Steelcase (SCS) Q1 Earnings Report Preview: What To Look For

Ladies and gentlemen, buckle up! We're diving headfirst into the world of office furniture and design with Steelcase Inc. (SCS) as they prepare to release their Q1 2025 earnings report. This isn't just any earnings report; it's a critical moment for investors to gauge the company's performance and future prospects. So, let's get down to business and see what we need to look out for!

First things first, let's talk about the elephant in the room: revenue growth. In Q1 2024, Steelcase reported a 2% increase in revenue, but this time around, we're seeing a 3% decline to $727.3 million. Now, don't panic! This decline is partially due to a lower beginning backlog in the Americas, which was affected by supply chain disruptions and extended delivery timeframes in the prior year. But here's the kicker: order growth is up 8% compared to the prior year, with a whopping 10% growth in the Americas. This is a clear indication that the company is on the right track, and the future looks bright!

Now, let's talk about the Americas segment. This is where the magic is happening! Order growth in the Americas was primarily driven by project business with large corporate customers and the education business. Companies are investing in their office spaces to support the transformation of work and other workplace strategies. And let's not forget about the education business, which delivered strong first-quarter order growth at the start of the peak education season. This is a no-brainer: if you're looking for growth, growth, growth, the Americas segment is where it's at!

But what about the International segment? Well, order growth was up 2% in the first quarter of fiscal 2025. This growth was driven by a 4% increase in EMEA, partially offset by a 3% decline in Asia Pacific. The growth in EMEA reflected growth in most markets and a decline in Germany, while the decline in Asia Pacific included declines in most markets, partially offset by strong growth in India. So, while the International segment may not be as robust as the Americas, it's still showing signs of life.

Now, let's talk about the bottom line. Steelcase's adjusted earnings per share improved to $0.16, compared to $0.09 in the prior year. This is a clear indication that the company is managing its costs effectively despite the revenue decline. And with a strong second-quarter outlook driven by education and large corporate customers, the first-half outlook reflects a pace towards the higher end of full-year income targets. This is a no-brainer: if you're looking for a company that's managing its costs effectively and positioning itself for future growth, Steelcase is the way to go!

But don't just take my word for it. Let's look at the data. This chart shows that while revenue may have declined in Q1 2025, order growth is up across the board. This is a clear indication that the company is on the right track, and the future looks bright!

So, what's the bottom line? Steelcase's Q1 2025 earnings report is a mixed bag, but there are plenty of reasons to be optimistic. With strong order growth in the Americas and a clear focus on cost management, the company is positioning itself for future success. And with a strong second-quarter outlook and a first-half outlook that reflects a pace towards the higher end of full-year income targets, the future looks bright for Steelcase. So, do yourself a favor and keep an eye on this stock. It's a no-brainer!