- Revenue grew 5% compared to prior year, led by strong growth from large corporate customers in the Americas and from the India market in International
- Gross margin of 34.4% was approximately flat compared to prior year despite higher tariff and restructuring costs
- Orders grew 6% compared to prior year, led by continued growth from large corporate customers in the Americas
Steelcase Inc. (NYSE: SCS) today reported second quarter revenue of $897.1 million, net income of $35.0 million, or $0.29 per share, and adjusted earnings per share of $0.45. In the prior year, Steelcase reported revenue of $855.8 million, net income of $63.1 million, or $0.53 per share, and adjusted earnings per share of $0.39.
As previously announced, on August 3, 2025, the company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with HNI Corporation (“HNI”), Geranium Merger Sub I, Inc., and Geranium Merger Sub II LLC, pursuant to which HNI will acquire the company in a cash and stock transaction, with a total consideration of approximately $2.2 billion to the company’s common shareholders. The transaction is expected to close by the end of calendar year 2025 and is subject to approval by HNI’s and the company’s shareholders, the receipt of required regulatory clearances and the satisfaction of other customary closing conditions.
Revenue grew 5 percent in the second quarter compared to the prior year and grew 4 percent on an organic basis, including organic growth of 3 percent in the Americas and 8 percent in International. The Americas growth was driven by strong growth from large corporate customers, partially offset by a decline from education customers. The International growth was driven by India, China and the United Kingdom, partially offset by declines in France and Germany.
Orders (adjusted for currency translation effects) grew 6 percent in the second quarter compared to the prior year and included 8 percent growth in the Americas and a 1 percent decline in International. The Americas reflected growth from large corporate customers and small to midsized businesses, partially offset by declines from education and government customers. In International, declines in Germany and France were mostly offset by growth in India and Japan.
“Our second quarter revenue and order growth was led by continued strengthening of demand from our large corporate customers,” said Sara Armbruster, president and CEO. “Business leaders are making investments in their workplaces as they bring their employees together, and they are turning to Steelcase for research-driven solutions that support connection, creativity and performance.”
Operating income of $53.1 million in the second quarter represented a decrease of $36.9 million compared to the prior year and included $11.9 million of restructuring costs, $7.1 million of costs related to the pending merger with HNI and a $1.2 million gain from the sale of land (net of related variable compensation expense). In the prior year, operating income included a $27.9 million gain from the sale of land (net of related variable compensation expense) and $2.2 million of restructuring costs. Adjusted operating income of $75.3 million in the second quarter represented an increase of $6.8 million compared to the prior year, including an improvement of $4.9 million in the International segment.
“Higher volume in India and China drove the $5 million reduction in our year-over-year adjusted operating loss in our International segment this quarter,” said Dave Sylvester, senior vice president and CFO. “We executed additional actions this quarter that are targeted to further reduce our cost structure to support our goal of improved profitability in our International segment.”
Gross margin of 34.4 percent in the second quarter represented a decrease of 10 basis points compared to the prior year driven by higher tariff costs, unfavorable business mix, higher discounts in EMEA and $1.7 million of higher restructuring costs, which were mostly offset by pricing benefits, cost reduction initiatives, and lower variable compensation (driven by the lower gains on the sale of land).
Operating expenses of $247.1 million in the second quarter represented an increase of $42.0 million compared to the prior year. The increase was driven by $39.6 million of lower gains on the sale of land, $7.1 million of merger transaction costs in the current year, $3.1 million of unfavorable currency translation effects and $2.6 million of higher non-employee director deferred compensation expense (primarily driven by an increase in the company’s stock price following the announcement of the Merger Agreement), partially offset by $8.3 million of lower variable compensation expense (driven by lower gains on the sale of land which resulted in $12.9 million of lower variable compensation expense).
Other income, net of $3.0 million in the second quarter represented an improvement of $3.6 million compared to other expense, net in the prior year, primarily due to higher income from unconsolidated affiliates.
Total liquidity, which is comprised of cash and cash equivalents, short-term investments and the cash surrender value of company-owned life insurance, aggregated to $426.8 million at the end of the second quarter and represented a decrease of $80.3 million compared to the prior year. Total debt was $447.4 million. Trailing four quarter adjusted EBITDA was $278.3 million, or 8.5 percent of revenue.
The Board of Directors has declared a quarterly cash dividend of $0.10 per share, to be paid on or before October 20, 2025, to shareholders of record as of October 6, 2025.
“We are proud of the results our teams delivered this quarter as we remain focused on executing our strategy and winning new business while preparing for our anticipated acquisition by HNI,” said Armbruster. “As an industry leader, we continue to help our customers around the world reimagine their workplaces in ways that support how people want to work today and in the future.”
The full text of Steelcase’s 2Q26 earnings release, including all tables, and a replay of the company’s Sep. 25 conference call may be accessed at http://ir.steelcase.com.
About Steelcase Inc.
Steelcase (NYSE: SCS) is a global design and thought leader in the world of work. Our purpose is to help the world work better. Along with more than 30 creative and technology partner brands, we research, design and manufacture furnishings and solutions for many of the places where work happens — including offices, homes, and learning and health environments. Together with our 11,300 employees, we’re working toward better futures for the wellbeing of people and the planet. Our solutions come to life through our global community of expert Steelcase dealers in approximately 790 locations, store.steelcase.com and other retail partners. For more information, visit Steelcase.com.