SCS — Steelcase Inc.

Steelcase Q2 Fiscal 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $897 million, a 5% increase year-over-year, marking the highest quarterly results in five years.
• Adjusted Earnings: $0.45 per share, exceeding expectations due to strong revenue and improved gross margins.
• Operating Margins: Adjusted operating margin of 8.4%, with the Americas segment at 11.0%, flat compared to the prior year.
• Order Growth: Overall orders increased by 6%, with an 8% rise in the Americas, driven by large corporate customers.
• International Segment: Revenue grew by 13%, with 8% organic growth, particularly strong in India, offset by declines in Germany and France.
• Cash Flow: Cash and short-term investments increased by $32 million, with total liquidity at $427 million and total debt at $447 million.

2. Strategic Updates and Business Highlights:

• Strong demand from large corporate customers, particularly in the financial services and technology sectors, is driving growth.
• The company is focused on transforming office spaces to support new work models as employees return to the office.
• Steelcase is pursuing a merger with HNI, expected to close by the end of calendar year 2025, which aims to expand market reach and enhance brand offerings.

3. Forward Guidance and Outlook:

• No forward-looking guidance provided due to the pending merger with HNI.
• The company remains optimistic about continued demand from large corporate clients and the potential benefits of the merger.

4. Bad News, Challenges, or Points of Concern:

• Declines in the education sector due to changes in federal funding policies are impacting overall growth.
• The International segment faced challenges in Germany and France, which are experiencing macroeconomic difficulties.
• Restructuring costs of $10 million were incurred in the International segment, primarily related to workforce reductions in EMEA.

5. Notable Q&A Insights:

• Order growth in the Americas was primarily volume-driven rather than from price increases, with pricing actions having a minor impact.
• The demand profile is characterized by a mix of companies rethinking existing spaces and moving to new locations.
• Profitability improvements in the International segment were attributed to cost reduction efforts, with Asia Pacific showing positive trends.
• The company is still catching up on cumulative pricing actions to fully offset inflation and tariff impacts, indicating ongoing volatility in the cost environment.

Overall, Steelcase reported strong financial results in Q2 2026, driven by robust demand from large corporate customers, while navigating challenges in certain international markets and sectors. The upcoming merger with HNI is anticipated to enhance future growth prospects.