MillerKnoll has reported a decline in sales for the latest quarter, citing weaker demand. However, the company’s profit has seen an increase due to its pricing initiatives.
Financial Results
In the third quarter, MillerKnoll achieved a net profit of $33.5 million, or 45 cents per share. This is notably higher than the $16 million, or 21 cents per share, it earned during the same period last year. Analysts surveyed by FactSet had predicted earnings of 47 cents per share.
After excluding one-time items, the company’s earnings per share amounted to 59 cents, surpassing management’s expectations of a range between 52 cents and 58 cents.
Unfortunately, sales dropped by 11% to reach $949.5 million, missing analysts’ projected figure of $971.5 million as reported by FactSet. In September, MillerKnoll had predicted sales ranging from $950 million to $990 million.
Positive Gross Margin Improvement
Despite the decline in sales, MillerKnoll’s gross margin improved significantly. It saw a 470 basis point increase to reach 39.2%. This improvement can be attributed to effective inventory management, moderating input costs, and higher prices.
Outlook and Challenges
While business confidence has rebounded from recent lows, MillerKnoll acknowledges that challenges to their demand persist. The elevated cost of capital and geopolitical concerns are contributing factors to these challenges.
