Investing.com -- Shares in Herman Miller Inc (NASDAQ:MLHR) surged in after-hours trading after the Michigan-based office furniture company saw its profits soar by roughly 33% during its last quarter.
During the company's first quarter of Fiscal Year 2016, which ended in late-August, Herman Miller posted net sales of $565.4 million, a spike of nearly 11%. When the negative impacts of foreign currency translation were discounted, Herman Miller reported a gain of 6.6% on a yearly basis.
In spite of a 12.8% increase in operating expenses on the quarter, Herman Miller still reported a 9.7% gain in operating earnings over the 13-week period. The office furniture company also increased its gross margin for the quarter from 36.4% to 38.3% for the three months that ended on Aug. 29.
“We are encouraged by our overall operating performance this quarter, which reflects improvements in a number of key areas. We were particularly pleased to see improved momentum in our North American segment, which posted year-over-year order growth of 6%." Herman Miller CEO Brian Walker said in a statement.
"This represents a marked improvement over last quarter’s growth rate, and provides solid evidence that we’re focused on the right actions to re-invigorate growth in this business. While we clearly have more work to do, we feel good about our progress and the level of commitment being demonstrated by our people at all levels of the organization.”
For the quarter, Herman Miller reported diluted net earnings per share of 0.56, significantly above per share diluted net earnings of 0.42 a year earlier. Analysts expected the company to report per share earnings of 0.51 for the quarter.
"These results reflect our commitment to strong operational execution across our traditional lines of business and our strategic focus on higher margin products and channels," Herman Miller CFO Jeff Stutz said in a statement. "This quarter we delivered better than expected sales growth, meaningful gross margin expansion, and well-managed operating expenses. This combination of factors drove a 17% year over year increase in adjusted operating earnings and moved our consolidated operating margin to its highest level in more than six years.”
Shares in Herman Miller gained 2.11 or 7.57% to 29.97 in after-hours trading.