ZEELAND, Mich. – Contract furniture manufacturer MillerKnoll reported $949.5 million in second quarter sales, a decrease of 11% from last year.
The company attributed the decline to a lower beginning backlog, partially offset by faster fulfillment. Orders in the quarter reached $944 million – 6.8% lower than last year – but improved sequentially, the company said, as it moved through the period.
“Business confidence has rebounded from recent lows, yet challenges to demand persist due to the elevated cost of capital and geopolitical concerns,” the company wrote in an earnings report. “Despite these hurdles, our business exhibits encouraging signs, as reflected in heightened project funnel activity, improving order comparisons and strong seasonal demand within the retail segment.”
Despite the declines, executives considered the quarter strong, citing a 28.3% year-over-year increase in adjusted earnings per share. This was done by focusing on what the company can control, it said.
“This success was driven by our strategic inventory management and pricing initiatives, product and regional mix optimization, moderating input costs and the ongoing benefit of acquisition-related synergies, which include efficiency enhancements in operations and logistics. Additionally, we are diligently managing our operating expenses, providing a valuable offset to the existing demand pressures.”
Gross margin in the quarter was 39.2%, 470 basis points higher than the same period last year. This is the company’s fourth consecutive quarter of consolidated gross margin expansion.
In Americas Contract, sales fell 10.1% from last year but improved as the quarter progressed, the company said, reaching growth in November. In International, sales fell 8.9%. In Global Retail, sales fell 14.7%, with the company citing decreased demand and soft housing-related conditions.
Outlook was positive for 2024, with the company increasing its guidance.
“We remain confident in the strategic advantages of diversifying our business, pursuing international expansion, making technology investments to enhance the customer and dealer experience, streamlining processes and continuing to deliver innovative solutions,” said CEO Andi Owen.