Steelcase impresses in Q3

Steelcase impresses in Q3

(DECEMBER 19, 2019) Workplace furniture leader Steelcase reported a strong set of results in its third quarter and remains optimistic for its prospects in 2020.

The company’s sales for the three months ended 22 November 2019 were $955.2 million, an organic year-on-year improvement of 6%. This was despite tough comparisons from a year ago when like-for-like revenue was up 13%, although Q3 this year benefitted from a favourable timing shift of the Thanksgiving holiday in the US.

Sales grew by 8% in the Americas, were relatively flat in EMEA and increased by 5% in the Other reporting segment (comprising Asia-Pacific, Desingtex and PolyVision).

Earnings were also better than expected, driven by the Americas region where operating margin was almost 11%. The EMEA region moved into the black and is set to be profitable for the financial year as a whole.

While the rate of order growth in Q3 slowed to 4% – versus 10% in the prior-year third quarter – and Q4 sales are expected to be slightly down year on year, Steelcase CFO Dave Sylvester pointed to a positive outlook for the office furniture segment. In yesterday’s earnings conference call, he noted that the industry’s share of capital expenditure at the corporate level appeared to be growing as organisations continue to invest in their workplaces to help drive productivity and compete in the war to attract and keep talent.

“Overall sentiment from our sales leaders and dealers remains positive, and our opportunity pipelines for the first six months of fiscal 2021 continue to reflect project growth for the Americas, EMEA and Asia-Pacific,” he noted. - (OPI)