Despite posting healthy earnings, MillerKnoll, Inc.'s (NASDAQ:MLKN ) stock has been quite weak. Along with the solid headline numbers, we think that investors have some reasons for optimism.

How Do Unusual Items Influence Profit?

To properly understand MillerKnoll's profit results, we need to consider the US$82m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If MillerKnoll doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On MillerKnoll's Profit Performance

Because unusual items detracted from MillerKnoll's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think MillerKnoll's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 37% in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into MillerKnoll, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for MillerKnoll (1 shouldn't be ignored!) that we believe deserve your full attention.

Today we've zoomed in on a single data point to better understand the nature of MillerKnoll's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.