The Zeeland-based office furniture maker says sales for the quarter will fall to between $405 million and $420 million. That’s an expected 20 percent to 23 percent decrease from the $526.5 million in sales recorded during the first quarter of FY 2001.
Earnings for the 2002 first quarter that ended Sept. 1 will come in at an estimated 2 cents to 7 cents per share. That’s an expected decline of 84 percent to 95 percent per share from the same period in 2000, when the company recorded earnings of 46 cents per share. Quarterly earnings could come in even lower if Herman Miller needs to take any charges for cost-cutting initiatives.
Herman Miller in June said it expected quarterly sales to slide to $455 million to $485 million, with Wall Street brokerage analysts anticipating earnings of 23 cents per share. The company will release its quarterly sales and earnings results on Sept. 24.
Herman Miller attributed the downgraded outlook to what’s becoming the deepest annual decline in shipments ever recorded in the office furniture industry’s history.
“The present economic climate continues to pose challenges as we manage the business through this slowdown, which has deepened even more than we had expected,” Chief Financial Officer Beth Nickels said.
The revised outlook came just two weeks after BIFMA’s latest forecast showed the industry stuck in its worst-ever yearly sales downturn in the wake of the sluggish U.S. economy that has cut into corporate profits, office construction and capital spending. BIFMA expects industry shipments to fall 16 percent this year, to $11.14 billion. That’s down about $2 billion from 2000 sales of $13.1 billion.
Herman Miller continues to respond to the soft economy by adjusting production levels, reviewing and prioritizing spending, and “resizing of the business in selected areas,” Nickels said in a prepared statement.
A company spokesman declined comment beyond the Aug. 28 outlook. A subsequent statement indicated that additional details on cost-cutting measures will come with the Sept. 24 earnings release.
“Today’s market poses significant challenges, but through the efforts of Herman Miller’s employee-owners the company continues to pursue its strategic objectives and remains confident in its ability to weather the slow economy and ultimately emerge a stronger organization,” the company said.