Leading workplace furniture companies MillerKnoll and Steelcase reported quarterly earnings just before Christmas.
Both companies focused their messaging on improving margins against a backdrop of, generally speaking, challenged top lines. They also provided some commentary on return-to-office trends.
Steelcase CFO Dave Sylvester commented: “We remain optimistic about the growing number of companies in the US that are emphasizing physical presence in their offices for a minimum number of days per week, as we believe it has positively impacted order levels over the past three quarters in our business.”
The vendor’s CEO Sara Armbruster said orders in the large corporate segment have been “strengthening” in the past year.
“Customers are looking to invest in spaces that solve a host of needs, such as providing places to focus, collaborate, build social connections, and foster well-being,” she noted on the conference call.
There is a belief at the company that many office spaces are not yet configured to support these new ways of working.
Armbruster added that two of the most important factors that are influencing clients’ purchasing decisions are innovation and sustainability, providing some examples of recent product launches by Steelcase.
Sylvester said the momentum at large customers is expected to continue into 2024, while the education vertical—particularly in terms of classroom furniture—is doing well.
Meanwhile, at MillerKnoll, CFO Jeff Schutz said confidence was being bolstered by forward-looking demand indicators, including project funnel activity and a “notable increase” in requests for project pricing and mock-up builds. This was despite year-on-year revenue at the company’s Americas Contract division falling by more than 10 percent in the most recent quarter.
CEO Andi Owen referred to a “lot more momentum around getting people back together”, adding: “I think return-to-office is absolutely picking up.”
One trend that was highlighted was the downsizing of real estate portfolios, with the move into smaller spaces triggering more project work.