Steelcase Reports Larger Profit, Despite Decline in Sales

Steelcase, the renowned furniture company, has announced its financial results for the third quarter ended Nov. 24. While the company witnessed a decline in revenue, it managed to achieve a larger profit compared to the previous year.

Impressive Financial Figures

Steelcase reported a net income of $30.8 million, or 26 cents per share, for the third quarter. This represents a significant increase from $11.4 million, or 10 cents per share, earned during the same period last year. Notably, this exceeds the expectations of analysts polled by FactSet who predicted earnings of 19 cents per share.

Factors Behind Profit Increase

The earnings per share were positively impacted by approximately 10 cents due to both the reversal of an accrued earnout liability and gains from the sale of fixed assets. These factors played a crucial role in bolstering Steelcase’s profitability.

Decline in Revenue

Despite the impressive profit margin, Steelcase experienced a decline in revenue by 6%, amounting to $777.9 million. Analysts had anticipated revenue of $796.4 million based on the FactSet poll.

Organic Revenue Decline

On an organic basis, Steelcase witnessed a similar decline of 6% in its revenue. The company attributes this decline to a lower backlog at the beginning of the quarter.

Growing Orders

In a positive trend, Steelcase observed a 15% increase in orders during the third quarter compared to the previous year. This growth was primarily driven by large corporate customers in the Americas business segment. Additionally, the international business segment experienced a 10% increase, primarily due to growth in the Asia Pacific region.

Steelcase’s financial performance in the third quarter demonstrates its resilience and ability to generate profitability despite challenges in the market. As the company continues to navigate through changing dynamics, it will be interesting to see how it adapts and capitalizes on emerging opportunities.