What happened

Shares of office furniture maker Steelcase (NYSE:SCS) fell as much as 14.3% on Wednesday due to a disappointing first-quarter earnings report. The stock recovered to a milder 11.8% drop as of 2:50 p.m. EDT.

So what

Steelcase's first-quarter sales fell 41% year over year to $483 million. The bottom line swung from a modest profit in the year-ago period to an adjusted net loss of $0.18 per diluted share. Your average Wall Street analyst had been looking for a net loss of $0.14 per share on revenue in the neighborhood of $530 million.

Photo of a modern office space with sleek furniture but not a single worker in sight.

Empty offices are a nightmare for Steelcase. Image source: Getty Images.

Now what

The COVID-19 work-from-home environment has not been kind to Steelcase. Order volumes declined by 16% in March, 47% in April, and 42% in May. The next quarter is off to a weak start as well, with 34% lower orders in the first four weeks of June.

On the upside, Steelcase has a backlog of unfilled orders worth $751 million and all of its manufacturing and distribution facilities are fully operational after a brief period of work stoppage. The company is just waiting for businesses to start investing in their furniture and office supplies again. Management expects to burn through "most of" the backlog during the second quarter.

Steelcase's stock now trades for less than nine times trailing earnings after a 42% price drop in the first half of 2020. I am convinced that the company and stock is poised for a significant rebound from this deep, dark trough, but the speed and size of this rebound will depend on the shape of the COVID-19 recovery and whether the health crisis inspired companies to adopt work-from-home procedures on a permanent basis.