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The Gory Details on Herman Miller's Double Miss

By Seth Jayson – Updated Apr 7, 2017 at 11:29AM

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Just the facts, Fool.

Herman Miller (Nasdaq: MLHR) reported earnings on Dec. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 1 (Q2), Herman Miller missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share shrank significantly.

Margins shrank across the board.

Revenue details
Herman Miller recorded revenue of $441.8 million. The four analysts polled by S&P Capital IQ foresaw sales of $454.0 million on the same basis. GAAP reported sales were 0.9% lower than the prior-year quarter's $445.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.35. The four earnings estimates compiled by S&P Capital IQ averaged $0.39 per share. GAAP EPS of $0.14 for Q2 were 66% lower than the prior-year quarter's $0.41 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 33.6%, 50 basis points worse than the prior-year quarter. Operating margin was 4.1%, 500 basis points worse than the prior-year quarter. Net margin was 1.9%, 340 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $440.1 million. On the bottom line, the average EPS estimate is $0.33.

Next year's average estimate for revenue is $1.79 billion. The average EPS estimate is $1.50.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 119 members out of 131 rating the stock outperform, and 12 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Herman Miller a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Herman Miller is outperform, with an average price target of $29.00.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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