Steelcase Inc (NYSE:SCS) stock fell 2.45% (As on June 26, 11:24:24 AM UTC-4, Source: Google Finance) after the company reported better-than-expected first quarter results, but the office furniture maker’s second quarter guidance fell short of analyst estimates. Revenue in the Americas segment, Steelcase’s largest market, increased 9% organically to $603.6 million. The International segment saw a 1% organic decline to $175.4 million. Gross margin improved 170 basis points YoY to 33.9%, driven by higher volume in the Americas and benefits from cost reduction initiatives. This was partially offset by approximately $7 million in higher tariff costs. The Americas growth was driven by a higher beginning backlog compared to the prior year and included strong growth from large corporate, government and healthcare customers. The International decline was driven by Germany and France, mostly offset by growth in India, the UK and China.

Further, Orders (adjusted for currency translation effects) declined modestly in the first quarter compared to the prior year and included a 1 percent decline in the Americas and 1 percent growth in International. The Americas reflected growth from large corporate customers offset by declines from government and education customers. In the prior year, the Americas posted 10 percent growth compared to the first quarter of fiscal 2024. In International, strong growth in India, China and Central Europe was mostly offset by declines in Germany and France.  Adjusted operating income of $39.0 million in the first quarter represented an increase of $10.8 million compared to the prior year, including an improvement of $14.3 million in the Americas, primarily driven by higher revenue, and a $3.5 million decline in International, primarily driven by a lower mix of small-to-medium sized business in Germany and France. Total liquidity, which is comprised of cash and cash equivalents, short-term investments and the cash surrender value of company-owned life insurance, aggregated to $391.5 million at the end of the first quarter and represented an increase of $13.7 million compared to the prior year. Total debt was $447.3 million. Trailing four quarter adjusted EBITDA was $265.8 million, or 8.3 percent of revenue.

SCS in the first quarter of FY25 has reported the adjusted earnings per share of 20 cents, beating the analysts’ estimates for the adjusted earnings per share of 14 cents. The company had reported the adjusted revenue growth of 7 percent to $779 million in the first quarter of FY25, beating the analysts’ estimates for revenue of $762.35 million.

The company projects second quarter adjusted earnings of $0.36 to $0.40 per share, below the $0.41 analysts were anticipating. For the second quarter, Steelcase expects revenue of $860 million to $890 million, representing flat to 4% growth compared to the prior year.