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SI

STEELCASE INC (SCS)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered revenue of $897.1M and adjusted EPS of $0.45, beating S&P Global consensus estimates of $873.6M* revenue and $0.365* EPS; GAAP EPS was $0.29 .
  • Orders grew 6% YoY, led by 8% growth in the Americas, while International orders declined 1%; large corporate customers remained the primary demand driver .
  • Margins: gross margin was 34.4% (down ~10bps YoY on tariffs, EMEA discounting, and restructuring), GAAP operating margin was 5.9%, and adjusted operating margin improved to 8.4% (CFO: +40bps YoY) .
  • No forward guidance provided due to the pending HNI merger; prior Q1 guidance ranges for Q2 ($860–$890M revenue; $0.36–$0.40 adjusted EPS) were exceeded; quarterly dividend of $0.10 per share declared .
  • Strategic catalyst: HNI acquisition expected to close by year-end 2025, with $2.2B consideration and projected $120M synergies; management avoided merger Q&A on the call .

Note: * Values retrieved from S&P Global

What Went Well and What Went Wrong

What Went Well

  • Robust demand from large corporate customers drove 5% revenue growth and 6% orders growth; International revenue grew 13% (8% organic), led by India, with Americas organic growth of 3% .
  • Adjusted operating margin rose to 8.4% (CFO noted ~40bps YoY improvement); Americas posted 11.0% adjusted operating margin, and International’s adjusted operating loss improved by $5M YoY .
  • Management highlighted volume-driven order growth in the Americas and strong project-based activity as workplaces are redesigned for connection, creativity, and performance (“we continue to lead the transformation of the workplace”) .

What Went Wrong

  • Gross margin was approximately flat YoY at 34.4% due to higher tariffs, unfavorable mix, higher EMEA discounts, and restructuring costs (+$1.7M) .
  • International orders declined 1% on weakness in Germany and France; EMEA profitability remains pressured despite improvements, and restructuring actions continue .
  • Operating expenses rose $42.0M YoY, reflecting lower gains on land sales ($39.6M YoY impact), $7.1M merger costs, FX headwinds, and higher director deferred compensation tied to the stock price move post-merger announcement .

Financial Results

Headline Metrics vs Prior Two Quarters

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD Millions)$788.0 $779.0 $897.1
Operating Margin (%)1.2% 3.3% 5.9%
EPS - Diluted ($)$0.23 $0.11 $0.29
Adjusted EPS - Diluted ($)$0.26 $0.20 $0.45

Year-over-Year (Q2 2026 vs Q2 2025)

MetricQ2 2025Q2 2026
Revenue ($USD Millions)$855.8 $897.1
Gross Margin (%)34.5% 34.4%
Operating Margin (%)10.5% 5.9%
EPS - Diluted ($)$0.53 $0.29
Adjusted EPS - Diluted ($)$0.39 $0.45
Orders Growth YoY (%)—6%

Actual vs Consensus (Q2 2026)

MetricConsensus MeanActual
Revenue ($USD Millions)$873.6*$897.1
Adjusted EPS - Diluted ($)$0.365*$0.45

Note: * Values retrieved from S&P Global

Segment Breakdown (Q2 2026 vs Q2 2025)

MetricQ2 2025Q2 2026
Americas Revenue ($USD Millions)$688.0 $707.1
International Revenue ($USD Millions)$167.8 $190.0
Revenue Mix – Americas (%)80.4% 78.8%
Revenue Mix – International (%)19.6% 21.2%
Adjusted Operating Income – Americas ($USD Millions)$76.1 $78.0
Adjusted Operating Margin – Americas (%)11.1% 11.0%
Adjusted Operating Income – International ($USD Millions)$(7.6) $(2.7)
Adjusted Operating Margin – International (%)(4.5%) (1.4%)

KPIs and Balance Sheet

KPIQ1 2026Q2 2026
Orders Growth – Americas YoY (%)(1%) 8%
Orders Growth – International YoY (%)1% (1%)
Total Liquidity ($USD Millions)$391.5 $426.8
Total Debt ($USD Millions)$447.3 $447.4
Adjusted EBITDA ($USD Millions)$64.8 $99.6
Adjusted EBITDA Margin (%)8.3% 11.1%
Dividend per Share ($)$0.10 $0.10

