Office and contract furniture giant MillerKnoll experienced an 11.4 percent sales decline in its third-quarter earnings report compared to last year, leading to a series of restructuring efforts. The company embarked on workforce reduction initiatives without specifying the exact number of employees affected. However, it was noted that the layoffs primarily targeted the management workforce with the aim of enhancing efficiency throughout the organisation. In addition to workforce reduction, MillerKnoll implemented other cost-cutting measures such as showroom consolidations, although specific locations were not disclosed.
According to the report, the company's consolidated operating expenses for the quarter amounted to $294.2 million, down from $314.4 million in the previous year.
Sales across all three segments of the company experienced a decline, with a 9 percent decrease in America contract, a 10.4 percent drop in international contract, and a 17 percent decrease in global retail. Orders for the quarter also saw a decline of 6.2 percent compared to the previous year.
Despite the challenging market conditions attributed to factors like elevated interest rates and geopolitical uncertainties, MillerKnoll remains optimistic about future growth prospects. The company highlighted various internal and external indicators suggesting potential growth with more stable economic conditions.
While grappling with reduced sales, MillerKnoll managed to achieve a gross margin of 38.6 percent for the quarter, marking a 450 basis points increase from the same period last year. The company attributed this improvement to strategies such as price optimisation, enhanced freight and inventory management, as well as benefits from ongoing synergy efforts resulting from the merger of Herman Miller and Knoll brands.
Source: www.furnituretoday.com