Herman Miller, Inc.(NASDAQ: MLHR) stock fell over 1.2% in the after-hours session on December 20th, 2017. The group’s gross margins were under pressure during the second quarter of fiscal 2018, which fell to 36.7%, a decline of 100 basis point against the prior corresponding period. The weakness is mainly on the back of rising levels of price discounting, product mix, and a continuation of capacity imbalances.
On the other hand, the group’s Net sales enhanced 4.7% yoy to $604.6 million during the quarter while new orders rose 9.3% yoy to $629.4 million. The group’s net earnings reached $0.55 per share on a diluted basis during the period from a diluted earnings per share of $0.53 in the prior corresponding period.
They witnessed solid demand of orders which were at an all-time record level and rose 10% organically against the prior corresponding period. The group’s strategic efforts paid off which was shown in their first-half momentum while the group is addressing the shifting needs of the market. The group made specific initiatives within their Consumer business and are forecasted to gain traction toward the end of this fiscal year and into the first half of fiscal 2019. Herman Miller has a cash and cash equivalents of $114.6 million as of second quarter which improved by $18.4 million against the end of the fiscal 2017. The cash flow generated from operations in the second quarter was $62.6 million against $64.1 million in the same quarter last fiscal year.
For the third Quarter of Fiscal 2018, the group forecasts net sales to be in the range of $565 million to $585 million. On an organic basis, adjusted for the impact of dealer divestitures and foreign currency translation, this is a sales rise of 9% at the mid-point of the range against pcp. The group forecasts their diluted earnings per share to a range of $0.46 to $0.50. In case the recent proposed tax changes are signed into law before this year, the group forecasts its full fiscal year 2018 effective tax rate to fall to the range of 26% to 28%, excluding any one-time adjustments required by the new bill.
Herman Miller stock rose over 18.7% in the last six months (as of December 20th, 2017; Source: Google finance)