Steelcase (SCS) Announces First Quarter Fiscal 2026 Earnings Results

Steelcase Inc. (SCS) today announced its financial results for the most recent quarter, revealing a revenue of $779 million, which surpassed analysts’ expectations by $16.7 million. However, the company reported diluted earnings per share of $0.11, falling short of the estimated $0.135. Despite the earnings miss, Steelcase’s revenue growth highlights its resilience in a competitive market.

Key Highlights

• Revenue grew 7% year-over-year, reaching $779.0 million.
• Gross margin improved to 33.9%, an increase of 170 basis points compared to the prior year.
• Operating income increased by 45% compared to the prior year.
• Strong order growth from large corporate customers, though declines were noted in government and education sectors.
• The company expects second quarter fiscal 2026 revenue to be between $860 to $890 million, indicating flat to 4% growth year-over-year.

Summary

Steelcase Inc. reported a strong start to its fiscal 2026, with a 7% increase in revenue compared to the previous year, driven primarily by a 9% growth in the Americas. The company noted that this growth was supported by a higher backlog and strong demand from large corporate clients, while international markets faced challenges, particularly in Germany and France. CEO Sara Armbruster commented, “Our first quarter results were a great start to the year… organizations are turning to Steelcase to create spaces that support connection, creativity, and performance.”

Looking ahead, Steelcase anticipates second quarter revenue to range from $860 to $890 million, which translates to flat to 4% growth year-over-year. The company is also implementing restructuring actions aimed at reducing costs and prioritizing investments in strategic initiatives. CFO Dave Sylvester highlighted these efforts, stating, “Our fiscal 2026 targets… reflected the expected benefits of these actions.” Overall, Steelcase remains confident in its strategy and the performance of its core business segments.

Steelcase Inc. (SCS) has recently experienced a notable uptick in its stock price, with a 6.39% increase over the past week and a 7.33% rise in the last month, signaling a potential turnaround for the company. However, this positive momentum comes on the heels of a challenging year, where the stock has declined by 18.30%. Despite these fluctuations, Steelcase’s fundamental metrics present a mixed picture; the company boasts a robust price-to-earnings ratio of 10.64, suggesting it may be undervalued relative to its earnings potential. The impressive two-year compound annual growth rate (CAGR) of 67.50% in earnings per share indicates strong profitability growth, while the free cash flow CAGR of 82.94% further underscores its financial health. Conversely, the revenue CAGR of -1.04% raises concerns about top-line growth, which could hinder long-term sustainability. With a return on invested capital of 11.17% and a net profit margin of 3.69%, Steelcase appears to be managing its resources effectively, but the company must address its revenue challenges to maintain investor confidence. As the market reacts to these dynamics, all eyes will be on Steelcase to see if it can leverage its strong cash flow and earnings growth to reverse its revenue decline.

Steelcase Inc. provides a portfolio of furniture and architectural products in the United States and internationally. It operates through Americas, EMEA, and Other segments. The company’s furniture portfolio includes furniture systems, seating, storage, fixed and height-adjustable desks, benches, and tables, as well as complementary products, such as work accessories, lighting, and mobile power and screens. Its seating products comprise task chairs; seating for collaborative environments and casual settings; and specialty seating for specific vertical markets, including education and healthcare. The company’s interior architectural products comprise full and partial height walls and architectural pods. It also provides textiles, wall coverings, and surface imaging solutions for architects and designers; and workplace strategy consulting, lease origination, and furniture and asset management services. The company markets and sells its products to corporate, government, healthcare, education, and retail customers under the Steelcase, Designtex, Coalesse, AMQ, Smith System, Orangebox, and Viccarbe brands. It distributes its products and services through a network of independent and company-owned dealers, as well as directly to end-use customers. The company was founded in 1912 and is headquartered in Grand Rapids, Michigan.