Executive Summary
Steelcase reported QQ3 2025 results featuring 3% organic revenue growth driven by the Americas, with a solid gross margin expansion contributing to profitability despite International softness. Management highlighted ongoing transformation initiatives, including a Europe/Asia restructuring, a major ERP implementation targeted for go-live in fiscal 2026, and a strategic pivot toward growth levers such as healthcare diversification and circularity solutions. The quarter also showcased meaningful progress in order trends within the Americas and early positive indicators in China, while International markets continued to face headwinds from discounting and slower demand. Management remains confident in finishing fiscal 2025 above the top end of prior guidance and outlined a cautious, but constructive path toward mid-single-digit organic revenue growth in fiscal 2026, tempered by a lower initial margin profile as ERP costs normalize and as transformation investments transition from capitalization to expense. Key takeaways for investors include: (i) a resilient, margin-friendly Americas business and market share gains, (ii) continued investment in a multi-year ERP and process simplification program, (iii) growth opportunities in healthcare and circularity offerings, and (iv) ongoing international inflationary/discounting pressures and supply-chain risks to monitor.
Key Performance Indicators
QoQ: -54.44% | YoY:-6.39%
QoQ: -69.73% | YoY:-37.99%
QoQ: -68.63% | YoY:-38.46%
Key Insights
Revenue: $794.9 million for QQ3 2025, up 2.2% year-over-year. Gross profit: $265.4 million; gross margin: 33.39%. Operating income: $41.0 million; operating margin: 5.16%. Net income: $19.1 million; net margin: 2.40%. Earnings per share (GAAP): $0.16; weighted average shares: 119.4 million. Trailing four-quarter adjusted EBITDA: $284 million (margin 9.0%). Backlog at end of QQ3 2025: down 5% YoY. Orders: Americas +2% YoY; International -8% YoY; notable strength in China YoY for the first time in...
Financial Highlights
Revenue: $794.9 million for QQ3 2025, up 2.2% year-over-year. Gross profit: $265.4 million; gross margin: 33.39%. Operating income: $41.0 million; operating margin: 5.16%. Net income: $19.1 million; net margin: 2.40%. Earnings per share (GAAP): $0.16; weighted average shares: 119.4 million. Trailing four-quarter adjusted EBITDA: $284 million (margin 9.0%). Backlog at end of QQ3 2025: down 5% YoY. Orders: Americas +2% YoY; International -8% YoY; notable strength in China YoY for the first time in many quarters. Cash flow from operations: $98.9 million; free cash flow: $87.9 million. Cash at end of period: $372.4 million; total debt: $599.2 million; net debt: $(234.0) million. ERP go-live remains targeted for 2Q fiscal 2026; capital expenditures guidance for 2025 increased to about $100 million. Share repurchases: ~400k shares in Q3; ~2.1 million year-to-date; dividend of $0.10 per share in Q3. Management asserts fiscal 2025 adjusted EPS will finish above the top end of the prior range.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
794.90M |
2.19% |
-7.12% |
| Gross Profit |
265.40M |
5.19% |
-10.16% |
| Operating Income |
41.00M |
-6.39% |
-54.44% |
| Net Income |
19.10M |
-37.99% |
-69.73% |
| EPS |
0.16 |
-38.46% |
-68.63% |
Key Financial Ratios
operatingProfitMargin
5.16%
operatingCashFlowPerShare
$0.83
freeCashFlowPerShare
$0.74
dividendPayoutRatio
61.8%
Management Commentary
Management emphasized a continued workplace evolution driven by screen-based interactions, AI-enabled workspaces, and circular design. Key strategic themes include transformation through ERP upgrade, diversification into healthcare, and scalable circularity solutions (Circular by Steelcase). The executives highlighted the Americas as the growth engine with market-share gains and robust order activity, while International faced softer demand and strategic restructuring. The company signaled an inflection point in large corporate customer demand and improving activity from technology customers returning to office utilization. They noted near-term supply-chain disruption from a laminate supplier affected by Hurricane Helene, with mitigations in place. In framing 2026, management outlined a low-to-mid single-digit organic revenue growth target, with gross margin expansion largely driven by volume, and with some initial cost-gearing from ERP investments winding down as testing and go-live stabilize.
“we expect our fiscal 2025 adjusted earnings per share to finish above the top end of the targets we communicated at the beginning of the year.”
— Sara Armbruster
“we are now targeting our ERP go-live for the second quarter to provide more time for system development and testing.”
— David Sylvester
Forward Guidance
Near-term: QQ4 2025 revenue guidance of $770–$795 million implies an organic decline of 4%–7% versus the prior year, with adjusted EPS guidance of $0.20–$0.24. Gross margin target around 33.5% and SG&A in the $230–$235 million range (including ~$4.3 million of amortization). Tax rate guided at roughly 27%. The company continues to expect a meaningful ERP-related spend in 2025 with capitalization of certain costs, and an ongoing transition into 2026 where amortization of capitalized development costs and go-live inefficiencies may partially offset gross-margin gains from higher volumes. Long-term view: a low-to-mid single-digit organic revenue growth target for fiscal 2026, with gross-margin expansion primarily from volume growth and benefits from the new ERP system, but with relatively flat operating expense leverage. The primary catalysts include: (1) sustained large-corporate and technology customer demand in the Americas, (2) continued healthcare adoption and project wins, (3) successful circularity offerings expanding customer relationships, and (4) a stabilizing International backdrop post-restructuring. Risks to monitor include: macro headwinds, tariff and supply-chain disruptions, continued discounting pressure in Europe, project delays, and ERP implementation risks.