I admire Steelcase
Of course, that doesn't mean that Steelcase is setting any speed records with its turnaround. Revenue was up about 7.6% this quarter, with the benefits of acquisitions nearly canceling out the negative pressures of the adverse currency movement. With the margins, though, you see the benefits of positive operating leverage. Gross margins were flat, excluding charges, but the operating margin improved a fair bit, as operating income rose 24%.
As I've suspected since this past March, most of the easy "yes, Virginia, they really have turned the corner" money has already been made here. What that leaves, then, is a business in a tough sector. Makers of office furniture surely aren't experiencing the dire straits that many home furniture makers now find themselves in, but it's still a highly competitive sector.
I'm also not quite sure what to make of not selling through mass-market channels such as Office Depot
In all, Steelcase is a mature company in a mature industry. That means investors would do well to pay an above-average level of attention to matters like returns on capital, margins, market share, and valuation. After all, this isn't really the sort of story where you can expect torrid growth to redeem an incautious "buy" decision.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).