Steelcase (SCS) Q1 2025 earnings summary

Executive summary

• Achieved strong earnings growth in Q1 FY25, with adjusted EPS up 78% year-over-year, despite a 3% revenue decline, driven by pricing benefits and lower restructuring costs.

• Strategic priorities include workplace transformation, customer diversification, profitability improvement, and sustainability, with a commitment to net zero carbon emissions by 2050.

• Launched new products and partnerships, including Ocular View with Logitech, Orangebox Campers & Dens, and Frank Lloyd Wright-inspired collections.

• Continued operational cost reductions and restructuring actions, including workforce reductions and facility closures, with further gains expected.

• Ongoing investments in ERP systems and business transformation initiatives.

Financial highlights

• Q1 FY25 revenue was $727.3 million, down 3% year-over-year, at the midpoint of guidance.

• Adjusted operating income increased to $28.2 million (3.9% margin), up from $19.7 million (2.6% margin) year-over-year.

• Gross margin improved to 32.2%, up 180 basis points year-over-year, driven by pricing and operational efficiencies.

• Orders grew 8% year-over-year in Q1, with the Americas up 10% and International up 2%.

• Liquidity at quarter-end was $377.8 million, up $177.9 million year-over-year, with total debt at $446.5 million.

Outlook and guidance

• Q2 FY25 revenue expected between $850 million and $875 million, reflecting 1%-4% organic growth year-over-year.

• Q2 adjusted EPS guidance is $0.36-$0.40, up from $0.31 in the prior year.

• Full-year FY25 targets reaffirmed: 1%-5% organic revenue growth and adjusted EPS of $0.85-$1.00.

• Increased confidence in achieving or exceeding the higher end of income targets, assuming stable macroeconomic conditions.

• Planned capital expenditures of $40–$50 million and $35 million for ERP-related cloud computing in 2025.