Financial Data and Key Metrics Changes - Non-GAAP earnings per share increased by 7% year over year, reaching $1.10, driven by a record third quarter non-GAAP operating margin of 10.8% [3][5] - Total net sales in the third quarter increased by 3% organically compared to the same period last year [5] - Non-GAAP operating margin expanded by 10 basis points year over year, marking the highest EBIT margin for the third quarter [5] Business Line Data and Key Metrics Changes - In the workplace furnishings segment, organic net sales increased by 3% year over year, with a non-GAAP segment operating profit margin exceeding 12% [5][6] - Residential building products revenue remained roughly unchanged year over year, with new construction revenue down slightly and remodel retrofit sales growing modestly [6][7] - Orders in the residential building products segment increased by 2% year over year, with remodel retrofit orders up mid-single digits [9] Market Data and Key Metrics Changes - Builder sentiment has weakened recently, reflecting elevated interest rates and weaker consumer confidence, impacting housing trends [9][10] - The office space market is showing signs of recovery, with net absorption of office space expected to be the highest since 2019, indicating improved demand for office furniture [12][13] Company Strategy and Development Direction - The company remains focused on margin expansion efforts and continued revenue growth while investing for future growth [8][10] - The pending acquisition of Steelcase is expected to create synergies of $120 million and accretion of $1.20 per share when fully mature, enhancing the company's strategic position [19][20] - The company is optimistic about long-term market fundamentals in residential building products, despite a challenging new construction environment [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit non-GAAP EPS growth for the fourth consecutive year, despite ongoing macroeconomic uncertainties [18] - The company anticipates strong results driven by margin expansion and continued volume growth, with a positive outlook for both workplace furnishings and residential building products [8][16] - Management highlighted the importance of maintaining financial discipline while pursuing revenue growth amid macro-related risks [18] Other Important Information - The company expects fourth quarter revenue in workplace furnishings to increase at a high single-digit rate year over year, with residential building products also projected to grow at a high single-digit rate [16][17] - The anticipated strong free cash flow will aid in quickly deleveraging the balance sheet post-acquisition [19] Q&A Session Summary Question: Is the $1.20 of accretion from Steelcase considering just the synergies outlined? - Yes, the $1.20 in accretion is based on the $120 million in synergies previously discussed [22] Question: Where are you in terms of the $0.75 to $0.80 from KI and Mexico? - The company expects to recognize $45 to $50 million between 2025 and 2026, with more expected in 2025 than 2026 [25] Question: Can you compare your full-year guidance now versus a few months ago? - Revenue expectations remain in line with prior expectations, but there is some pressure on product mix and timing of investments [32] Question: How much runway do you have to outperform the market in residential building products? - The company believes it can outperform the market due to ongoing investments and strong performance in specific product lines [34] Question: What risks are associated with integrating Steelcase? - The company plans to maintain dealer partnerships and brand distribution intact, which should allow it to participate in any demand upswing [38]

Group 1: Company Performance - Middle Coast Investing's collective portfolio outperformed the S&P 500 in Q3 2025, with a return of 9.6% compared to 7.8% for the S&P 500 [1] - The Core U.S. portfolios returned 10%, while the Russell 2000 returned 12%, the S&P 600 returned 8.7%, and the Nasdaq generated 11.2% during the same period [1] - European Portfolios appreciated by 5.5% in Q3 2025 [1] Group 2: Steelcase Inc. Overview - Steelcase Inc. (NYSE:SCS) had a one-month return of 0.59% and a 52-week gain of 32.86%, closing at $16.98 per share on October 6, 2025, with a market capitalization of $1.948 billion [2] - Steelcase Inc. is a major position for Middle Coast Investing, which noted that the company agreed to merge with HNI Corp [3] Group 3: Merger Details - The merger between Steelcase Inc. and HNI Corp was unexpected, with Steelcase not actively seeking buyers, indicating potential for a better deal [3] - Shareholders of Steelcase will own 36% of the combined company post-merger, and Middle Coast Investing plans to retain its shares while accepting the $7.2 per share cash offer from HNI [3] Group 4: Hedge Fund Interest - Steelcase Inc. is not among the 30 most popular stocks among hedge funds, with 20 hedge fund portfolios holding the stock at the end of Q2 2025, down from 25 in the previous quarter [4] - While Steelcase is recognized for its investment potential, the company believes certain AI stocks present greater upside potential and lower downside risk [4]

