Steelcase (SCS) Announces Second Quarter Fiscal 2026 Earnings Results

Steelcase Inc. (SCS) today announced its financial results for the most recent quarter, revealing a mixed performance. The company reported quarterly revenue of $897.1 million, surpassing analysts’ expectations by $23.5 million, while diluted earnings per share came in at $0.29, missing estimates by $0.075. Despite the earnings miss, Steelcase’s revenue growth highlights its resilience in a challenging market environment.

Key Highlights:

• Revenue grew 5% year-over-year, reaching $897.1 million.
• Strong growth driven by large corporate customers in the Americas and the India market in International.
• Orders increased by 6% compared to the prior year.
• Gross margin remained stable at 34.4% despite higher costs.
• The company is in the process of being acquired by HNI Corporation for approximately $2.2 billion.

In the second quarter of fiscal 2026, Steelcase Inc. reported a revenue increase of 5% compared to the previous year, totaling $897.1 million. This growth was primarily fueled by strong demand from large corporate clients in the Americas and significant contributions from the Indian market in the International segment. Orders also saw a 6% increase, indicating a positive trend in customer demand. CEO Sara Armbruster noted, “Our second quarter revenue and order growth was led by continued strengthening of demand from our large corporate customers,” highlighting the company’s focus on providing research-driven solutions that enhance workplace connectivity and performance.

Despite the revenue growth, Steelcase faced challenges with operating income, which decreased to $53.1 million due to restructuring costs and expenses related to the pending merger with HNI Corporation. The gross margin remained relatively flat at 34.4%, attributed to higher tariffs and restructuring costs, but was offset by pricing benefits and cost reduction initiatives. CFO Dave Sylvester mentioned that the company is taking additional steps to improve profitability, particularly in the International segment, which has shown growth in markets like India and China. The anticipated merger with HNI is expected to close by the end of 2025, pending shareholder and regulatory approvals.

Steelcase Inc. (SCS) has experienced a notable surge in its stock price over the past six months, climbing an impressive 62.56%, which reflects a growing investor confidence in the company despite some underlying challenges. The stock’s price-to-earnings ratio stands at 16.11, suggesting that investors are willing to pay a premium for its earnings potential, especially given the remarkable 58.5% compound annual growth rate (CAGR) in earnings per share over the past two years. However, the company has faced headwinds, as evidenced by a negative revenue CAGR of -0.40% and a staggering decline in free cash flow, which dropped by nearly 58%. This juxtaposition of strong earnings growth against declining revenues raises questions about the sustainability of Steelcase’s performance. Additionally, the net profit margin of 3.76% and a return on invested capital of 11.08% indicate that while the company is generating profits, there is room for improvement in operational efficiency. Over the past month, the stock has shown a modest increase of 2.24%, suggesting a potential stabilization after the significant gains seen in the previous three months. As investors weigh these mixed signals, Steelcase’s future trajectory will depend on its ability to reverse the trends in revenue and cash flow while maintaining its earnings momentum.

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.