Steelcase, Inc. Q2 FY2026 earnings call

• Strong Q2 financial results with revenue and adjusted earnings growth, marking highest quarterly results in 5 years.
• Revenue growth led by Americas large corporate customers and 13% growth in International (8% organic, strong in India).
• Americas adjusted operating margin 11%, International adjusted operating results improved by $5M vs prior year.
• Orders grew 6% in Q2, 8% in Americas driven by large corporate customers, and 1% decline in International (offset by India and Japan growth).
• Customers rethinking office spaces for outcomes like creativity, collaboration, etc. Pending merger with HNI expected to expand reach.
• Cash and short-term investments increased $32M from Q1, adjusted EBITDA $100M, trailing 4-quarter adjusted EBITDA 8.5% of revenue.

In the second quarter, Steelcase increased revenue by 5%. The Americas segment delivered an adjusted operating margin of 11%. The International segment posted 13% revenue growth, including 8% on an organic basis, with strong results from India but declines in Germany and France due to macroeconomic challenges. Adjusted earnings improved due to revenue growth and cost controls. Americas large corporate customers drove growth, while International's 13% revenue growth included 8% organic growth, with India and some other markets showing strength but Germany and France being impacted.

Due to the pending combination with HNI, no forward-looking guidance is provided at this time.

• Macroeconomic challenges in Germany and France impacting International segment orders.
• Volatility in tariffs and inflation affecting margin recovery, with cumulative catch-up needed over several quarters.

Q: Congrats on the quarter. Could you break out the outperformance into volume vs price increases in Americas?

A: In Americas, 8% order growth was more driven by volume than price, with price benefits being a couple of percent.

Q: Stick with Americas demand patterns, is it more return to office driven or moving/updating existing spaces?

A: It's a mix of both, with clients rethinking office space, rethinking existing or moving to new space, focused on outcomes like creativity/collaboration/connection.

Q: Dig into profitability improvement in International, parse out Asia Pacific profitability trend?

A: Both Asia Pacific and Europe improved vs prior year, Asia Pacific profitable in the quarter with ongoing cost reduction efforts.

Q: Clarify order patterns in Americas, cadence and mix of project vs continuing business?

A: Order growth spread evenly across the quarter, project orders grew faster than continuing business.

Q: On pricing actions and margin recovery, status of tariff and inflation offset?

A: Second quarter benefits from pricing actions offset tariffs and inflation year-over-year, but cumulative catch-up needed over a couple of quarters.