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Omar Venerio
Omar Venerio
Articles (1709) 

Thursday Morning Market Highlights

Markets in the red, shares of Herman Miller jumps on earnings results

US Markets

U.S. stocks were in the red on Thursday after the Fed's decision to maintain near-zero interest rates to 2023. In the week of Sept. 6 to Sept. 11, 860,000 workers filed unemployment claims in the latest period. The Dow declined 0.36% to 27,922, the S&P 500 index fell 0.81% to 3,357 and the Nasdaq Composite Index was down 1.42%, to 10,892.

Gainers

• Eastman Kodak (NYSE:KODK) +6.1%

• Kohl's Corporation (NYSE:KSS) +0.9%

• BorgWarner Inc. (NYSE:BWA) +0.5%

• Wynn Resorts, Limited (NASDAQ:WYNN) +0.2%

Losers

• Host Hotels & Resorts, Inc. (NYSE:HST) -3.4%

• Tesla, Inc (NASDAQ:TSLA) -2.5%

• Under Armour, Inc. (NYSE:UA) -1.4%

• FedEx Corporation (NYSE:FDX) -1.0%

Global Markets

The main European stock markets traded in the red. The UK's FTSE 100 lost 0.27%, France's CAC 40 fell 0.61%, Germany's Dax was down 0.50% and Spain's Ibex 35 retreated 0.50%.

In Asia, Japan's Nikkei 225 fell 0.67%, India's BSE Sensex retreated 0.82%, Hong Kong's Hang Seng fell 1.56% and China's Shanghai Composite was down 0.41%.

Herman Miller releases earnings report

Shares of Herman Miller, Inc. (NASDAQ:MLHR) gained 29% on Thursday morning after the company announced its fiscal first-quarter 2021 results the previous day. It posted earnings per share of $1.24, beating analysts' estimates by 95 cents. Revenue of $626.8 million declined 6.6% year-over-year and also beat expectations by $97.75 million.

CEO Andi Owen had the following to say:

"Our diversified business model coupled with our ability to act quickly and decisively to manage the business drove strong operating performance for the quarter, once again proving our ability to deliver profitable results even in these difficult times. Our strong performance this quarter validates our strategy, as our multi-channel go-to-market approach enabled us to serve customers where, and how, they needed to be served. The investments we have made in people, technology, and products positioned us to capitalize on emerging opportunities as the needs of our customers quickly evolved due to the onset of the COVID-19 crisis."

In the quarter, the consolidated net sales declined 7% compared to last year, which excludes the impacts of acquisitions and foreign currency translation. Orders were down 18% compared to the prior year on a reported basis. The retail business had orders up 40% over last year, driven by the Home Office category, which increased demand by 300% over last year.

In the International segment, demand was higher in markets such as Asia-Pacific and Europe. Orders were up 26% on a reported basis.

Moreover, the gross margin was 39.9%, up 320 basis points higher than last year, reflected strong channel and product mix and high productivity. The operating margin was 15.2%, up from 9.0% reported in the same quarter last year

August 29,2020

August 31,2019

Net Sales

626,8

100%

670,9

100%

Cost of Sales

376,8

60,10%

424,8

63,3%

Gross Margin

250

39,90%

246,1

36,7%

Operating Expenses

155,8

24,90%

184,2

27,5%

Restructuring Expenses

-1,2

-0,20%

1,8

0,3%

Operating Earnings

95,4

15,20%

60,1

9,0%

Other Expenses, net

1,6

0,30%

2,1

0,3%

Earning Before Income Taxes and Equity Income

93,8

15,00%

58

8,6%

Income Tax Expense

20,6

3,30%

12,2

1,8%

Equity Income, net of tax

0,2

0,00%

2,2

0,3%

Net Earnings

73,4

11,70%

48

7,2%

Joel Greenblatt (Trades, Portfolio) cut his investment in the stock by 26% to 55,811 shares during the second quarter of the calendar year. Barrow, Hanley, Mewhinney & Strauss reduced 12% its holdings for a remaining 49,440 shares.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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