Steelcase Inc, a leading furniture company based in the United States, reported its first quarter fiscal 2025 earnings, revealing a mixed performance. The company, known for its brands such as Steelcase, AMQ, Coalesse, and Designtex, offers a wide range of furniture and architectural products and services aimed at enhancing workplace environments.
Performance Overview
For the first quarter of fiscal 2025, Steelcase Inc reported revenue of $727.3 million, a 3% decline compared to the $751.9 million reported in the same period last year. This figure fell short of the analyst estimate of $729.13 million. However, the company achieved a net income of $10.9 million, or $0.09 per share, aligning with the analyst estimate of $0.09 per share. Adjusted earnings per share were reported at $0.16, a significant improvement from the $0.09 reported in the prior year.
Segment Performance and Challenges
The revenue decline was consistent across both the Americas and International segments, each experiencing a 3% drop. On an organic basis, revenue decreased by 1% in the Americas and 2% in International. The Americas segment faced challenges due to a lower beginning backlog, which was impacted by previous supply chain disruptions and extended delivery timeframes. However, the segment saw a 10% growth in orders, driven by large corporate customers and the education sector.
Internationally, the segment experienced a 2% growth in orders, with a 4% increase in EMEA markets offset by a 3% decline in Asia Pacific. The growth in EMEA was broad-based, except for a decline in Germany, while the Asia Pacific region saw declines in most markets, partially offset by strong growth in India.
Financial Achievements
Steelcase Inc reported an operating income of $17.6 million, a notable increase of $10.3 million compared to the prior year. Adjusted operating income was $28.2 million, up by $8.5 million. This improvement was primarily driven by better gross margins, despite the lower volume. The company also recorded $6.3 million in restructuring costs, aimed at cost improvement initiatives and operational effectiveness.
“We are pleased with our first quarter results, which reflected higher than expected adjusted earnings improvement and 10% order growth in the Americas,” said Sara Armbruster, president and CEO.
Key Financial Metrics
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Revenue | $727.3 million | $751.9 million | (3)% |
| Net Income | $10.9 million | $1.5 million | 626.7% |
| Adjusted EPS | $0.16 | $0.09 | 77.8% |
| Operating Income | $17.6 million | $7.3 million | 141.1% |
Analysis and Outlook
Steelcase Inc's performance in the first quarter of fiscal 2025 highlights both achievements and challenges. The company's ability to improve its operating income and adjusted earnings per share, despite a decline in revenue, underscores its effective cost management and operational efficiency. The growth in orders, particularly in the Americas, indicates strong demand from large corporate customers and the education sector.
Looking ahead, Steelcase Inc has projected second quarter fiscal 2025 revenue to be in the range of $850 to $875 million, with expected earnings per share between $0.33 to $0.37. The company remains optimistic about achieving its full-year financial targets, assuming stable macroeconomic and geopolitical conditions.
“With the strength of our first quarter results and second quarter outlook, we have increased confidence of achieving our targets and potentially reaching the higher end of the range for our income targets,” said Dave Sylvester, senior vice president and CFO.
Overall, Steelcase Inc's first quarter results reflect a resilient performance amidst challenging market conditions, positioning the company for potential growth in the upcoming quarters.
Explore the complete 8-K earnings release (here) from Steelcase Inc for further details.
