ZEELAND — Global furniture maker MillerKnoll Inc. has encountered increased demand in its contract and residential business segments, fighting through market pressures to deliver on the influx of orders.
The Zeeland-based manufacturer’s third-quarter results for the 2022 fiscal year revealed $1.1 billion in orders during the quarter, which was up 93.6 percent compared to the prior year and 31.5 percent organically, not factoring in the increase from the merging of Herman Miller and Knoll that closed in July of 2021.
Companywide sales for the quarter came in at $1 billion, which signified a 20.3-percent organic increase from last year’s third quarter sales totals. Meanwhile, adjusted earnings per share dropped 57 percent, from 65 cents per diluted share in Q3 2021 to 28 cents per diluted share.
“The quarter saw many parts of the world shift their focus to emerging from the pandemic,” the company said in its earnings announcement. “Contract clients are activating their long-awaited return to office plans. As employers consider their spaces, we are seeing a push toward investing in the workplace to create premium spaces and differentiated employee experiences.”
MillerKnoll’s international contract segment experienced a 25.9-percent sales increase while orders shot up 70 percent. With international tensions flaring between Russia and Ukraine, the company noted that it is not fulfilling existing orders, or accepting new orders, from Russia or Belarus, the aggressors in the invasion of Ukraine.
MillerKnoll also has ceased new orders and fulfillments in Ukraine out of safety. The company said that it historically sells products to two dealers in each of the three countries.
In the Americas, the company’s contract segment recorded a 25.6-increase in sales and a 36.3-increase in orders.
However, MillerKnoll has contended with factors hindering it from producing and shipping orders in a timely fashion. The company estimated that these disruptions impacted net sales by around $34 million during the third quarter alone. The company also is also sitting on a backlog of orders worth $1 billion.
“We have implemented a range of countermeasures to combat these pressures and began to see improvement in production levels in the second half of the quarter,” the company stated.
The company’s retail segment saw a slight increase in demand with sales up 5.5 percent compared to this time last year, and a 2.6-percent boost in orders.
About eight months after the merging of Herman Miller and Knoll, executives said they are on track to deliver $120 million in cost synergies within three years of closing. As of the latest quarter, the company claimed it has implemented $45 million in run rate savings.
