What Happened?
Shares of office furniture manufacturer MillerKnoll (NASDAQ: MLKN) jumped 3.5% in the morning session after the company amended its credit agreement to refinance its debt, which strengthened its financial structure and provided a clearer repayment path. The company disclosed on August 11 that it had amended its Credit Agreement, refinancing its existing loan with a new $550 million term loan facility. This move establishes a defined seven-year repayment path, which can increase investor confidence in the company's financial stability. Adding to the positive sentiment, a new survey from the National Federation of Independent Business (NFIB) showed that small business optimism rose in July. Notably, the report highlighted that of the businesses making expenditures, 12% spent on new fixtures and furniture, suggesting a healthy demand environment for MillerKnoll's products.
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What Is The Market Telling Us
MillerKnoll’s shares are somewhat volatile and have had 11 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 11 days ago when the stock dropped 3.1% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.
MillerKnoll is down 6% since the beginning of the year, and at $21.06 per share, it is trading 29.8% below its 52-week high of $29.98 from August 2024. Investors who bought $1,000 worth of MillerKnoll’s shares 5 years ago would now be looking at an investment worth $851.94.
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