Steelcase's Q2 2026: Contradictions Emerge on Americas Order Growth, International Profitability, and Pricing/Inflation Offset

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 25, 2025

Financials Results

• Revenue: $897M, up 5% YOY (4% organic)
• EPS: $0.45 (adjusted), above prior guidance; higher vs prior year (percent not disclosed)
• Operating Margin: 8.4% (adjusted), up 40 bps YOY; Americas 11.0% (~flat YOY)

Business Commentary:

* Revenue Growth and Market Demand: - Steelcase reported a 5% increase in revenue for Q2, with a notable 13% growth in the International segment, including 8% on an organic basis. - The growth was driven by strong performance from large corporate customers in the Americas and robust demand from markets such as India and China.

• Order Growth and Transformation:
• Orders grew by 6% in Q2, with the Americas segment posting an 8% increase, driven by large corporate customers.

• The growth was supported by customers redefining their spaces to accommodate new ways of working as employees return to the office, particularly in the financial services and technology sectors.

• Profitability and Cost Controls:

• Steelcase achieved an adjusted operating margin of 8.4% in Q2, representing a 40 basis point improvement compared to the prior year.

• The improvement was attributed to strong revenue growth and effective cost reduction efforts across the International segment, particularly in Asia Pacific.

• pending Merger with HNI:

• Steelcase continues to progress towards the completion of its pending merger with HNI, expected by the end of calendar year 2025.
• The transaction is expected to enhance the company's reach within markets, bringing together the industry's best brands to more customers.

Sentiment Analysis:

• Management cited the highest quarterly results in 5 years, revenue up 5% YOY to $897M, adjusted EPS of $0.45 above estimates, orders up 6% (Americas +8%), and adjusted operating margin of 8.4%, up 40 bps YOY. International operating results improved by $5M. Some headwinds persist (education declines; Germany/France weakness), and no forward guidance was provided.

Q&A:

• Question from Joseph Gomes (NOBLE Capital Markets): Can you break out the outperformance between volume and price in orders?
  Response: Americas 8% order growth was mostly volume; pricing contributed only a couple of points.

• Question from Joseph Gomes (NOBLE Capital Markets): Are more price increases coming, and have tariffs/inflation been offset?
  Response: No comment on future pricing; Q2 pricing benefits offset year-over-year tariffs and inflation from earlier actions.

• Question from Joseph Gomes (NOBLE Capital Markets): Are end markets more or less favorable than expected earlier in the year?
  Response: More favorable—large corporate demand exceeded expectations; education weakness tempered the total.

• Question from Steven Ramsey (Thompson Research Group): What’s driving strong Americas demand—return-to-office, relocations, or renovations?
  Response: All of the above; clients are redesigning for collaboration/privacy, with project orders outpacing continuing business (both positive).

• Question from Steven Ramsey (Thompson Research Group): How did International profitability trend in APAC versus Europe?
  Response: Both improved; APAC was profitable with cost cuts and better China demand; EMEA improved via cost reductions and growth outside weak France/Germany.

• Question from Reuben Garner (The Benchmark Company): Did pricing fully offset inflation/tariffs, and when will margins fully recover?
  Response: In Q2, pricing offset inflation/tariffs and began adding margin; cumulatively still behind—likely a few more quarters amid volatility.

• Question from Reuben Garner (The Benchmark Company): What was the cadence of Americas orders and early Q3 trend?
  Response: Orders were steady across Q2; first three weeks of Q3 are roughly flat year over year.

• Question from Reuben Garner (The Benchmark Company): Any notable changes in office mix/design vs. last year or pre-2020?
  Response: Customers are redesigning to meet strategic goals—more privacy, collaboration, and integrated technology.