Why Steelcase Stock Is Down Today
The return-to-work push can't happen soon enough for Steelcase (NYSE: SCS). Shares of the office furniture manufacturer traded down 10% as of 12:30 p.m. ET after the company provided a modest outlook for what lies ahead.
The slow road back to normal
Steelcase's core office furniture business was thrown into flux by the pandemic and the recovery has taken longer than investors had hoped. The company earned $0.23 per share in its fiscal fourth quarter ending Feb. 23 on sales of $775.25 million, a mixed result relative to Wall Street's estimate of $0.21 per share on sales of $780.25 million.
Orders grew 4% in the quarter, with 8% growth in the Americas offsetting continued declines internationally. CEO Sara Armbruster said the domestic strength was driven by large corporate customers and reflect a call for "a stronger in-office presence."
Steelcase expects full-year fiscal 2025 earnings of between $0.85 and $1 per share, in line with Wall Street's $0.92-per-share estimate. The company finished the most recent quarter with a backlog of $625 million in future orders, down 8% from the prior year, but said that orders in the first few weeks of its new fiscal year are trending ahead of a year ago.
Is Steelcase a buy on the stock's dip?
It's been less than a year since the plunge in revenue last summer that caused the stock to crater. Steelcase shares were up more than 60% since then heading into earnings, but investors appear concerned they are pricing in a recovery faster than it is playing out.
The good news for patient investors is that demand is on the rise, at least in the Americas. And with Steelcase shares still more than 45% below their pre-pandemic highs there are opportunities for price appreciation from here. But the return-to-work trend is still fragile, and investors should expect a sluggish climb from here.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Steelcase Stock Is Down Today was originally published by The Motley Fool
