SCS - Steelcase stock surges over 10% as pricing actions promote rise in revenue

2023-03-23 08:57:13 ET

Steelcase ( NYSE: SCS ) shares rose sharply on Thursday after topping Q4 earnings expectations and signaling continued positive trends into 2023.

For the fourth quarter, the Michigan-based furniture company nearly doubled EPS expectations on the Street, posting $0.19 in earnings per share against an $0.11 consensus. Meanwhile, a 6.5% jump in revenue to $801.7M came in $50.32M above analyst expectations which had forecast a modest contraction year over year.

Pricing actions were credited for a 330 basis point expansion in operating margin, offsetting an 8% decline in Q4 orders. Still, the quarterly performance marked a more modest decline than the 17% drop marked in Q3 2022 as compared to Q3 2021.

“In the Americas, our fourth quarter orders were stronger than we anticipated and drove revenue and earnings above our expectations,” CEO Sara Armbruster said. “Although our fourth quarter orders were below the prior year, project business from large corporate customers improved sequentially from the third quarter.  We’ve seen opportunity creation in the Americas grow on a year-over-year basis for eight of the last nine months, and in recent months, a notable number of larger companies in the United States have announced workplace strategies that emphasize the importance of an in-office presence.”

Moving forward, the company expects “continued year-over-year earnings improvement” in Q1 and earnings growth throughout the year amid pricing actions and return-to-office trends.

Shares of Steelcase ( SCS ) surged 11.7% shortly before the bell on Thursday.

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