Steelcase Reports First Quarter Fiscal 2026 Results
Revenue grew 7% compared to prior year, driven by 9% broad-based growth in the Americas
Gross margin of 33.9% represented an improvement of 170 basis points compared to prior year
Operating income increased 45% compared to prior year
Order growth from large corporate customers continued, offset by declines from government and education customers
GRAND RAPIDS, Mich., June 25, 2025 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE:SCS) today reported first quarter revenue of $779.0 million, net income of $13.6 million, or $0.11 per share, and adjusted earnings per share of $0.20. In the prior year, Steelcase reported revenue of $727.3 million, net income of $10.9 million, or $0.09 per share, and adjusted earnings per share of $0.16.
Revenue and order growth (decline) compared to the prior year were as follows:
Q1 2026 vs. Q1 2025
Revenue Growth
Organic Revenue Growth (Decline)
Organic Order Growth (Decline)
Americas
9
%
9
%
(1
)%
International
1
%
(1
)%
1
%
Steelcase Inc.
7
%
7
%
(1
)%
Revenue grew 7 percent in the first quarter compared to the prior year and grew 7 percent on an organic basis, including 9 percent organic growth in the Americas and a 1 percent organic decline in International. The Americas growth was driven by a higher beginning backlog compared to the prior year and included strong growth from large corporate, government and healthcare customers. The International decline was driven by Germany and France, mostly offset by growth in India, the UK and China.
Orders (adjusted for currency translation effects) declined modestly in the first quarter compared to the prior year and included a 1 percent decline in the Americas and 1 percent growth in International. The Americas reflected growth from large corporate customers offset by declines from government and education customers. In the prior year, the Americas posted 10 percent growth compared to the first quarter of fiscal 2024. In International, strong growth in India, China and Central Europe was mostly offset by declines in Germany and France.
"Our first quarter results were a great start to the year," said Sara Armbruster, president and CEO. "We delivered strong revenue growth, led by our large corporate customers who are investing to reimagine their workplaces. As organizations bring people together in new ways, they are turning to Steelcase to create spaces that support connection, creativity and performance. While external factors are impacting a few parts of our business, the majority of our businesses and geographies are performing well. We remain confident in our strategy and focused on delivering value to our customers."
Operating income (loss) and adjusted operating income (loss) were as follows:
Operating income (loss)
Adjusted operating income (loss)
(Unaudited)
(Unaudited)
Three months ended
Three months ended
May 30,2025
May 24,2024
May 30,2025
May 24,2024
Americas
$
28.0
$
18.5
$
40.2
$
25.9
International
(2.5
)
(0.9
)
(1.2
)
2.3
$
25.5
$
17.6
$
39.0
$
28.2
Operating income of $25.5 million in the first quarter represented an increase of $7.9 million compared to the prior year. Adjusted operating income of $39.0 million in the first quarter represented an increase of $10.8 million compared to the prior year, including an improvement of $14.3 million in the Americas, primarily driven by higher revenue, and a $3.5 million decline in International, primarily driven by a lower mix of small-to-medium sized business in Germany and France.
"During the first quarter, we initiated restructuring actions in the Americas (including salaried headcount reductions and the elimination of open job requisitions targeting approximately $20 million of annualized spending). Our fiscal 2026 targets that we shared in March reflected the expected benefits of these actions, which were taken to prioritize investments in our strategic initiatives and growth areas," said Dave Sylvester, senior vice president and CFO. "In addition, we have initiated procedures with applicable unions and works councils in Europe as part of actions which are targeted to further reduce our cost structure in response to weak macroeconomic factors and lower demand in Germany and France. These actions are in support of our broader goal to improve profitability in our International segment."
Gross margin of 33.9 percent in the first quarter represented an improvement of 170 basis points compared to the prior year, driven by higher volume in the Americas, $6 million of lower restructuring costs, and benefits from cost reduction initiatives, partially offset by approximately $7 million of higher tariff costs, net of pricing benefits, in the Americas.
Operating expenses of $230.1 million in the first quarter represented an increase of $12.6 million compared to the prior year. The increase was driven by approximately $7.2 million of higher employee costs, $5.1 million of higher variable compensation expense and approximately $2 million of unfavorable currency translation effects.
Other expense, net of $3.3 million in the first quarter represented a decrease of $3.6 million compared to other income, net in the prior year, primarily due to foreign exchange losses.
Total liquidity, which is comprised of cash and cash equivalents, short-term investments and the cash surrender value of company-owned life insurance, aggregated to $391.5 million at the end of the first quarter and represented an increase of $13.7 million compared to the prior year. Total debt was $447.3 million. Trailing four quarter adjusted EBITDA was $265.8 million, or 8.3 percent of revenue.
The Board of Directors has declared a quarterly cash dividend of $0.10 per share, to be paid on or before July 21, 2025, to shareholders of record as of July 7, 2025.
