saw a 12% order growth in Q4, marking the sixth consecutive quarter of year-over-year order growth [9][28] - The International segment experienced a 1% growth in orders, driven by strong growth in India and Spain, offset by weakness in Germany and the UK [28] - The small and midsize business segment, particularly the AMQ brand, grew at a strong double-digit percentage in fiscal '25 [16] Market Data and Key Metrics Changes - US office leasing activity in Q4 increased by 24% versus Q3 and 23% year-over-year, marking the highest quarter of leasing activity in three years [10] - Average weekly order levels through the first three weeks in March were 7% higher than the Q4 weekly average [30] Company Strategy and Development Direction - The company aims to lead the transformation of the workplace, focusing on creating workspaces that adapt to changing employee needs [11] - The strategy includes expanding reach within markets, with year-over-year order growth across all customer segments in the Americas, except for the consumer business [14] - The company is developing a new ERP system to simplify processes and enhance capabilities, targeting a go-live in calendar year 2026 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fiscal '25 results and the progress made against the strategy, despite facing challenges from tariffs and global trade uncertainty [20][36] - The company anticipates organic revenue growth of 5% to 9% for the first quarter of fiscal '26, with adjusted earnings expected between $0.13 and $0.17 per share [31] - Management acknowledged the cyclical nature of the industry and the potential impact of macroeconomic uncertainty on demand patterns [82] Other Important Information - The company returned $84 million to shareholders and generated $100 million of free cash flow [18] - A tariff recovery charge was announced, which is tied to inflationary pressures and could be adjusted based on the evolving tariff landscape [89] Q&A Session Summary Question: Can you run through the commentary around the order pacing through the fourth quarter? - Management noted that orders followed normal seasonal patterns, with strong growth in February and expectations for continued strength due to the tariff recovery charge [41][42] Question: What actions are being taken to improve profitability in the International segment? - Management indicated that growth is expected in the International business, but cost structure adjustments are necessary due to past performance [44][45] Question: Can you clarify the variable compensation and tax items in the fourth quarter? - The tax items were driven by a regulation change and strategic tax planning, while variable compensation adjustments are tied to these tax changes [53][55] Question: What is the sentiment regarding buybacks in the current environment? - The company targeted buybacks to offset dilution and plans to continue this strategy in fiscal '26 [61] Question: How is the West Coast recovery impacting demand? - Management observed improvement in the West Coast, particularly in the tech sector, contributing positively to Q4 orders [68] Question: How much of the order strength was driven by new projects versus continuing activity? - Growth was noted across all categories, with the strongest growth in projects, followed by continuing business [74] Question: What is the outlook for the industry given the current macroeconomic uncertainty? - Management remains cautiously optimistic, noting that while uncertainty exists, the fundamentals for demand are still strong [82][84]

Financial Data and Key Metrics Changes - The full year adjusted earnings per share finished at $1.12, exceeding the top end of the targets communicated at the beginning of the fiscal year [8] - Adjusted operating margin was 5%, with 7% in the Americas [9] - Fourth quarter revenue was $788 million, in the upper end of the estimated range, benefiting from stronger-than-expected order growth in the Americas [22] - Organic revenue declined by 5% compared to the prior year, with a 3% decline in the Americas and a 10% decline in International [24] Business Line Data and Key Metrics Changes - The Americas segment saw a 12% growth in orders during Q4, marking the sixth consecutive quarter of year-over-year order growth [9][28] - The International segment experienced a 1% growth in orders, driven by strong growth in India and Spain, offset by weakness in Germany and the UK [28] - The small and midsize business segment, particularly the AMQ brand, grew at a strong double-digit percentage in fiscal '25 [16] Market Data and Key Metrics Changes - US office leasing activity in Q4 increased by 24% versus Q3 and 23% year-over-year, marking the highest quarter of leasing activity in three years [10] - The healthcare industry is poised for continued growth, driven by an aging US demographic requiring more healthcare services [15] Company Strategy and Development Direction - The company aims to lead the transformation of the workplace, focusing on creating workspaces that adapt to changing employee needs [11] - The strategy includes expanding reach within markets, with all customer segments in the Americas posting year-over-year order growth, except for the consumer business [14] - The company is developing a new ERP system to simplify processes and enhance capabilities, targeting a go-live in calendar year 2026 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made against the strategy despite a dynamic environment of evolving tariff and trade policies [20] - The company anticipates organic revenue growth of 4% to 6% for fiscal 2026, assuming a stable macro environment and continued positive sentiment from large corporate customers [32][36] - Management acknowledged the uncertainty in the macro environment but remains hopeful about demand due to the ongoing return to office trends [80][84] Other Important Information - The company generated $100 million of free cash flow and returned $84 million to shareholders [18] - A tariff recovery charge was announced, which is tied to tariffs and inflationary pressures, and could be adjusted based on the evolving tariff landscape [89] Q&A Session Summary Question: Can you run through the commentary around the order pacing through the fourth quarter? - Management noted that orders followed normal seasonal patterns, with strong growth in February and expectations for strong order levels due to the tariff recovery charge [41][42] Question: What actions are being taken to improve profitability in the International segment? - Management expects growth in the International business and is reviewing the cost structure to enhance profitability [44][45] Question: Can you clarify the variable compensation and tax items recorded in Q4? - The tax items were driven by a regulation change and strategic tax planning, while variable compensation adjustments are tied to these tax changes [53][55] Question: What is the sentiment regarding buybacks in the current environment? - The company targeted buybacks to offset dilution and plans to continue this strategy in fiscal 2026 [61] Question: How flexible is the tariff recovery charge? - The charge is a stated percentage of list price and may be adjusted based on the evolving tariff landscape [89][90] Question: What is the outlook for small and medium business growth? - While there was softness in Europe, the Americas segment showed order growth, and the company plans to continue investing in this area [94][96]

Investor Presentation FY2025 Fourth Quarter FY2023 Third Quarter Investment Thesis: After several years of significant disruption, we believe modernizing the workplace will become even more important as organizations seek greater productivity, collaboration and innovation. An industry leader in a changing workplace Efforts to expand revenue base Experienced management team and conservative capital policy Our Balance Sheet Provides Stability Through Business Cycles FY2025 Fourth Quarter $0 $500 $1,000 $1,500 ...