As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at office & commercial furniture stocks, starting with MillerKnoll (NASDAQ:MLKN).
The sector faces a tepid outlook as workplace dynamics continue to evolve. Hybrid work means that enterprise demand for office furniture is lower. Consumer demand for the same products likely will not offset the loss from enterprises, as individual workers tend to have less space and need for the sector's wares. The Trump administration also possesses a high willingness to impose tariffs on key partners, which could result in retaliatory actions, all of which could pressure those selling furniture that may feature components or labor from overseas. Lastly, the COVID-19 pandemic showed that there is always a risk that something disrupts supply chains, and companies need contingency plans for this.
The 4 office & commercial furniture stocks we track reported a strong Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Slowest Q1: MillerKnoll (NASDAQ:MLKN)
Created through the 2021 merger of industry icons Herman Miller and Knoll, MillerKnoll (NASDAQ:MLKN) designs, manufactures, and distributes interior furnishings for offices, healthcare facilities, educational settings, and homes worldwide.
MillerKnoll reported revenues of $876.2 million, flat year on year. This print fell short of analysts’ expectations by 4.6%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS guidance for next quarter estimates and full-year revenue guidance missing analysts’ expectations.
MillerKnoll Total Revenue
MillerKnoll delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 8.5% since reporting and currently trades at $16.78.
With roots dating back to 1944 and a significant acquisition of Kimball International in 2023, HNI (NYSE:HNI) manufactures and sells office furniture systems, seating, and storage solutions, as well as residential fireplaces and heating products.
HNI reported revenues of $599.8 million, up 2% year on year, outperforming analysts’ expectations by 3.3%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates.
HNI Total Revenue
HNI pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 7.2% since reporting. It currently trades at $46.47.
Pioneering carbon-neutral flooring since its founding in 1973, Interface (NASDAQ:TILE) is a global manufacturer of modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring that specializes in carbon-neutral and sustainable flooring solutions.
Interface reported revenues of $297.4 million, up 2.6% year on year, in line with analysts’ expectations. Still, its results were good as it locked in a solid beat of analysts’ EPS estimates.
Interestingly, the stock is up 7.1% since the results and currently trades at $20.15.
Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE:SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services.
Steelcase reported revenues of $788 million, up 1.7% year on year. This print was in line with analysts’ expectations. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates.
The stock is down 3% since reporting and currently trades at $10.29.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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