We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
When a management team decides to invest in product development and sale and marketing initiatives it is intended to help overall revenues in the future, but this long term vision at times mutes near term earnings. This is the situation facing our Zacks Bear of the Day, Steelcase Inc. (SCS - Free Report) .
This Zacks Rank #5 (Strong Sell) company is a designer and manufacturer of products used to create high-performance work environments. Its product portfolio includes furniture systems, seating, storage, desks, casegoods, interior architectural products, technology products and related products and services. The company reports two geographic furniture segments: North America and International.
Recent Earnings Results
Management posted Q1 18 earnings on June 21 where they missed both the Zacks consensus earnings and revenue estimates. In their America’s segment, they saw year over year changes in revenues -2.8%, orders -3%, and SG&A as a percentage of sales increased from +24.7% to +26.2%. Management cited “increased investment in product development and sales & marketing” as the cause of the increased costs. In their EMEA (Europe, Middle East and Africa) segment year over year revenues dropped by -9.7%, and posted a normalized operating loss of -$8.6 million.
Management’s Take
According to Jim Keane, president and CEO, “Our industry is changing as customers begin to adopt dramatically different spaces that support new ways of working," said Jim Keane. "We expect to increase our investments in new products and partnerships relevant to their emerging needs. These investments are intended to help us broaden our addressable market and create new growth opportunities for the future. The success of the products we launched in recent years, and the awards and other recognition we earned at the Neocon trade show give us confidence that customers and influencers agree we are on the right track.”
Price and Earnings Consensus Graph
Due to the poor earnings report, not so strong guidance, and increased expenses the stock price and future earnings estimates have both declined.
After the disappointing Q1 results, earnings estimates for Q2 18, Q3 18, FY 18 and FY 19 all saw reductions; Q2 18 dropped from $0.38 to $0.23, Q3 18 fell from $0.34 to $0.27, FY 18 declined from $1.22 to $0.95, and FY 19 was trimmed from $1.37 to $1.10.
Bottom Line
While management’s plans to improve their line of products looks as it will pay off in the long term; the short term out-look for the company is choppy at best.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bear of the Day: Steelcase Inc. (SCS)
When a management team decides to invest in product development and sale and marketing initiatives it is intended to help overall revenues in the future, but this long term vision at times mutes near term earnings. This is the situation facing our Zacks Bear of the Day, Steelcase Inc. (SCS - Free Report) .
This Zacks Rank #5 (Strong Sell) company is a designer and manufacturer of products used to create high-performance work environments. Its product portfolio includes furniture systems, seating, storage, desks, casegoods, interior architectural products, technology products and related products and services. The company reports two geographic furniture segments: North America and International.
Recent Earnings Results
Management posted Q1 18 earnings on June 21 where they missed both the Zacks consensus earnings and revenue estimates. In their America’s segment, they saw year over year changes in revenues -2.8%, orders -3%, and SG&A as a percentage of sales increased from +24.7% to +26.2%. Management cited “increased investment in product development and sales & marketing” as the cause of the increased costs. In their EMEA (Europe, Middle East and Africa) segment year over year revenues dropped by -9.7%, and posted a normalized operating loss of -$8.6 million.
Management’s Take
According to Jim Keane, president and CEO, “Our industry is changing as customers begin to adopt dramatically different spaces that support new ways of working," said Jim Keane. "We expect to increase our investments in new products and partnerships relevant to their emerging needs. These investments are intended to help us broaden our addressable market and create new growth opportunities for the future. The success of the products we launched in recent years, and the awards and other recognition we earned at the Neocon trade show give us confidence that customers and influencers agree we are on the right track.”
Price and Earnings Consensus Graph
Due to the poor earnings report, not so strong guidance, and increased expenses the stock price and future earnings estimates have both declined.
Steelcase Inc. Price and Consensus
Steelcase Inc. Price and Consensus | Steelcase Inc. Quote
Declining Earnings Estimates
After the disappointing Q1 results, earnings estimates for Q2 18, Q3 18, FY 18 and FY 19 all saw reductions; Q2 18 dropped from $0.38 to $0.23, Q3 18 fell from $0.34 to $0.27, FY 18 declined from $1.22 to $0.95, and FY 19 was trimmed from $1.37 to $1.10.
Bottom Line
While management’s plans to improve their line of products looks as it will pay off in the long term; the short term out-look for the company is choppy at best.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>