MW MillerKnoll's stock sinks on outlook, but company says bigger orders signal bigger focus on office space
By Bill Peters
MillerKnoll says that new and existing home sales - which tend to drive furniture sales - 'continue to be soft'
Shares of MillerKnoll Inc. slid after hours on Wednesday after the furniture maker trimmed its full-year profit outlook, citing "slower-than-expected macroeconomic improvements" and a housing market that continues to stay tight.
The drop followed a broader market retreat, after the Federal Reserve indicated that there would be fewer cuts to interest rates next year to accelerate the economy. MillerKnoll sells office and home furniture, and oversees furniture lines such as Herman Miller, Knoll and luxury brand Holly Hunt.
Shares of MillerKnoll (MLKN) fell 9.6% after hours. As of Wednesday's close, the stock is down 8.8% so far this year.
The company said it expected full-fiscal-year adjusted earnings per share of $2.11 to $2.17. That's a bit lower than a forecast given in September, for $2.20.
MillerKnoll said that new and existing home sales - which tend to drive furniture sales - "continue to be soft." They also said the timing of the biggest part of the holiday shopping season, split across its second and third quarters this year, weighed on year-over-year sales comparisons.
During the company's earnings call, management noted a slower trend before the election that reversed afterward. Compared to the years before the pandemic, customers were planning further in advance for bigger construction projects, stretching out order timelines, they said.
Still, they said they expected demand to improve, touting new product launches and design services. And they said that larger projects have increased, as more employers try to bring workers back to offices and plan out their workspaces to accommodate changes in the way people do their jobs.
"I think the conversation ... has really shifted to getting people back in the office, not so much if, but when and how quickly," Chief Executive Andi Owen said during the call.
"I think another encouraging sign for us is to see how much our large projects have increased over the last several quarters, which typically means that people are looking to actually really revitalize their environment, versus just a small area here and there," she said.
MillerKnoll on Wednesday reported fiscal second quarter sales of $970.4 million, above FactSet estimates for $959.6 million. Adjusted earnings per share were 55 cents, above estimates for 53 cents.
The company reported the results as retailers try to prepare for steeper tariffs under President-elect Donald Trump.
Owen on Wednesday said the company could make changes to its product sourcing, stock up on supplies in advance, or make "possible future price adjustments." Other businesses have expressed concern that tariffs could push prices higher for consumers.
-Bill Peters
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December 18, 2024 18:45 ET (23:45 GMT)
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