GRAND RAPIDS, Mich. – Steelcase reported third quarter revenue of $794.9 million, an increase of 2% from last year.
Like its rival MillerKnoll, Steelcase’s success this quarter was driven by American region. Sales there grew 5%, and benefitted from increased business from government, large corporate, healthcare and education customers. Incoming orders for the segment grew 2%. Orders from large corporate customers strengthened in the last month of the quarter, but modestly declined overall compared to the prior year.
International sales on the other hand fell 6%, mostly due to declines in Asia, with the exception of India. Orders fell 8% for the segment.
“Our International results in the third quarter were below our expectations and were impacted by demand and some customer-driven shipment delays,” said Dave Sylvester, senior vice president and CFO. “We implemented additional restructuring actions and other cost reduction measures during the third quarter, which together are projected to drive approximately $5 million of annualized cost savings by the start of fiscal 2026.”
Gross margin of 33.4 percent in the third quarter represented an improvement of 100 basis points compared to the prior year driven by the benefits of revenue growth in the Americas and cost reduction initiatives.
Operating expenses of $223.8 million in the third quarter represented an increase of $17.3 million compared to the prior year. The prior year included favorable impacts of a $9.5 million decrease in the valuation of an acquisition earnout liability and $5.4 million of gains on the sale of fixed assets, including land. The remaining increase was driven by $6 million in higher employee costs, partially offset by a $4.4 million decrease from a divestiture.
At the end of the third quarter, the company’s backlog was approximately $664 million, which was 5% lower than the prior year. Orders in the first three weeks of the fourth quarter grew 15% compared to the prior year and included a number of large projects scheduled to ship beyond the end of the quarter. The company expects fourth quarter fiscal 2025 revenue, which contains an additional week compared to the prior year, to be in the range of $770 to $795 million, on track with the $775 million reported last fourth quarter.
See also:
e