Earnings Report - Steelcase Inc. is set to release its second-quarter earnings results on September 24, with analysts expecting earnings of 37 cents per share, a decrease from 39 cents per share in the same period last year [1] - The company projects quarterly revenue of $873.6 million, up from $855.8 million a year earlier [1] Acquisition News - HNI announced plans to acquire Steelcase for approximately $2.2 billion on August 4 [1] Dividend Information - Steelcase currently offers an annual dividend yield of 2.37%, translating to a semi-annual dividend of 10 cents per share, or 40 cents annually [2] - To earn $500 monthly from dividends, an investment of approximately $253,500 or around 15,000 shares is required, while a more modest $100 monthly would need about $50,700 or 3,000 shares [2] Dividend Yield Calculation - The dividend yield is calculated by dividing the annual dividend payment by the stock's current price, with examples illustrating how changes in stock price affect yield [3] - Changes in dividend payments also impact yield; an increase in dividends raises yield if the stock price remains constant, while a decrease lowers it [4] Stock Performance - Steelcase shares gained 0.1% to close at $16.90 on Monday [4]

Core Insights - The article highlights a significant shift in kitchen design trends, moving away from the all-white kitchen to more personalized and layered aesthetics, with a focus on individuality and rich color stories [1][2][3] Design Trends - The report indicates that soft modern, transitional, and modern traditional styles are the top three kitchen styles, with transitional design declining in popularity as homeowners prefer more distinct styles [2][3] - Coastal design has surged into the top five styles, while farmhouse design has decreased by 14% this year, often blended with other aesthetics [3] - Homeowners are increasingly favoring light-toned stains, off-whites, and beiges over white finishes, which have dropped to third place in preferences for the first time in nearly a decade [4] Color Preferences - Greens, particularly muted and sage tones, have overtaken gray in popularity, with the 2026 Impactful Finish of the Year, Lush Forest, being a deep green that offers versatility and richness [5] - Earthy tones like terracotta are emerging, indicating a broader trend towards nature-inspired palettes [6] Kitchen Layouts - There is a growing interest in creative kitchen storage solutions, such as freestanding pantry furniture and multifunctional butler's pantries, reflecting a desire for efficiency and uncluttered spaces [7][8] - Homeowners are sacrificing traditional storage areas to create dedicated pantry spaces, showcasing a shift towards thoughtful use of square footage [8] Evolving Definitions - The term "modern" has evolved to include clean, minimal aesthetics that are layered with character and warmth, making modern styles more accessible to a wider range of homeowners [9] - Cabinet door preferences are shifting, with Shaker doors remaining popular while flat panels and subtle raised details are on the rise, allowing for personal expression [9]

Financial Performance & Targets - Steelcase's mid-term financial targets include average annual organic revenue growth of 4-6%[6] - The company targets an adjusted operating income margin of 6-7% in the mid-term[6] - Steelcase aims for a free cash flow of approximately 5% of revenue in the mid-term[6] - In FY25, Steelcase's revenue reached $32 billion[17] with an adjusted EBITDA of $262 million[17] - Steelcase's net debt to adjusted EBITDA ratio was -04x at the end of FY25[17] Market Position & Strategy - Steelcase is a leading global office furniture market manufacturer with a research-based approach to innovation[14, 15] - The company's strategy focuses on leading the transformation of the workplace, expanding reach within markets, and strengthening profitability[38] - Steelcase is targeting $50 million+ in operational cost reductions from FY23[4, 49] Regional Performance - In FY25, the Americas segment accounted for 78% of Steelcase's revenue[19] - The international segment accounted for 22% of Steelcase's FY25 revenue[19]