Published in Manufacturing

Herman Miller, Steelcase post mixed quarterly results

BY Friday, December 20, 2019 01:13pm

The two largest office furniture companies in West Michigan posted mixed results in their most recent quarters. 

Zeeland-based Herman Miller Inc. (Nasdaq: MLHR) said it generated net sales of $674.2 million for the three-month period that ended Nov. 30, up 3.3 percent from the same period a year earlier. 

The company reported net income of $78.6 million, or $1.32 per diluted share, which compares to net income of $48.2 million, or $0.81 per diluted share, in the same period a year ago. 

That performance fell short of company expectations that were set going into the quarter, driven by “softer-than-anticipated” orders, according to Herman Miller President and CEO Andi Owen.

New orders in the second quarter of Herman Miller’s current 2020 fiscal year hit $674.9 million, down 4.2 percent from the prior-year level. The comparison was further challenged by Herman Miller’s record orders in the previous year.

“While we’re never happy to deliver growth rates below the goals we set, our view of the business and our near-term opportunities remains bullish,” Owen said.

Owen cited “mixed macroeconomic and geopolitical” issues, including U.S.-China trade tensions and Brexit, as affecting project activity. On the positive side, Herman Miller received a favorable trade exclusion from the Office of the U.S. Trade Representative, which resulted in a refund of tariffs paid over the previous 12 months. 

In its current third quarter, Herman Miller expects net sales ranging from $672 million to $692 million.

“Our sales force is optimistic, given the number of new business opportunities they see on the horizon,” Owen said, adding that job growth, unemployment levels and consumer spending remain strong.

Meanwhile, Grand Rapids-based Steelcase Inc. (NYSE: SCS) generated higher sales of $955.2 million in the third quarter of its current 2020 fiscal year, a 6-percent increase. 

The company reported quarterly net income of $54.9 million, or $0.46 per diluted share, which compares to net income of $37.3 million, or $0.31 per diluted share, in the same period a year ago. 

The growth was driven by sales Steelcase’s Americas division, which were up 8 percent compared to the prior year. 

Steelcase out-performed estimates based on the timing of shipments and of the Thanksgiving holiday, according to President and CEO Jim Keane.

In contrast to Herman Miller, orders at Steelcase grew 4 percent on a year-over-year basis.

Looking ahead, Steelcase expects revenue in its present fourth quarter of $905 million and $930 million, reflecting a slight organic decline. 

“Our win rates remain stable and our pipeline for the next couple of quarters shows continued opportunity for growth,” Keane said.

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