Herman Miller Q3 Results Top Estimates, Guides Q4 EPS Below View

(RTTNews) - Office furniture maker Herman Miller, Inc (MLHR) reported Wednesday a profit for the third quarter that grew from last year, despite lower operating margins, reflecting double-digit sales growth. Both adjusted earnings per share and quarter net sales topped analysts' expectations.

The company also provided earnings guidance for the fourth quarter, below Street view, while expecting sales in line.

"We continue to be pleased by the overall performance of our Specialty, Consumer and ELA business segments, all of which posted strong organic sales growth and improved profitability this quarter compared to last year. We were, however, disappointed in the momentum of our North American segment, where growth rates have lagged our expectations for the past two quarters," CEO Brian Walker said in a statement.

Zeeland, Michigan-based Herman Miller reported net earnings of $21.0 million or $0.35 per share for the third quarter, higher than $19.4 million or $0.33 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $0.37 per share, compared to $0.34 per share in the year-ago quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 13.3 percent to $516.4 million from $455.9 million in the same quarter last year, and topped three Wall Street analysts' consensus estimate of $515.57 million by a whisker.

On an organic basis, which adjusts for acquisitions, divestitures, and foreign currency translation, sales in the third quarter increased 4.3 percent.

Sales at its key North American segment edged up 0.7 percent to $296.0 million, and sales for EMEA, Latin America, and Asia-Pacific or ELA, was up 0.6 percent to $97.3 million from last year.

Herman Miller's specialty segment sales grew 6.3 percent to $50.5 million, and consumer segment net sales of $72.6 million were up $56.0 million from last year.

Operating margin contracted 30 basis points to 7.2 percent from last year. New orders in the quarter were up 7.9 percent year-over-year to $500.5 million.

Looking ahead to the fourth quarter, Herman Miller expects earnings in a range of $0.39 to $0.43 per share on projected sales between $530 million to $560 million. Street is currently looking for earnings of $0.47 per share on sales of $554.30 million for the quarter.

"We have taken actions to increase selling capacity, fill key product gaps, refresh showrooms, and realign sales leadership to accelerate our growth in the coming quarters. We believe these actions are further supported by what we see as a favorable demand environment for the North American contract industry," Walker added.

MLHR closed Wednesday's regular trading session at $28.88, up $0.13 or 0.45% on a volume of 0.31 million shares.