Steelcase Inc. Q1 FY 2025 Financial Report

Date: June 24, 2024

Overview

Steelcase Inc. (NYSE: SCS), a leader in the business equipment and supplies industry, has reported its financial results for the first quarter of fiscal year 2025. Despite some challenges, the company has shown strong financial performance, underscoring the effectiveness of its strategic initiatives.

Key Financial Metrics

The first quarter of fiscal 2025 saw several positive developments in Steelcase's financials:

• Revenue: $727.3M
• Cost of Revenue: $485.9M
• Gross Profit: $241.4M
• Operating Income: $23.9M
• Net Income: $10.6M
• Earnings Per Share (EPS): $0.09

Revenue and Profitability

For Q1 FY 2025, Steelcase reported revenue of $727.3M, a slight decline compared to the previous year. Despite this, the company achieved a gross profit of $241.4M, reflecting a gross profit margin of 33.19%. This was driven by ongoing profit improvement initiatives and operational efficiency.

The operating income stood at $23.9M, with an operating income ratio of 3.29%. The net income for the quarter was $10.6M, resulting in a net income ratio of 1.46%. This demonstrates a strong trajectory for profitability improvement, supported by strategic initiatives and efficient cost management.

Cash Flow

Operating cash flow was reported at a deficit of $59.1M, and the net change in cash was -$145.4M, bringing the ending cash balance to $173.2M. The negative cash flow resulted from seasonal payments related to fiscal 2024's variable compensation and retirement plan contributions.

Investing activities included a capital expenditure of $12.1M and net purchases of investments amounting to $36.2M, which were offset by $0.5M from sales and maturities of investments.

In financing activities, Steelcase repurchased 1.5M shares at an average price of $12.48 per share, totaling $19M. Dividends paid during the quarter amounted to $12.3M.

Segment Performance

The Americas segment had another solid quarter driven by gross margin improvement. The International segment posted an adjusted operating income of $2M, showing a $7M improvement from the previous year. This was a result of ongoing cost structure optimization efforts aimed at enhancing earnings and competitiveness.

Market and Strategic Initiatives

Sara Armbruster, CEO of Steelcase, highlighted significant progress in diversifying customer market segments, transforming the workplace, and focusing on sustainability. Steelcase's innovations such as the Ocular Collection, Campers & Dens by Orangebox, and creative collaborations with the Frank Lloyd Wright Foundation, have been well-received by the market and are poised to drive future growth.

Additionally, Steelcase announced a commitment to reach net zero carbon emissions by 2050, further strengthening its market position and supporting customer sustainability goals.

Outlook for Q2 2025

Looking ahead, Steelcase expects Q2 revenue to be in the range of $850M to $875M, reflecting a year-over-year organic growth of 1% to 4%. Adjusted EPS is projected to be between $0.36 and $0.40. The company remains confident in achieving its fiscal year targets, driven by continued strong performance and strategic initiatives.

Report Details: SEC Filing

Company Website: Steelcase Inc.