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Why Herman Miller Stock Popped 16%

By Rich Smith – Updated Jun 27, 2019 at 12:37PM

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What's better than one earnings beat? Herman Miller promises investors a second.

What happened

Shares of Herman Miller (MLKN 0.31%) stock are up 16.3% as of 11:45 a.m. EDT after the furniture maker eclipsed analyst estimates for its fourth and final quarter to fiscal year 2019.

Expected to earn $0.77 per share on sales of $657.2 million in the quarter, Herman Miller instead reported $671 million in sales -- and a per-share profit of $0.78.

Stacks of coins with an overlay of a stock chart trending up

Image source: Getty Images.

So what

Now, a penny-a-share "earnings beat" may not sound like much, but consider how much better Herman Miller did this past quarter than in the year-ago Q4. Sales grew 9% year over year and set a new quarterly record for the company. Profit jumped 47% compared to the $0.53 per share Herman Miller earned a year ago.

As a result, Herman Miller ended the year with sales up 8% ($2.6 billion) and profit up 27% ($2.70 per share for the year).

Now what

CEO Andi Owen commented that Herman Miller is enjoying "strong demand," with sales and earnings growth accelerating and new orders growing 7% in the quarter. Heading into fiscal Q1 2020, management predicts Herman Miller will grow sales to somewhere between $650 million and $670 million, and earn between $0.77 and $0.81 per share on these sales.

Seeing as Wall Street is only looking for sales of $651 million, and $0.76 per share in profits, it looks like Herman Miller fully intends to "beat earnings" again.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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