Steelcase's Q2 2026: Contradictions Emerge on Pricing Strategies, International Profitability, and Americas Demand Outlook

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

Date of Call: None provided

Financials Results

• Revenue: $897M, up 5% YOY (4% organic growth); above June outlook
• EPS: $0.45 adjusted EPS, up YOY and above estimated range
• Operating Margin: 8.4% adjusted, up 40 bps YOY; Americas at 11% (~flat YOY)

Business Commentary:

• Strong Revenue and Earnings Growth:
• Steelcase reported a 5% increase in revenue in the second quarter, marking the highest quarterly results in the past five years.

• This growth was driven by strong demand from large corporate customers, particularly in the Americas, and international revenue growth of 13%, including 8% on an organic basis.

• Order Growth and Large Corporate Demand:

• Orders grew by 6% in the second quarter, with a notable 8% increase in the Americas.

• The growth was supported by continued demand from large corporate customers, especially in the financial services and technology sectors.

• International Revenue and Profitability:

• The international segment posted a 13% revenue growth, with 8% growth on an organic basis, supported by strong results from India.

• Profitability improved by $5 million compared to the prior year, driven by cost reduction actions and revenue growth.

• Impact of Macroeconomic Challenges:

• Some international markets, such as Germany and France, experienced declines in orders due to macroeconomic challenges.

• Steelcase is focusing on winning available business and aligning resources to target the best opportunities in these markets.

• Proposed Merger with HNI Corporation:

• Steelcase is pursuing a proposed transaction with HNI Corporation, aiming to expand its reach within markets.
• The combination is expected to bring together the industry's best brands, benefiting shareholders, customers, dealers, and employees.

Sentiment Analysis:

• “Highest quarterly results over the past five years.” Revenue $897M above outlook; adjusted EPS $0.45 above range. Revenue up 5% YOY (4% organic); orders up 6% (Americas +8%). Adjusted operating margin 8.4%, +40 bps YOY; Americas AOM 11% (~flat). International adjusted results improved $5M; APAC profitable, though Germany/France and education softer.

Q&A:

• Question from Joseph Gomes (Noble Capital Markets): Can you break out the outperformance between volume versus price?
  Response: Americas 8% order growth was mostly volume; price benefit was only a couple of percentage points.

• Question from Joseph Gomes (Noble Capital Markets): Any additional price increases coming, and are tariffs fully offset?
  Response: No comment on future pricing; Q2 YOY pricing benefits offset inflation and tariffs.

• 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 is stronger than anticipated, partially offset by education declines.

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

• Question from Steven Ramsey (Thompson Research Group): How did international profitability improve—APAC vs. Europe?
  Response: Both improved; APAC was profitable with ongoing cost reductions and better China demand; EMEA improved on revenue and costs, but France/Germany remain weak.

• Question from Reuben Garner (The Benchmark Company): Have pricing actions fully offset inflation/tariffs, and what’s the timing of flow-through?
  Response: In Q2 YOY, pricing offset tariffs/inflation and began aiding margins; cumulatively still catching up—likely a few more quarters amid volatility.

• Question from Reuben Garner (The Benchmark Company): What was the order cadence in the Americas during the quarter and early Q3?
  Response: Orders were evenly spread across Q2; first three weeks of Q3 are roughly flat YOY.

• Question from Reuben Garner (The Benchmark Company): Any notable mix changes in how offices are being configured versus last year or pre-2020?
  Response: More redesigns to attract employees, with greater emphasis on privacy, collaboration, and integrated technology.