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Feb 26, 2021
Steelcase Q4 2021 Earnings Report
Reported better than expected revenue and earnings per share while navigating multiple supply chain challenges and the resurgence of COVID.
Key Takeaways
Steelcase reported Q4 revenue of $677.1 million and net income of $6.6 million, or diluted earnings of $0.06 per share. Revenue decreased 28 percent compared to the prior year, or 25 percent on an organic basis, as all segments were impacted by economic uncertainty and delays in return-to-office plans.
Delivered better than expected revenue and earnings per share in the fourth quarter.
Navigated multiple supply chain challenges in addition to the resurgence of COVID.
Orders declined 31 percent in the fourth quarter compared to the prior year, driven by broad-based declines in the Americas and EMEA.
Gross margin of 28.4 percent in the fourth quarter represented a 410 basis point decline compared to the prior year.
Steelcase
Steelcase
Forward Guidance
The company expects first quarter fiscal 2022 revenue to be in the range of $540 to $570 million and expects to report a loss per share of between $0.27 to $0.34.
Positive Outlook
- Targeting seasonally higher revenue in the second quarter.
- Targeting net income in the second quarter that would approximately offset the first quarter net loss and includes a $15 million gain from an expected land sale.
- Targeting double-digit revenue growth compared to fiscal 2021 for the second half of fiscal 2022.
- Higher vaccination levels are expected to support workers returning to the office more broadly.
- Increased capital spending and corporate C-suites prioritizing their workplaces as they focus on improving productivity, collaboration, and company culture.
Challenges Ahead
- Supply chain disruptions are expected to result in a delay of some revenue from the first quarter of fiscal 2022 to the second quarter.
- Projected inflation, net of pricing benefits, of approximately $6 million.
- Projected operating expenses of between $190 to $195 million.
- Projected interest expense, net of investment income and other income, net, of approximately $5 million.
- Targeting a decline in the second quarter compared to the prior year which benefited from a strong beginning backlog as a result of the government mandated shutdowns in the first quarter of fiscal 2021.