MillerKnoll (MLKN, Financial) saw its shares rise sharply by 12% following a significant EPS beat for Q4. This marks a strong recovery from a modest beat in Q3, driven by management's optimistic outlook and positive trends like increased office re-entry. Investors are reacting positively to the improved forecast.
- EPS beat was due to better-than-expected sales and a strong gross margin, which improved by 130 basis points to 39.2%. Revenue reached $962 million, an 8.2% increase year-over-year, exceeding guidance mid-point.
- Management credited the positive results to broad-based strength across all segments, a rebound from Q3's macroeconomic challenges.
- The North America Contract segment experienced a 13% increase in sales year-over-year, with new orders up nearly 16%. This growth was driven by demand ahead of an April 21 tariff surcharge and a June 2 price increase. The International Contract segment also saw sales rise by 6.9% and new orders by 3.6% year-over-year.
- Notably, the Q1 (Aug) guidance exceeded analyst expectations, with increased office leasing activity and consistent year-over-year growth in industry orders. Management highlighted several strategies to drive revenue amid the current macroeconomic environment.
Investors were encouraged by the substantial EPS upside and bullish Q1 guidance. The investment community has been looking for signs of a return to work, and this report indicates progress for MLKN. The stock, which had been trading between $16.50 and $17.50, broke above this range following the report, reflecting investor confidence.
