Published in Breaking News

North American, niche markets boost Herman Miller

BY Friday, June 24, 2016 02:41pm

ZEELAND — A combination of a rebounding North American market and robust performance from niche categories led to a strong finish for Herman Miller Inc.’s 2016 fiscal year.

The Zeeland-based Herman Miller (Nasdaq: MLHR) closed its fourth quarter that ended May 28 with sales of $582.6 million, an increase of nearly 6 percent compared to the same quarter in the prior fiscal year, according to a statement. Adjusted earnings also increased to 56 cents per share in Herman Miller’s fourth quarter, compared to adjusted earnings of 47 cents per share in the previous year.

Meanwhile, a “significant turnaround” in the North American market drove the office furniture manufacturer’s fiscal year 2016 as a whole, President and CEO Brian Walker said in a conference call with brokerage analysts.

“Notable strength” in Herman Miller’s health care and commercial office markets also drove growth, Walker added.

“In particular, we had one of our best years in health care in recent memory,” he said.

The company generated net sales of $2.26 billion to close its 2016 fiscal year, modestly outpacing financial analysts’ expectations of $2.25 billion. The company’s sales in the 2016 fiscal year represent a 5.7-percent increase over the previous year.

While Herman Miller outpaced analysts’ expectations for its fourth quarter of 2016, the company’s consumer segment — which includes retailer Design Within Reach — dropped 2 percent in sales to $78 million as a result of inventories and accounts receivables.

“From a broad view, certainly the profitability we saw in the fourth quarter was not only disappointing, it’s just unacceptable — we can’t be there for long,” Walker said.

It’s likely that Herman Miller will see favorable earnings in following quarters as new orders jumped to approximately $606 million, up nearly 9 percent compared to last year.

Herman Miller executives said they expect the company to generate between $600 million and $620 million in sales in its first quarter of its 2017 fiscal year, a 6-percent to 10-percent increase compared to the same period in the 2016 fiscal year.

However, financial analysts predict Herman Miller will incur a softer quarter, with sales reaching approximately $590 million, according to a consensus estimate on Yahoo Finance.

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