'Lagging' housing market, high interest rates drag on MillerKnoll's sales

By Claudia Assis

MillerKnoll's stock drops nearly 15% after hours

Shares of MillerKnoll Inc. dropped nearly 15% in the extended session Wednesday after the furniture maker said that a "lagging" housing market, rising interest rates and other headwinds contributed to lower sales.

MillerKnoll (MLKN) earned $22 million, or 30 cents a share, in its fiscal third quarter, compared with $400,000, or a penny a share, in the year-ago period.

Adjusted for one-time items, the company earned 45 cents a share. Analysts surveyed by FactSet called for adjusted EPS of 44 cents a share.

"Overall demand patterns across much of our business have continued to be sluggish, driven by elevated interest rates in major markets around the world, ongoing geopolitical concerns and a lagging housing market in the U.S.," the company said in a statement.

Sales dropped 11% to $872 million, from $985 million a year ago. The analysts polled by FactSet expected quarterly sales of $909 million.

The company remains optimistic, however, about its prospects, citing "a range of internal and external indicators which suggest that with more stable economic conditions, growth will resume in a meaningful way."

MillerKnoll has implemented cost-cutting measures, including layoffs and showroom consolidations. Shares fell 14.8% after hours, but have gained 50% in the past 12 months, compared with an advance of around 32% for the S&P 500 index SPX.

-Claudia Assis

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03-27-24 2113ET

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