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GRAND RAPIDS, MI – Office and contract furniture giant Steelcase reported third-quarter sales of $777.9 million, down 6% from the same period last year. As a result, the company’s stock fell 8.9% this morning.
Sales fell 5% in the Americas and 7% internationally, which the company said was “lower than expected” and attributed to a lower order backlog at the beginning of the third quarter. However, orders for the quarter were up 15% year-over-year, with a 16% increase on the American side and a 10% increase internationally. Orders in the Americas fell 7% last quarter.
Steelcase said order growth in the Americas was driven by large enterprise customers in both continuing and new business, while international growth was driven by Asia Pacific.
“Contrary to our expectations, orders this quarter remained relatively stable on a sequential basis, reflecting strong year-over-year growth,” said Sarah Armbruster, president and CEO. Ta. “Our 16% year-over-year growth in the Americas was driven by our large enterprise customers. I believe it represents strength.”
Operating income for the third quarter was $43.8 million, an increase of $23.3 million compared to the same period last year. The period included a $9.5 million gain from the reduction in the valuation of acquisition proceeds debt ($4.7 million recorded in the Americas and $4.8 million internationally) and a $5.4 million gain on the sale of U.S. land and other fixed assets. contained. America continent.
Gross profit margin was 32.4%, an increase of 360 points. The increase was due to higher prices and operational improvements, partially offset by lower volumes.
“Our third quarter earnings per share benefited from approximately 10 cents related to the release of accrued earnings debt and gains on sales of fixed assets, which was an increase from the $10 million that we had anticipated. 6 cents higher than the impact we expected in the third quarter based on earnings from the sale of fixed assets,” said Dave Sylvester, senior vice president and CFO. “Excluding the impact of these items, our third quarter results were in line with our expectations as the impact of lower-than-expected revenue was offset by better gross margins and lower operating expenses. ”
The company expects fourth-quarter sales to be between $765 million and $790 million, down 1% to 5% from $801 million in last year’s fourth quarter. The current backlog is $699 million, down 10% from last year.
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