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 11% -40% -12%

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