What happened
Shares of Steelcase (SCS 1.26%) are up 19.6% this week as of 3:10 p.m. ET Friday, according to data provided by S&P Global Market Intelligence, after the furniture manufacturer announced better-than-expected fiscal second-quarter results.
So what
To be sure, Steelcase stock popped more than 16% on Wednesday alone after the company's earnings release hit the wires. For its fiscal Q2 ended Aug. 25, 2023, revenue declined 1% year over year to $854.6 million, translating to a 35.3% increase in earnings to $0.23 per share. Adjusted for one-time items such as restructuring costs, Steelcase's (non-GAAP) earnings rose nearly 48% year over year to $0.31 per share.
Analysts, on average, were only expecting adjusted earnings of $0.20 per share on revenue closer to $829 million.
Steelcase CEO Sara Armbruster credited the revenue and earnings beats to both pricing power and improvements in the company's order fulfillment patterns.
Now what
Looking ahead to the current fiscal Q3, Steelcase expects adjusted earnings per share of between $0.23 and $0.27 (up from $0.20 per share a year earlier), with revenue ranging from $780 million to $805 million (down 3% to 6% year over year). Here again, both ranges were well above analysts' consensus estimates for fiscal Q3 earnings of $0.19 per share on revenue of $819 million.
In the end, this was a solid beat followed by encouraging forward guidance. Steelcase stock is simply responding in kind.
