Shares of MillerKnoll (MLKN -0.42%), a furniture maker serving businesses and consumers, rose just shy of 12% in early trading on Wednesday. The big news was the company's fiscal third-quarter earnings release on Tuesday. Though the gain was pared to around 5% by roughly 10 a.m. ET today, it's clear that investors were pleased with the update.
MillerKnoll reported sales of roughly $1.03 billion in the fiscal third quarter of 2022. That was a huge 74% increase over the previous year, though the increase was driven by the merger of Miller and Knoll in 2021. On an organic basis, the company's sales increased by a still-impressive 20.3%.
Management highlighted strength in both the consumer and business sides of its operation. That said, the company also noted that sales were constrained by supply chain issues, as it was unable to meet all of the demand for its products. That's a negative in one sense, but with management projecting fiscal fourth-quarter sales of between $1.075 billion and $1.115 billion, it seems the company is confident that demand is rising, not falling. Adding to that number, meanwhile, will be pricing actions to deal with the impact of inflation.
On the bottom line, MillerKnoll reported adjusted earnings per share of $0.28 in the third quarter. That was down from $0.65 in the previous year, but a penny higher than the analyst consensus. Rising costs were a worrying headwind, but investors still tend to like it when companies beat Wall Street estimates.
The company is projecting fourth-quarter earnings to come in between $0.46 and $0.52 per share, suggesting that it will close out the year on a strong note.
The really interesting thing about this report was the generally upbeat commentary. While it was clear that MillerKnoll is dealing with headwinds (notably inflation and supply chain issues), it clearly suggests that it will keep growing anyway. That's probably the real reason investors chose to take a glass-half-full view today.