What happened
Shares of Steelcase (NYSE: SCS) were moving higher today, two days after the office furniture company posted strong results in its fourth-quarter earnings report.
The stock had initially popped yesterday but cooled off over the trading session. Today, investors seemed to give the stock a second look, and shares finished up 10%.
Image source: Getty Images.
So what
Revenue in the quarter rose 6% to $801.7 million, well ahead of estimates of $751.4 million.
Performance in the Americas was particularly strong as revenue was up 14% in the region, showing a benefit from a return to the office.
Profitability also improved, with gross margin increasing 370 basis points to 29.8% as the company raised prices to help absorb inflation.
Operating margin, meanwhile, surged from 0.3% to 3.6%, and adjusted earnings per share jumped from $0.01 to $0.19, beating expectations of $0.11.
CEO Sara Armbruster said, "In the Americas, our fourth quarter orders were stronger than we anticipated and drove revenue and earnings above our expectations. Although our fourth quarter orders were below the prior year, project business from large corporate customers improved sequentially from the third quarter."
Now what
Looking ahead, management said it expects to deliver continued earnings improvement in the first quarter and expects earnings growth in the new fiscal year thanks to price increases.
For the first quarter, the company sees a revenue decline of 1% to 4% to $710 million-$735 million, but that was better than estimates of $693.8 million. On the bottom line, it expects between a per-share loss of $0.02 and a per-share profit of $0.02, above the consensus of a loss of $0.07.
For the full year, it called for earnings per share (EPS) of $0.55 to $0.75, above the consensus of $0.59, and it forecast modest organic revenue growth.
Based on that guidance, it's not surprising to see the stock rising despite the long-term challenges in the office market.
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