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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

<div><div><div><ul style="list-style-type: disc;"><li><p>MillerKnoll earnings sparked a second week of outperformance for the commercial/contract furniture stocks, which rose ~8% in a week when broader indices were roughly flat.</p></li><li>MLKN reported adjusted EPS of $0.37 in 1QFY24, above consensus of $0.21 consensus, and upped guidance.</li><li>Shares jumped 27% on Wednesday. All three major US firms in the sector advanced last week.</li></ul></div></div></div>

MillerKnoll earnings sparked a second week of outperformance for the commercial/contract furniture stocks, which rose ~8% in a week when broader indices were roughly flat.MLKN reported adjusted EPS of $0.37 in 1QFY24, above consensus of $0.21 consensus, and upped guidance.Shares jumped 27% on Wednesday. All three major US firms in the sector advanced last week.

Furniture/Furnishings Weekly  - MLKN Results Boost Sector; Consumer Confidence Dips

Thematic (Sector/Industry)

<ul style="list-style-type: disc;"><li><p>In a week when the broad market indexes retreated by ~3%, the positive earnings report from Steelcase, Inc. (SCS) provided a boost for all the Commercial/Contract Furniture issues.</p></li><li><p>SCS results supported a view that demand in the office furniture sector had troughed.</p></li><li><p>CFO Dave Sylvester noted that the weekly pace of orders in its Americas segment was steady through its fiscal 2Q and into 3Q and that the Y/Y order comparison for the first few weeks of September was up by ~18%. For details, see our update note from September 22.</p></li></ul>

In a week when the broad market indexes retreated by ~3%, the positive earnings report from Steelcase, Inc. (SCS) provided a boost for all the Commercial/Contract Furniture issues.SCS results supported a view that demand in the office furniture sector had troughed.CFO Dave Sylvester noted that the weekly pace of orders in its Americas segment was steady through its fiscal 2Q and into 3Q and that the Y/Y order comparison for the first few weeks of September was up by ~18%. For details, see our update note from September 22.

Furniture/Furnishings Weekly - SCS Results Boost Commercial/Contract Furniture Sector

<ul><li>This note follows up on the Steelcase 1QFY24 earnings release, management’s earnings conference call, and our earnings analysis note from June 22.</li><li>Herein, we refresh our estimates for Steelcase.</li><li>Steelcase has been tied to the fortunes of commercial/contract furniture, where the company is a global leader. </li></ul>

This note follows up on the Steelcase 1QFY24 earnings release, management’s earnings conference call, and our earnings analysis note from June 22.Herein, we refresh our estimates for Steelcase.Steelcase has been tied to the fortunes of commercial/contract furniture, where the company is a global leader. 

<ul><li>After market close on June 21, Steelcase reported 1QFY24 GAAP EPS of $0.01 and non-GAAP (adjusted) EPS of $0.09, beating consensus of $0.01 and our $0.03 estimate (both adjusted).</li><li>Adjusted EPS excluded $0.05 of restructuring and $0.03 in purchased intangible amortization.</li><li>Reported consolidated 1QFY24 revenue of $751.9 million was also better than consensus of $719 million and our $715 million estimate.</li></ul>

After market close on June 21, Steelcase reported 1QFY24 GAAP EPS of $0.01 and non-GAAP (adjusted) EPS of $0.09, beating consensus of $0.01 and our $0.03 estimate (both adjusted).Adjusted EPS excluded $0.05 of restructuring and $0.03 in purchased intangible amortization.Reported consolidated 1QFY24 revenue of $751.9 million was also better than consensus of $719 million and our $715 million estimate.

STEELCASE, INC. - 1QFY24 Earnings Ahead of Estimates

<ul><li>Office furniture manufacturers assembled in Chicago this week for an annual trade show.</li><li>NeoCon®, the legacy name of the show, is a registered trademark of Merchandise Mart Properties, Inc</li><li>It pertains only to Mart tenants. Several major players moved away from the Mart to Fulton Market and renamed their show Design Days.</li></ul>

Office furniture manufacturers assembled in Chicago this week for an annual trade show.NeoCon®, the legacy name of the show, is a registered trademark of Merchandise Mart Properties, IncIt pertains only to Mart tenants. Several major players moved away from the Mart to Fulton Market and renamed their show Design Days.

NeoCon/Design Days : Office Manufacturers Display Wares Amid Macro Uncertainty

United States

Steelcase Inc. designs and manufactures products used to create high performance work environments.  The Company's products include office furniture, furniture systems, interior architectural products, technology products, seating, and related products and services.  Steelcase has operations in various countries.

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Steelcase Inc Cl A (SCS US)

Furniture/Furnishings Weekly - MLKN Results Boost Sector; Consumer Confidence Dips

MillerKnoll earnings sparked a second week of outperformance for the commercial/contract furniture stocks, which rose ~8% in a week when broader...

Water Tower Research

Furniture/Furnishings Weekly - SCS Results Boost Commercial/Contract Furniture Sector

In a week when the broad market indexes retreated by ~3%, the positive earnings report from Steelcase, Inc. (SCS) provided a boost for all the...

Water Tower Research

Update Note – Steelcase, Inc. (SCS)

This note follows up on the Steelcase 1QFY24 earnings release, management’s earnings conference call, and our earnings analysis note from June 22.

Water Tower Research

STEELCASE, INC. - 1QFY24 Earnings Ahead of Estimates

After market close on June 21, Steelcase reported 1QFY24 GAAP EPS of $0.01 and non-GAAP (adjusted) EPS of $0.09, beating consensus of $0.01 and our...

Water Tower Research

NeoCon/Design Days : Office Manufacturers Display Wares Amid Macro Uncertainty

Office furniture manufacturers assembled in Chicago this week for an annual trade show. NeoCon®, the legacy name of the show, is a registered...

Water Tower Research

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