Steelcase (SCS) Q2 2025 earnings summary

Executive summary

• Achieved strong Q2 results with net income of $63.1 million, up from $27.5 million, and adjusted EPS of $0.39, driven by a significant land sale gain and improved gross margins.

• Revenue for Q2 was $855.8 million, nearly flat year-over-year, with 2% organic growth and strong performance in the Americas, especially in education and government segments.

• Strategic priorities include workplace transformation, diversification, profitability, and sustainability, with a mid-term target of $50M+ in cost reductions and net-zero carbon emissions by 2050.

• Maintained high win rates and market share gains in the Americas, while International demand remained soft except for India.

• Continued investment in research, product innovation, and business transformation, including ERP system implementation.

Financial highlights

• Adjusted EPS was $0.39, up from $0.31 year-over-year; Q2 revenue was $855.8 million, with gross margin improving to 34.5%.

• Adjusted operating income rose to $68.5 million, up from $53.3 million, and operating income reached $90.0 million, aided by a $27.9 million land sale gain.

• Trailing four-quarter adjusted EBITDA was $285.3 million (9.1% of revenue), up 16% year-over-year.

• Cash and short-term investments totaled $335.8 million as of August 23, 2024, with total liquidity at $507.1 million exceeding total debt.

• Returned $45 million to shareholders via share repurchases and dividends in the first half.

Outlook and guidance

• Q3 revenue expected between $785 million and $810 million, reflecting 1–5% organic growth year-over-year.

• Q3 adjusted EPS guidance of $0.21–$0.25, compared to $0.29 last year (which included $0.09 in one-time benefits); fiscal 2025 adjusted EPS target range reaffirmed at $0.85–$1.00.

• Confident in achieving the higher end of full-year adjusted EPS targets, but timing of large project orders and ERP system cutover could impact results.