Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<div><div><div><div><ul style="list-style-type: disc;"><li><p>As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.</p></li><li><p>With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.</p></li><li><p>Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract &amp; Specialty (IC&amp;S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million. </p></li></ul></div></div></div></div>

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract &amp; Specialty (IC&amp;S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million. 

MillerKnoll, Inc - 3QFY24 EPS Beats; Revenue Misses

<ul><li>MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44.</li><li>Consolidated sales were $872 million, missing our $908 million estimate by $36 million and likewise missing consensus by ~$37 million.</li><li>Gross margin helped the Y/Y comparison, rising 455 bps versus 3QFY23.</li></ul>

MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44.Consolidated sales were $872 million, missing our $908 million estimate by $36 million and likewise missing consensus by ~$37 million.Gross margin helped the Y/Y comparison, rising 455 bps versus 3QFY23.

Thematic (Sector/Industry)

<ul><li>As smaller-cap stocks outperformed, the Water Tower Furniture and Furnishings indexes posted strong gains.</li><li>The Water Tower Research Commercial/Contract Manufacturers Index (+3.5%), Residential Manufacturers &amp; Suppliers Index (+3.8%), Home Goods Retailers Index (+10%), and Mass Retailers Index (+5.3%) outperformed the S&amp;P 500 and DJ30 (both +2.8%). The R2K was up (+4.0%).</li><li>RH and LOVE earnings calls shine additional light on tough industry conditions.</li></ul>

As smaller-cap stocks outperformed, the Water Tower Furniture and Furnishings indexes posted strong gains.The Water Tower Research Commercial/Contract Manufacturers Index (+3.5%), Residential Manufacturers &amp; Suppliers Index (+3.8%), Home Goods Retailers Index (+10%), and Mass Retailers Index (+5.3%) outperformed the S&amp;P 500 and DJ30 (both +2.8%). The R2K was up (+4.0%).RH and LOVE earnings calls shine additional light on tough industry conditions.

Furniture/Furnishings Weekly  - September 16, 2024

<ul><li>Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.</li><li>The Water Tower Residential Manufacturers &amp; Suppliers Index (-3.9%) and Home Goods Retailers Index (-3.7%) outperformed the Commercial/Contract Furniture Index (-6.7%) and all three major indexes (-4.2% to -5.5%).</li><li>The Mass Retailers Index had the week’s best performance (-2.9%).</li></ul>

Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.The Water Tower Residential Manufacturers &amp; Suppliers Index (-3.9%) and Home Goods Retailers Index (-3.7%) outperformed the Commercial/Contract Furniture Index (-6.7%) and all three major indexes (-4.2% to -5.5%).The Mass Retailers Index had the week’s best performance (-2.9%).

Furniture/Furnishings Weekly - Industry Conditions Remain Challenged

<ul><li>Rotation into smaller-cap and value stocks continues.</li><li>The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers &amp; Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN.</li><li>The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. </li></ul>

Rotation into smaller-cap and value stocks continues.The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers &amp; Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN.The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. 

Furniture/Furnishings Weekly - Another Good Week for Stocks

United States

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior office furnishings, furniture systems, products, and services. The Company markets its products to companies, organizations, and individuals worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

MillerKnoll (MLKN US)

MillerKnoll, Inc - 3QFY24 EPS Beats; Revenue Misses

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.

Water Tower Research

MillerKnoll, Inc. - 3QFY24 Earnings

MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44. Consolidated sales were $872 million

Water Tower Research

Furniture/Furnishings Weekly - September 16, 2024

RH’s upcoming push into the European fashion capitals of Milan, Paris, and London, and continued reimaging of its US retail footprint, could be the...

Water Tower Research

Furniture/Furnishings Weekly - Industry Conditions Remain Challenged

Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.

Water Tower Research

Furniture/Furnishings Weekly - Another Good Week for Stocks

The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market.

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)