Outlook
At the end of the first quarter, the company's backlog was approximately $801 million, which was 2 percent higher than the prior year. The company expects second quarter fiscal 2026 revenue to be in the range of $860 to $890 million. The company reported revenue of $855.8 million in the second quarter of fiscal 2025. The projected revenue range translates to approximately flat to growth of 4 percent, compared to the prior year, or approximately flat to growth of 3 percent on an organic basis. The company expects to report earnings per share of between $0.27 to $0.31 for the second quarter of fiscal 2026, which includes the impact of amortization of purchased intangible assets and projected restructuring costs, and adjusted earnings per share of between $0.36 to $0.40. The company reported earnings per share of $0.53 and adjusted earnings per share of $0.39 in the second quarter of fiscal 2025.
The second quarter estimates include:
gross margin of approximately 33.0 to 33.5 percent, which includes an assumption that higher tariff costs and inflation of approximately $20 million will be offset by higher pricing benefits in the Americas as compared to the prior year,
projected operating expenses of between $230 to $235 million,
projected interest expense, net of investment income and other income, net, of approximately $3 million, and
a projected effective tax rate of approximately 27 percent.
"I am proud of our teams around the world for their strong execution and continuing the momentum we built in fiscal 2025," said Armbruster. "Our customer conversations remain very active, including at the recent Design Days and Neocon events in Chicago, where many arrived prepared to move forward with final design decisions for their projects. These interactions reinforce the trust our customers place in us and the relevance of our solutions in a changing world of work."
Business Segment Results
(in millions)
(Unaudited)
Three Months Ended
May 30,2025
May 24,2024
% Change
Revenue
Americas (1)
$
603.6
$
554.4
9
%
International (2)
175.4
172.9
1
%
$
779.0
$
727.3
7
%
Revenue mix
Americas
77.5
%
76.2
%
International
22.5
%
23.8
%
Operating income (loss)
Americas
$
28.0
$
18.5
International
(2.5
)
(0.9
)
$
25.5
$
17.6
Operating margin
3.3
%
2.4
%
Business Segment Footnotes
The Americas segment serves customers in the U.S., Canada, the Caribbean Islands and Latin America with a comprehensive portfolio of furniture, interior architectural, textile and surface imaging products that are marketed to corporate, government, education, healthcare and retail customers primarily through the Steelcase, AMQ, Coalesse, Designtex, HALCON, Orangebox, Smith System and Viccarbe brands.
The International segment serves customers in EMEA and Asia Pacific with a comprehensive portfolio of furniture and interior architectural products that are marketed to corporate, government, education, healthcare and retail customers primarily through the Steelcase, Coalesse, Orangebox, Smith System and Viccarbe brands.
QUARTER OVER QUARTER ORGANIC REVENUE GROWTH (DECLINE) BY SEGMENT
Q1 2026 vs. Q1 2025
(Unaudited)
Steelcase Inc.
Americas
International
Q1 2025 revenue
$
727.3
$
554.4
$
172.9
Currency translation effects
2.5
(0.9
)
3.4
Q1 2025 revenue, adjusted
$
729.8
$
553.5
$
176.3
Q1 2026 revenue
$
779.0
$
603.6
$
175.4
Organic growth (decline) $
$
49.2
$
50.1
$
(0.9
)
Organic growth (decline) %
7
%
9
%
(1
)%
ADJUSTED EARNINGS PER SHARE
(Unaudited)
(Unaudited)
Three Months Ended
May 30,2025
May 24,2024
Earnings per share - diluted
$
0.11
$
0.09
Amortization of purchased intangible assets, per share
0.04
0.04
Income tax effect of amortization of purchased intangible assets, per share
(0.01
)
(0.01
)
Restructuring costs, per share
0.08
0.05
Income tax effect of restructuring costs, per share
(0.02
)
(0.01
)
Adjusted earnings per share - diluted
$
0.20
$
0.16
ADJUSTED EBITDA
(Unaudited)
Three Months Ended
Trailing FourQuarters Ended
August 23,2024
November 22,2024
February 28,2025
May 30,2025
May 30,2025
Net income
$
63.1
$
19.1
$
27.6
$
13.6
$
123.4
Income tax expense (benefit)
22.8
7.0
(19.5
)
5.2
15.5
Interest expense
6.4
6.3
6.8
6.3
25.8
Depreciation and amortization
20.0
20.0
20.6
17.6
78.2
Share-based compensation
2.9
1.5
4.6
12.9
21.9
Restructuring costs
2.2
2.0
0.3
9.2
13.7
Gains on the sale of land, net of variable compensation impacts
(27.9
)
—
—
—
(27.9
)
Loss on pension plan settlement
—
15.2
—
—
15.2
Adjusted EBITDA
$
89.5
$
71.1
$
40.4
$
64.8
$
265.8
