Group 1: Earnings Performance - Steelcase reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, and up from $0.16 per share a year ago, representing an earnings surprise of +66.67% [1] - The company posted revenues of $779 million for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 3.05%, compared to year-ago revenues of $727.3 million [2] - Over the last four quarters, Steelcase has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Steelcase shares have declined approximately 8.4% since the beginning of the year, while the S&P 500 has gained 3.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.40 on revenues of $879.9 million, and for the current fiscal year, it is $1.04 on revenues of $3.25 billion [7] Group 3: Industry Context - The Business - Office Products industry, to which Steelcase belongs, is currently in the top 5% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Steelcase's stock performance [5][6]

Revenue and Income - Steelcase reported first quarter revenue of $779.0 million, a 7% increase from $727.3 million in the prior year, with organic revenue growth of 7%[2][18] - Net income for the first quarter was $13.6 million, or $0.11 per share, compared to $10.9 million, or $0.09 per share, in the prior year[2][19] - Revenue for the three months ended May 30, 2025, was $779.0 million, a 7.1% increase from $727.3 million for the same period in 2024[24] - Net income for the three months ended May 30, 2025, was $13.6 million, compared to $10.9 million in the same period last year, reflecting a net income margin increase from 1.5% to 1.7%[24] Segment Performance - The Americas segment achieved 9% organic revenue growth, while the International segment experienced a 1% organic decline[2][18] - Operating income for the Americas segment was $28.0 million, a significant increase from $18.5 million in the prior year, with an operating margin of 4.6%[25] - International segment reported a revenue of $175.4 million, with an operating loss of $2.5 million, compared to an operating loss of $0.9 million in the previous year[26] Operating Performance - Operating income increased by 45% to $25.5 million, with adjusted operating income rising to $39.0 million, an increase of $10.8 million compared to the prior year[6][19] - Adjusted operating income for Q1 2025 was $39.0 million, representing 5.0% of revenue, up from $28.2 million or 3.9% of revenue in Q1 2024[24] - Gross margin improved by 170 basis points to 33.9%, driven by higher volume and cost reduction initiatives[7][8] - Gross profit margin improved to 33.9% in Q1 2025 from 32.2% in Q1 2024, with gross profit of $263.8 million compared to $234.4 million[24] Future Outlook - The company expects second quarter fiscal 2026 revenue to be between $860 million and $890 million, translating to flat to 4% growth compared to the prior year[12][22] - Projected adjusted earnings per share for the three months ending August 29, 2025, is estimated to be between $0.36 and $0.40, compared to $0.39 in the same period last year[23] Financial Position - Total liquidity at the end of the first quarter was $391.5 million, an increase of $13.7 million from the prior year, while total debt stood at $447.3 million[10] - Total current assets decreased from $1,029.0 million to $938.7 million, a decline of approximately 8.8%[42] - Cash and cash equivalents decreased from $346.3 million to $183.9 million, a reduction of 47.0%[42] - Total liabilities decreased from $1,378.7 million to $1,272.7 million, a decrease of approximately 7.7%[43] - Total shareholders' equity increased from $951.7 million to $982.7 million, an increase of 3.2%[43] Cash Flow and Expenditures - Net cash used in operating activities was $(141.1) million, compared to $(59.1) million in the prior year, indicating a significant increase in cash outflow[46] - Capital expenditures for the period were $14.0 million, compared to $12.1 million in the previous year, reflecting a 15.7% increase[46] - Dividends paid were $12.2 million, slightly down from $12.3 million year-over-year[46] - The company reported a net decrease in cash and cash equivalents of $163.3 million for the period[46] Restructuring and Efficiency - The company initiated restructuring actions in the Americas targeting approximately $20 million of annualized spending to prioritize investments in strategic initiatives[7] - Restructuring costs decreased to $1.0 million in Q1 2025 from $7.0 million in Q1 2024, indicating improved operational efficiency[24] Conference Call and Financial Measures - The company plans to discuss first quarter results and business outlook in a conference call scheduled for 8:30 a.m. Eastern time[27] - Steelcase utilizes non-GAAP financial measures such as adjusted operating income and organic revenue growth to provide a clearer picture of financial performance[28]

Core Insights - Steelcase Inc. reported first quarter revenue of $779.0 million, a 7% increase from $727.3 million in the prior year, with net income rising to $13.6 million from $10.9 million [1][23][38] - The company experienced organic revenue growth of 7%, driven by a 9% increase in the Americas, while international revenue saw a 1% decline [1][16] - The backlog at the end of the first quarter was approximately $801 million, a 2% increase compared to the previous year [11] Financial Performance - Adjusted earnings per share for the first quarter were $0.20, up from $0.16 in the prior year [18] - Operating income increased by 45% to $25.5 million, with adjusted operating income rising to $39.0 million, an increase of $10.8 million [3][4][23] - Gross margin improved to 33.9%, reflecting a 170 basis point increase from the previous year [4][6] Revenue Breakdown - Revenue from the Americas segment was $603.6 million, a 9% increase, while international revenue was $175.4 million, a 1% increase [14][25] - The Americas accounted for 77.5% of total revenue, while international revenue made up 22.5% [14] Orders and Market Dynamics - Orders adjusted for currency translation effects declined modestly, with a 1% decrease in the Americas and a 1% increase in international orders [2] - The decline in the Americas was attributed to decreases from government and education customers, despite growth from large corporate clients [2][3] Strategic Initiatives - The company initiated restructuring actions in the Americas aimed at reducing annualized spending by approximately $20 million [6] - Steelcase is focusing on investments in strategic initiatives and growth areas, particularly in response to weak demand in Germany and France [6] Outlook - For the second quarter of fiscal 2026, Steelcase expects revenue in the range of $860 to $890 million, translating to flat to 4% growth compared to the prior year [11][20] - Projected adjusted earnings per share for the second quarter are estimated to be between $0.36 to $0.40 [22]

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 ...