What Happened?
Shares of office furniture manufacturer MillerKnoll (NASDAQ: MLKN) fell 2.8% in the afternoon session after peer company RH (RH), an upscale furniture retailer, reported weaker-than-expected quarterly results and lowered its guidance.
RH posted second-quarter results that missed analyst estimates for both earnings and revenue, citing "the polarizing impact of tariff uncertainty and the worst housing market in almost 50 years." Consequently, RH trimmed its revenue forecast for the fiscal year, anticipating about $30 million in tariff-related costs in the second half of the year. The company's CEO also warned of "significant inflation" emerging this year and accelerating into 2026. Negative results from a major industry player like RH often raise concerns about the entire furniture sector, weighing on stocks like MillerKnoll.
The shares closed the day at $20.43, down 3.2% from previous close.
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What Is The Market Telling Us
MillerKnoll’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 3.1% on the news that the Consumer Price Index (CPI) report bolstered expectations for a Federal Reserve interest rate cut despite showing persistent inflation. The August CPI data, a key measure of inflation, showed prices rose 2.9% annually, slightly more than economists expected. While inflation remains above the Federal Reserve's 2% target, investors were focusing on other signs of a cooling economy, particularly a weakening labor market. As a result, the market widely anticipated that the Fed would cut interest rates at its September meeting to support the economy. Investors priced in multiple rate cuts by year-end, which boosted market sentiment and sent Treasury yields lower.
MillerKnoll is down 8.8% since the beginning of the year, and at $20.43 per share, it is trading 26.2% below its 52-week high of $27.69 from September 2024. Investors who bought $1,000 worth of MillerKnoll’s shares 5 years ago would now be looking at an investment worth $833.54.
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