Steelcase Estimated Flat Revenues In Q4 Despite Price Hikes

  • Scott Peters
  • Dec 20, 2022
  • The steel furniture maker said fiscal third quarter revenue and earnings were near the bottom-end of its estimated range and said new order flow began to weaken in the fourth quarter.

    Steelcase Inc soared 12.3% to $7.02 after the furniture maker reported earnings and sales near the bottom-end of its guidance.  

    Revenue in the fiscal third quarter ending in November increased 12% to $826.9 million from $738.2 million a year ago. 

    Net income in the quarter increased 18.8% to $11.4 million from $9.6 million and diluted earnings per share rose to 10 cents from 8 cents a year ago. 

    Gross margin increased 120 basis points to 28.8% after the company implemented additional price increases. 

    The company had guided third quarter revenue between $825 million and $850 million and GAAP earning between 8 cents and 12 cents a share. 

     

    Segment Breakdown 

    of total revenues, Americas was 71.9% and Europe, the Middle East and Africa was 19.1% and Australia and Indo Pacific nations was 9.0%.

    Revenue in the Americas increased 19% and EMEA region fell 6% and other region rose 7%.

     

    Order Backlog 

    The company said order backlog at the end of the third quarter increased 3.0% from a year ago to $854 million. 

    Orders through the first three weeks of the fourth quarter declined approximately 6% compared to the prior year. 

     

    Outlook and Guidance 

     The company guided fourth quarter fiscal 2023 revenues in the range of $740 million and $765 million, compared to $753.1 million a year ago. 

    The company also estimated earnings per share between 5 cents and 9 cents in the fiscal fourth quarter, compared to a loss of 2 cents in the quarter a year ago. 

     

    Dividends

    The  board of directors approved 10 cents per share dividends on or before January 13, 2023 to shareholders on record January 3, 2023. 

     

    "On a global basis, year-over-year pricing benefits have exceeded year-over-year inflation for the last two quarters;  however, we estimate cumulative inflation over the last seven quarters exceeds the cumulative benefits from our  pricing actions by approximately $60 million," said Dave Sylvester, senior vice president and CFO.

    "Moving into the fourth quarter and first half of fiscal 2024, we expect continued year-over-year gross margin benefits from our pricing actions, as we aim to recover the cumulative  impact of inflation," added Sylvester. 


Annual Returns

Company Ticker 2023 2022 2021
Steelcase Inc SCS 5% -40% -12%

Press Release