S&P changes Steelcase view to stable

S&P said it changed its outlook for Steelcase Inc. to stable from negative and affirmed its BB issuer credit rating and the BB issue-level rating on the company's $450 million of 5 1/8% senior unsecured notes due in 2029. The recovery rating remains 3, indicating meaningful (50%-70%; rounded estimate: 65%) recovery in default.

“The ratings affirmation and outlook revision to stable from negative reflects the company's improved profitability and cash flow, industry conditions and a moderated risk of a near-term recession.

“Steelcase remains below pre-pandemic revenue, and volumes declined during the first half of the fiscal year ended February 2024. Still, we think office furniture industry trends are improving. Our economists no longer forecast a recession in the U.S. over the next year, but GDP growth will continue at a slower pace. During the first three weeks in September, the company's orders increased 18% versus a decline of about 20% during the same period in 2022,” S&P said in a press release.

The agency noted “During the first half of fiscal 2024, revenue was about flat and S&P Global Ratings-adjusted EBITDA improved over 34% from the same prior-year period.”

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