Steelcase Finally Turns Corner

June 22, 2004
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GRAND RAPIDS — In a sign that the recovery in the office furniture industry is taking hold, Steelcase Inc. today reported a solid quarterly sales gain, the company’s first in more than three years.

Steelcase reported revenues of $597.7 million for the first quarter that ended May 28, up 7.6 percent from the $555.6 million in the same quarter a year earlier and up 6.1 percent sequentially from the previous fourth quarter.

The sales growth was in line with company estimates and represents the first year-to-year quarterly increase in 13 quarters.

“Our industry is now starting to feel the effects of the positive turn in the economy. Strong job growth during the past quarter should bode well for our business,” Steelcase President and CEO Jim Hackett said. “We look forward to growth in revenues and improvements in profitability that reflect the hard work the people of Steelcase have done over the last three years.”

On the bottom line, the company this morning reported a net loss of $5.7 million, or 4 cents per share, which includes net, after-tax restructuring charges of $3.6 million.

The quarterly performance was better than the net loss of 9 cents to 14 cents per share the company provided brokerage analysts in earlier guidance, and compares with a net loss of $13.million, or 9 cents per share, in the same quarter a year ago.

In the present second quarter of the 2005 fiscal year, Steelcase expects stronger order patterns and believes the industry in North America is strengthening. The company expects sales to grow 5 percent to 8 percent from the $612.1 million in the second quarter a year ago and to break even or record a loss 5 cents per share, which will include a $3 million to $7 million restructuring charge.

Further evidence of the office furniture industry’s recovery comes Wednesday when Herman Miller Inc. reports its latest quarterly sales and earnings.           

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