Non-GAAP reconciliation drivers in Q2: amortization of purchased intangibles ($4.4M), restructuring costs ($11.9M), land sale gain ($(1.2)M), merger costs ($7.1M) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Q2 RevenueQ2 FY26$860–$890M (Q1 release) No new guidance; Actual delivered $897.1M Exceeded prior guidance
Q2 Adjusted EPSQ2 FY26$0.36–$0.40 (Q1 release) No new guidance; Actual delivered $0.45 Exceeded prior guidance
FY26 Organic Revenue GrowthFY26Mid-single digit targeted (Q4 release) No update provided (pending HNI) Maintained targets; suspended updates
FY26 Adjusted Operating MarginFY26Modest improvement vs FY25 (Q4 release) No update provided (pending HNI) Maintained targets; suspended updates
FY26 OI&EFY26~ $10M (interest, investment income, other net) (Q4 release) No update provided (pending HNI) Maintained targets; suspended updates
FY26 Tax RateFY26~27% (Q4 release) No update provided (pending HNI) Maintained targets; suspended updates
DividendQuarterly$0.10 per share $0.10 per share (declared for Q2) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
Return-to-office large corporate demandAmericas orders +12% in Q4; strong large corporate demand Continued strength; revenue/orders led by large corporates; project-based orders outpaced continuing business Improving
Education/government demandQ1 showed declines in government/education vs prior year Education declines due to changes in federal funding policy impacting demand Weakening
Tariffs and pricingQ1: tariffs up ~$7M net of pricing benefits Pricing actions offset YoY inflation/tariffs in Q2; cumulative catch-up still ongoing Stabilizing (near-term), volatile cumulatively
International (APAC vs EMEA)Q1: International organic revenue down 1% on Germany/France weakness APAC profitable; improvement in China demand; EMEA improved but France/Germany weak; restructuring continues Mixed (APAC improving; EMEA pressured)
Margins/mixQ1 gross margin 33.9% (+170bps YoY) Q2 gross margin 34.4% (flat YoY) with EMEA discounts; adjusted op margin 8.4% (+40bps YoY) Adjusted margin improving; gross margin stable
Merger (HNI)Fiscal 2026 targets set; transaction announced Aug 4 No forward guidance; avoiding merger Q&A; expected close by YE25 Proceeding toward close

Management Commentary

  • CEO: “Our second quarter revenue and order growth was led by continued strengthening of demand from our large corporate customers… they are turning to Steelcase for research-driven solutions that support connection, creativity and performance.”
  • CEO: “We remain focused on executing our strategy and winning new business while preparing for our anticipated acquisition by HNI.”
  • CFO: “Our adjusted earnings of $0.45 per share finished above our estimated range, driven by higher revenue and favorable gross margins, which benefited from favorable shifts in business mix.”
  • CFO: “On a year-over-year basis, the benefits from our pricing actions offset the tariffs and incremental inflation... It’s going to probably take another couple of quarters before we fully catch up on a cumulative basis.”
  • CFO: “APAC was profitable in the quarter… China starting to show some demand improvement… EMEA improved… France and Germany are down.”

Q&A Highlights

  • Volume vs price: Americas 8% order growth was “more driven by volume than price”; pricing benefits offset YoY inflation/tariffs in Q2 .
  • Demand favorability: End-markets more favorable than anticipated, with strong large corporate demand; education weakness masks the underlying strength .
  • Project vs continuing business: Project-based orders grew faster than continuing business, supporting transformation of office spaces .
  • International profitability: APAC profitable; EMEA improved via cost reductions, but macro weakness persists in Germany/France .
  • Order cadence: Q2 order flow was steady; first three weeks of Q3 were roughly flat YoY .

Estimates Context

  • Q2 FY26 results vs S&P Global consensus: revenue $897.1M vs $873.6M*, adjusted EPS $0.45 vs $0.365* — both beats; Q1 FY26 also exceeded consensus ($779.0M vs $759.9M*, $0.20 vs $0.133*), while Q2 FY25 actuals were below revenue consensus but above EPS consensus .
  • With stronger-than-expected orders and favorable mix, near-term estimates for margins may need upward revision; conversely, education-funded demand remains a headwind to segment forecasts .

Note: * Values retrieved from S&P Global

Key Takeaways for Investors

  • Clear beat on both revenue and adjusted EPS vs consensus; outperformance driven by large corporate demand and favorable mix — a positive near-term trading catalyst .
  • Americas strength continues; project-driven orders suggest sustained capex for reconfiguring offices — supportive of backlog and shipment visibility .
  • International recovery is uneven: APAC profitability and improving China demand offset EMEA weakness in France/Germany; restructuring actions are ongoing to improve segment profitability .
  • Pricing actions have offset YoY tariff/inflation pressure, but cumulative margin catch-up is still underway; expect volatility in tariff-related costs to persist .
  • No forward guidance due to HNI merger; actual Q2 exceeded prior Q1 guidance ranges — focus shifts to merger closing and potential synergy realization ($120M run-rate) .
  • Liquidity remains solid ($426.8M) with debt at $447.4M; adjusted EBITDA run-rate improved to $278.3M (8.5% of revenue) — financial flexibility intact during transaction period .
  • Dividend maintained at $0.10 — income support while strategic transaction advances .