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Nov 28, 2020
MillerKnoll Q2 2021 Earnings Report
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.
Key Takeaways
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%
MillerKnoll
MillerKnoll
MillerKnoll Revenue by Segment
Revenue by Segment
N. America Contract Revenue
CapyFin.comInternational Contract Revenue
CapyFin.com 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.
Positive Outlook
- 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.
Challenges Ahead
- 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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income