Courtesy Herman Miller
stock was slumping Monday evening despite reporting better-than-expected earnings.
The American office furniture and equipment company reported adjusted earnings of 56 cents a share on sales of $621.5 million for its fiscal fourth quarter ended May 29, exceeding consensus estimates for 39 cents per share and forecasts for $583 million.
In a note to shareholders, Chief Executive Officer
Andi Owen
and Chief Financial Officer
Jeff Stutz
noted that in the company’s retail division, sales of home-office and workplace-related products remain strong, posting a year-over-year increase of 213%. Additionally, sales through digital channels were up 158% compared with last year. The retail division, which altogether posted revenue growth of 81% over last year, also posted its highest-ever monthly sales in May.
While revenue from North America was down 4.2% compared with the same period last year, the Asia-Pacific region and EMEA regions posted 39% and 69% year-over-year sales growth respectively, benefiting from an early recovery and return to the office. As a whole, net sales were up 27.9% over the prior year’s fourth quarter on a currency-neutral basis. Herman Miller’s gross margins increased by 1.1 percentage point to 36% which translated into a 7% adjusted operating margin.
Looking ahead, Herman Miller (MLHR) executives stated that as the pandemic subsides, they have increased clarity relative to business expectations moving forward. They offered revenue guidance of between $640 million and $670 million for the first quarter of 2022, representing a 3% to 8% premium over current revenue, while projecting earnings of 52 cents to 58 cents, below forecasts for 62 cents.
That probably explains why shares of Herman Miller—a Barron’s stock pick—were down 3%, at $46.50 after hours on Monday. That, and the fact that the stock is up 44.9% in 2021 compared with the S&P500’s 15.9%.
High expectations can be hard to meet.
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