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NEW YORK - Steelcase Inc . (NYSE:SCS) reported better-than-expected first quarter results on Wednesday, but shares tumbled 5.9% in after-hours trading as the office furniture maker’s second quarter guidance fell short of analyst estimates.
The Grand Rapids, Michigan-based company posted adjusted earnings of $0.20 per share for the first quarter, surpassing the consensus forecast of $0.14. Revenue rose 7% YoY to $779 million, also beating expectations of $762.35 million.
However, Steelcase’s outlook for the current quarter disappointed investors. The company projects second quarter adjusted earnings of $0.36 to $0.40 per share, below the $0.41 analysts were anticipating.
"Our first quarter results were a great start to the year," said Sara Armbruster, president and CEO. "We delivered strong revenue growth, led by our large corporate customers who are investing to reimagine their workplaces."
Revenue in the Americas segment, Steelcase’s largest market, increased 9% organically to $603.6 million. The International segment saw a 1% organic decline to $175.4 million.
Gross margin improved 170 basis points YoY to 33.9%, driven by higher volume in the Americas and benefits from cost reduction initiatives. This was partially offset by approximately $7 million in higher tariff costs.
For the second quarter, Steelcase expects revenue of $860 million to $890 million, representing flat to 4% growth compared to the prior year.
"Our customer conversations remain very active," Armbruster added. "These interactions reinforce the trust our customers place in us and the relevance of our solutions in a changing world of work."
The company maintained its quarterly dividend of $0.10 per share.
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