Steelcase (SCS) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue grew 2% year-over-year to $794.9 million, led by 5% growth in the Americas and a 6% decline in International; adjusted EPS was $0.30, exceeding guidance.

• Net income for Q3 2025 was $19.1 million ($0.16 per share), down from $30.8 million ($0.26 per share) in the prior year, impacted by a $15.2 million non-cash pension settlement charge.

• Americas segment drove results with 7% organic revenue growth and 8.1% adjusted operating margin, while International underperformed with an 8% organic revenue decline and restructuring actions.

• Full-year adjusted EPS is expected to finish above the top end of initial targets, with cautious optimism for fiscal 2026 growth.

• Strategic focus includes innovation, sustainability, and operational cost reductions, with mid-term targets for $50M+ cost savings and 4–6% organic revenue growth.

Financial highlights

• Q3 2025 revenue was $794.9 million (+2% year-over-year); Americas $614.7 million (+5%), International $180.2 million (–6%).

• Q3 2025 adjusted operating income was $47.3 million; adjusted EPS was $0.30; trailing four-quarter adjusted EBITDA was $284 million (9.0% margin), up 9% year-over-year.

• Cash and short-term investments increased to $406.3 million; total liquidity at $576.6 million, exceeding total debt of $446.9 million.

• Returned over $60 million to shareholders via dividends and share repurchases in the first nine months of fiscal 2025.

• Operating expenses rose due to higher employee costs and absence of prior year gains.

Outlook and guidance

• Q4 2025 revenue expected between $770–$795 million, representing an organic decline of 4%–7%; adjusted EPS projected at $0.20–$0.24; gross margin expected at 33.5%.

• Fiscal 2025 adjusted EPS expected above targeted range; fiscal 2026 targets low to mid-single-digit organic revenue growth and gross margin expansion.

• Mid-term (3–4 years) targets: $400M adjusted operating income, 6–7% adjusted operating income margin, and 4–6% organic revenue growth.

• Free cash flow expected to be ~5% of revenue over the mid-term; ongoing $50M+ operational cost reduction program.

• Management expects continued investment in business transformation and ERP implementation, with capitalized costs to be amortized starting in 2026.