Steelcase (SCS) Q1 2025 earnings summary

Executive summary

• Achieved strong earnings growth in Q1 FY25, with adjusted EPS up 78% year-over-year to $0.16, despite a 3% revenue decline to $727.3 million, driven by pricing benefits and lower restructuring costs.

• Orders grew 8% year-over-year, with 10% growth in the Americas, led by large corporate and education customers.

• Strategic initiatives advanced in workplace transformation, market diversification, and sustainability, including a net zero by 2050 commitment.

• Launched new products and partnerships, such as Ocular View with Logitech and Frank Lloyd Wright Foundation collections.

• Continued operational cost reductions and restructuring actions, with ongoing investments in ERP and business transformation.

Financial highlights

• Q1 revenue was $727.3 million, with gross margin improving to 32.2% (up 180 basis points year-over-year), and adjusted operating income rising to $28.2 million.

• Trailing four-quarter adjusted EBITDA was $273.6 million (8.7% of revenue), up 17% year-over-year.

• Liquidity at quarter-end was $377.8 million, up $177.9 million from the prior year; total debt was $446.5 million.

• Repurchased 1.5 million shares for $18.7 million during the quarter; $87.7 million remains under repurchase authorization.

• Operating expenses decreased by $3.1 million, reflecting cost savings and divestiture, partially offset by higher compensation and IT costs.

Outlook and guidance

• Q2 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 $0.85-$1.00 adjusted EPS, with increased confidence in reaching the higher end.

• Projected Q2 gross margin of ~35% and operating expenses of $240-$245 million.

• Quarterly dividend of $0.10 per share declared for Q2 2025.