Herman Miller soars 34% as it rejoins dividend club

MillerKnoll

17/09/2020 18:44

By Noel Randewich
    Sept 17 (Reuters) - You may need to sit down for this. 
    Shares of Herman Miller  MLHR.O  soared 34% on Thursday
after the office chair seller posted blowout quarterly results
and joined an expanding list of companies reinstating their
dividends as they become more confident about recovering from
the coronavirus.
    Herman Miller late on Wednesday reported revenue and
earnings far above analysts' expectations, with sales from its
retail segment surging 40% thanks to strong demand from people
kitting out their home offices due to the pandemic.  urn:newsml:reuters.com:*:nASA016EG
    Pointing to "our confidence in the strategic direction of
the business, strong liquidity position and operating
performance this quarter," the Zeeland, Michigan company also
re-established its quarterly cash dividend, which it suspended
in early April, one of several steps it took then to cut costs
due to the coronavirus threat. 
    Shares of Steelcase  SCS.N , an office furniture competitor
that reports its quarterly results on Sept. 22, surged 14%.
    S&P 500 companies slashed or suspended over $40 billion in
dividends in the second quarter, the deepest quarterly drop
since 2009, according to S&P Dow Jones Indices. 
    But after cuts tapered off mid-year as the U.S. economy
began to rebound, S&P Dow Jones Indices estimated that S&P 500
companies would see only a 2% decline in overall 2020 dividend
payments, not nearly as dire as analyst projections earlier this
year of around a 10% drop.
    As coronavirus lockdowns ease and businesses reopen, several
U.S. companies have now restarted their dividends or increase
existing dividends.
    "The rebound of dividend and buyback sentiment together with
the stabilization of dividend cut announcements suggest the
worst may be over and a sharp drop in cash returns in 2H20 is
unlikely," Evercore ISI strategist Dennis DeBusschere wrote in a
recent client note.
    Microsoft  MSFT.O , which has soared to record highs during
the pandemic, this week hiked its dividend by 10%.
    Companies recently reinstating dividends include Guess
 GES.N , on Sept. 2, and Estee Lauder  EL.N  on Aug. 20. Foot
Locker  FL.N  also resumed its dividend in August, even as the
shoe retailer declined to reinstate its full-year 2020 guidance
because of ongoing uncertainty related to COVID-19.

 (Reporting by Noel Randewich
Editing by Marguerita Choy)
 ((noel.randewich@tr.com; (415) 677 2542; Reuters Messaging:
Twitter: @randewich))