NASDAQ$MLKN

Millerknoll Inc · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Reported second quarter fiscal 2021 results, retail and international momentum helped offset near-term demand pressures in North America contract, gross margin increased, and operating expenses were controlled.

Herman Miller's Q2 2021 financial results validated the company's strategic direction amidst global economic uncertainty. Consolidated net sales were down 7% compared to last year, and orders were down 7% on a reported basis. The Retail business continued to deliver strong results, with quarterly orders up 41% over last year.

  • Retail and International momentum helps offset near-term demand pressures in North America Contract
  • Gross margin of 39.0% reflects an increase of 110 basis points from last year
  • Strong expense control with operating expenses down $18.1 million from last year
  • Continued quarterly operating margin expansion over the prior year, including Retail operating margin of 16.7%

Headline financials

Total Revenue

$626M

Previous: $674M-7.1%
EPS (adj)

$0.89

Previous: $0.88+1.1%
Gross Margin

39.0%

Previous: 37.9%+2.9%
Adjusted Operating Margin

11.7%

Previous: 10.1%+15.8%
Backlog

$403M

No prior period
Capital Expenditures

-$24.4M

Previous: -$38.6M+36.8%
Free Cash Flow

$26.9M

Previous: $40M-32.8%
Net Income

$51.3M

Previous: $78.6M-34.7%
Operating Income

$71M

Previous: $62.4M+13.8%
Gross Profit

$244M

Previous: $256M-4.4%
Cash & Equivalents

$378M

Previous: $177M+113.5%
Total Assets

$2.03B

Previous: $1.88B+8.0%
Stock-Based Comp

$2.4M

Previous: $2.8M-14.3%

Revenue & EPS history

MillerKnoll · Revenue · Quarterly

$626M

Q2 2021-7.1%vs Q2 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

MillerKnoll · $491M total across 2 segments · Q2 2021

  • North America Contract
    $323M
  • International Contract
    $168M

Forward guidance

The overall global demand environment remains uncertain due to the ongoing pandemic, and the company is continuing to suspend quarterly sales and earnings guidance.

Tailwinds

  • Global progress relative to COVID-19 vaccines, which we believe will help release pent-up demand for office spaces.
  • Organizations will make decisions about investments in their workplaces in the coming months, as they begin planning for employees to return to their offices.
  • Retail strategic initiatives, including new store roll-outs, product assortment expansion, gaming, and a range of digital initiatives position our Retail segment for continued growth.
  • The company is encouraged by the sustained momentum experienced over the past two quarters.
  • The company expects to see many organizations make decisions about investments in their workplaces in the coming months, as they begin planning for employees to return to their offices.

Headwinds

  • The overall global demand environment remains uncertain due to the ongoing pandemic.
  • Historically, the third quarter of our fiscal year has reflected sequentially lower sales levels from the second quarter by approximately 5% to 6% due to a seasonal slowdown in activity during the holiday period in the Contract business.
  • This seasonal impact typically results in lower gross margins during the quarter due to less production leverage from our manufacturing facilities.
  • Temporary cost savings in fiscal 2021 of approximately $50 million to $60 million will be largely re-established in fiscal 2022.
  • The magnitude and timing of demand remains dependent on vaccine distribution and ongoing pandemic recovery efforts.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 18 quarterly earnings reports · overlaid with Q2 2021

Historical avgQ2 2021

+0.6%

Avg return

Earnings day

-0.3%

Avg return

5 days after

+2.4%

Avg return

30 days after

45%

26 / 58 earnings

Positive

+38.9%

Q1 2021

Best reaction

-23.0%

Q3 2026

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2026
Q3 2026-23.0%-8.8%
Q2 2026+7.7%+3.0%+10.1%
Q1 2026-11.0%-6.3%-8.3%
Q4 2025-0.3%-2.1%+7.7%
Q3 2025+10.7%+4.7%-10.4%
Q2 2025-9.1%-12.7%-13.6%
Q1 2025-15.1%-10.9%-8.8%
Q4 2024+3.0%+3.2%+16.4%
Q3 2024-17.4%-12.8%-14.2%
Q2 2024-2.9%-3.3%-12.1%
Q1 2024+24.1%+23.8%+16.4%
Q4 2023+9.8%+6.1%+26.2%
Q3 2023-5.2%-2.0%-16.7%
Q2 2023+14.8%+16.4%+24.1%
Q1 2023-11.3%-11.2%+8.9%
Q4 2022-7.5%-7.0%+6.0%
Q3 2022+10.7%+9.8%+5.2%
Q2 2022-5.3%-10.3%-6.2%
Q1 2022-4.4%-1.1%-1.2%
Q4 2021-7.6%-3.5%-11.3%
Q3 2021-0.2%-0.6%+6.5%
Q2 2021-12.7%-16.1%-11.6%
Q1 2021+38.9%+27.7%+33.8%
Q4 2020-4.8%-10.0%-4.3%
Q3 2020+5.2%+16.6%+21.7%
Q2 2020-9.5%-10.1%-13.3%
Q1 2020+1.3%+3.2%+2.7%
Q4 2019+18.8%+18.5%+23.1%
Q3 2019-0.4%-3.5%+5.3%
Q2 2019-0.9%-5.1%+12.1%
Q1 2019+7.4%+3.9%-9.7%
Q4 2018+12.4%+13.0%+11.9%
Q3 2018-14.1%-17.5%-14.9%
Q2 2018+7.2%+5.7%+13.0%
Q1 2018-3.3%-2.1%+2.3%
Q4 2017+9.3%+10.0%+10.6%
Q3 2017+8.0%+6.3%+9.4%
Q2 2017-4.2%-5.4%-13.5%
Q1 2017-4.8%-9.2%-12.5%
Q4 2016+3.2%-10.7%+3.3%
Q3 2016+8.3%
Q2 2016+1.9%
Q1 2016+3.6%
Q4 2015+1.8%
Q3 2015+0.7%
Q2 2015-0.5%
Q1 2015+2.5%
Q4 2014-5.0%
Q3 2014+9.4%
Q2 2014-1.4%
Q1 2014+3.8%
Q4 2013-2.0%
Q4 2012+9.1%
Q4 2009-6.1%
Q3 2011-1.4%
Q2 2011-3.4%
Q4 2010-0.7%
Q1 2011-0.7%

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