SCS - Steelcase posts mixed Q3 report light Q4 sales forecast

Steelcase ( NYSE: SCS ) shares rose sharply in after hours trading despite some mixed earnings results.

The Michigan-based furniture manufacturer posted $0.20 in earnings per share alongside $826.9M in revenue for the fiscal third quarter. Analysts had anticipated $0.18 and $836.43M, respectively. Cost-cutting measures were pursued to improve profitability, with gross margin expanding 120 basis points from the prior year.

"Our gross margin improvement in the Americas this quarter reflected the benefits from the pricing actions we've been implementing in the face of extraordinary inflation levels,” CFO Dave Sylvester said.  “On a global basis, year-over-year pricing benefits have exceeded year-over-year inflation for the last two quarters; however, we estimate cumulative inflation over the last seven quarters exceeds the cumulative benefits from our pricing actions by approximately $60M.  Moving into the fourth quarter and first half of fiscal 2024, we expect continued year-over-year gross margin benefits from our pricing actions, as we aim to recover the cumulative impact of inflation.”

Management expects Q4 revenue in a range between $740M to $765M. Meanwhile, adjusted earnings per share of between $0.11 to $0.15 are anticipated amid pricing actions and cost-saving actions. Consensus estimates stand at $0.12 and $790.33M, respectively.

Shares slipped 7% shortly after the release of the earnings report. However, the stock shot to an over 7% gain as the extended session progressed before moderating gains. As of 4:35 PM ET, shares rose 2.56% .

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