Steelcase Inc. (NYSE: SCS) Q2 2026 Earnings Call | 09/25/2025

Financial Highlights

• Revenue: $897 million, up 5% year-over-year, exceeding expectations.

  • Americas: 3% organic growth, driven by large corporate customers, offset by declines in education.

  • International: 13% revenue growth (8% organic), led by strong performance in India, China, and the UK, offset by declines in Germany and France.

• Adjusted Earnings: 45 cents per share, above estimates, driven by higher revenue and favorable gross margins.

• Operating Margin:

  • Americas: 11%, flat year-over-year.

  • International: Improved by $5 million, driven by cost reductions.

  • Overall: 8.4%, up 40 basis points from the prior year.

• Orders: Grew 6% year-over-year.

  • Americas: 8% growth, driven by financial services and technology sectors, partially offset by education declines.

  • International: 1% decline, with growth in India and Japan offset by weakness in Germany and France.

• Cash Flow and Balance Sheet:

  • Cash and short-term investments increased by $32 million from Q1.

  • Adjusted EBITDA: $100 million in Q2; trailing four-quarter adjusted EBITDA: $278 million (8.5% of revenue).

  • Total liquidity: $427 million; total debt: $447 million.

Strategic Updates

• Market Trends: Strong demand from large corporate customers, particularly in financial services and technology, as companies invest in office spaces to support return-to-office initiatives and new ways of working (e.g., collaboration, creativity, privacy).

• International Segment: Cost reduction efforts over the past two years contributed to profitability improvements, despite macroeconomic challenges in Germany and France.

• Pending Merger with H&I:

  • Expected to close by the end of calendar year 2025.

  • Aims to expand market reach and combine industry-leading brands.

  • No questions taken on the merger during the call; refer to public filings for details.

Analyst Questions

• Joe Gomes (Noble Capital Markets):

  • Asked about volume vs. price contribution to outperformance: Dave Sylvester noted order growth in the Americas was primarily volume-driven, with pricing contributing ~2%.

  • Inquired about future price increases: Sylvester indicated pricing actions have offset year-over-year inflation and tariffs but did not comment on future plans.

  • Asked about end-market favorability: Sylvester noted markets are more favorable than anticipated, with strong corporate demand offsetting education declines.

• Stephen Ramsey (TRG):

  • Asked about demand patterns in the Americas: Armbruster noted a mix of return-to-office, new space, and renovation projects, with customers focusing on strategic outcomes (e.g., collaboration, creativity).

  • Clarified that project orders grew faster than continuing business.

  • Asked about international profitability: Sylvester noted improvements in both Asia-Pacific and EMEA, with Asia-Pacific showing demand recovery (e.g., China) and EMEA benefiting from cost reductions.

• Ruben Gardner (Benchmark):

  • Asked about pricing and tariffs: Sylvester clarified that Q2 pricing offset year-over-year inflation and tariffs, but cumulative recovery will take a few more quarters.

  • Inquired about order cadence: Sylvester noted steady demand throughout Q2, with the first three weeks of Q3 flat year-over-year.

  • Asked about office design trends: Armbruster highlighted increased focus on spaces supporting strategic goals (e.g., privacy, collaboration, technology integration) compared to pre-COVID norms.