Steelcase Reports 5% Revenue Growth in Q2 Fiscal 2026 Amid Declining Net Income

Steelcase Inc. reported its financial results for the second quarter of fiscal 2026, revealing a revenue increase of 5% to $897.1 million, compared to $855.8 million in the same period last year. The company's net income for the quarter was $35.0 million, or $0.29 per diluted share, down from $63.1 million, or $0.53 per diluted share, in the prior year. The decline in profitability was attributed to higher operating expenses and restructuring costs, which totaled $11.9 million for the quarter, compared to $2.2 million in the previous year. Operating income also decreased to $53.1 million from $90.0 million year-over-year.

In the first half of fiscal 2026, Steelcase's revenue reached $1.676 billion, a 6% increase from $1.583 billion in the same period last year. However, net income fell to $48.6 million, or $0.41 per diluted share, down from $74.0 million, or $0.62 per diluted share, in the prior year. The company noted that the increase in revenue was driven by strong demand from large corporate customers, particularly in the Americas, which saw a 5% revenue increase. The International segment also contributed to growth, with a 7% increase in revenue, primarily from markets in India, the United Kingdom, and China.

Steelcase is currently undergoing significant strategic changes, including a planned merger with HNI Corporation, announced on August 3, 2025. The merger will involve Steelcase being acquired in a cash and stock transaction, with the completion subject to shareholder and regulatory approvals. This strategic move is expected to enhance Steelcase's market position and operational efficiencies. Additionally, the company is investing in a new enterprise resource planning (ERP) system, with approximately $78 million capitalized as part of the project.

Operationally, Steelcase reported a total employee headcount of 114,727 as of August 29, 2025, reflecting a slight increase from the previous year. The company also noted a rise in customer deposits, which increased to $58.4 million from $43.0 million, indicating a positive outlook for future revenue recognition. However, the company faced challenges with cash flow, reporting a net cash outflow of $82.2 million from operating activities in the first half of the fiscal year, compared to a cash inflow of $49.0 million in the same period last year.

Looking ahead, Steelcase anticipates continued revenue growth driven by strong demand in the Americas and International markets, despite the challenges posed by restructuring costs and market conditions. The company remains focused on optimizing its cost structure and enhancing profitability through strategic initiatives, including the ongoing merger with HNI Corporation.