ZEELAND — With some lingering economic effects of the COVID-19 pandemic weighing it down, Zeeland-based office furniture giant Herman Miller (NASDAQ: MLHR) still offered a better-than-expected earnings report late Wednesday.
The company saw a 6.6 percent drop in total revenue, totaling $626.8 million for the first quarter of fiscal year 2021 compared to $670.9 million at the same time last year. Still, the slight dip was not as bad as most analysts had forecast.
Herman Miller was propped up by strong retail sales as global markets slowly begin to heal. Retail orders spiked 40 percent year-over-year. This demand was led by the company’s home office category. Orders in that category increased 300 percent as more consumers invested in their home-based offices.
Sales in North America, however, were still feeling the weight of the pandemic. The North American segment of the business was hampered by a 40 percent year-over-year decline in orders.
Gross margins for the quarter improved to 39.9 percent compared to 36.7 during the first quarter last year. Herman Miller attributed the improved margins to a strong product mix and higher productivity from the company’s manufacturing team.
Herman Miller also established its quarterly cash dividend program at $0.1875 per share. The dividend will be paid on Jan. 15, 2021 to shareholders of record as of Nov. 28, 2020.
“Our diversified business model coupled with our ability to act quickly and decisively to manage the business drove strong operating performance for the quarter, once again proving our ability to deliver profitable results even in these difficult times,” the company wrote in a letter to investors. “Our strong performance this quarter validates our strategy, as our multi-channel go-to-market approach enabled us to serve customers where, and how, they needed to be served.”
Concept stores coming
On the heels of the strong quarterly earnings report and a record-breaking summer for Herman Miller Retail, the company announced an expanded retail presence by launching its first concept stores focusing specifically on high-performance task chairs and products that support the home office.
The announcement indicated that the first stores would open in the fall of 2020, but did not provide further information or locations.
“We are excited to reveal our first retail destinations dedicated to offering customers the opportunity to explore the quality and breadth of Herman Miller’s work from home solutions firsthand,” Debbie Propst, president of Herman Miller Retail, said in a statement.
“We are currently seeing unprecedented sales across these categories. The stores are a direct response to our collective need, which has been building over time and heightened by the pandemic, for more versatile home environments and our customer’s desire to test drive these highly-considered products in person.”