MLKN

- Interested in MillerKnoll, Inc.? Here are five stocks we like better. - Shareholders approved all four management proposals, including three director elections, executive compensation, KPMG's appointment as auditor and a new long-term incentive plan. - MillerKnoll's fiscal 2026 net sales rose 5% to $3.84 billion; the company reported adjusted diluted EPS of $1.86, generated $200 million in operating cash flow, reduced debt by $41 million and returned about $67 million to shareholders. - For fiscal 2027, management will prioritize profitable growth through tighter operational and cost discipline, improved capital allocation and continued debt reduction, while expanding products, showrooms and retail locations. - High-Yield MillerKnoll, Inc.: Value or Value Trap? MillerKnoll (NASDAQ:MLKN) shareholders approved all four management-backed proposals at the company's 2026 annual meeting, including the election of three directors, executive compensation, the appointment of KPMG LLP as independent auditor and a new long-term incentive plan. Board Chair John Hoke said approximately 94% of outstanding shares were represented at the meeting, either in person or by proxy. Jeanne Gang, Mike R. Smith and Claire Spofford were elected to three-year terms that will run through the company's 2029 annual shareholder meeting. → Is Synopsys Back from the Dead? EDA Leader Inks Deals With Amazon and OpenAI Shareholders also approved, on an advisory basis, compensation for MillerKnoll's named executive officers. In addition, they ratified KPMG LLP as the company's registered public accounting firm for the fiscal year ending May 29, 2027, and approved the MillerKnoll Inc. 2026 long-term incentive plan. Following the formal business portion of the meeting, Interim Chief Executive Officer Jeff Stutz said the company finished fiscal 2026 with net sales of $3.84 billion, representing a 5% increase from the prior year. → Schneider Just Paid Up for PTC—Is the SaaSpocalypse Overdone? MillerKnoll reported diluted earnings per share of $1.32 on a reported basis and adjusted diluted earnings per share of $1.86, Stutz said. For the full fiscal year, the company generated $200 million in cash flow from operations and invested $122 million in capital expenditures. MillerKnoll also reduced total outstanding debt by $41 million and returned approximately $67 million to shareholders through dividends and share repurchases, according to Stutz. → Delta Air Lines Faces a Fuel Crisis—But There's a Silver Lining Stutz outlined three areas of focus for fiscal 2027: increasing operational discipline, maintaining cost discipline and sharpening the company's approach to capital allocation, cash flow and balance-sheet strength. - Concentrate resources on initiatives that management believes can create the greatest shareholder value. - Align expenses with revenue levels while maintaining rigorous cost controls. - Support debt reduction while preserving the ability to invest in growth. "Our number one priority is growing profitably and driving value for our associates and shareholders," Stutz said. Stutz said MillerKnoll's design-driven brands introduced new products across its contract and retail channels during the year. At the Design Days trade show in Chicago, the company debuted more than 40 product lines and extensions, spanning healthcare, workplace and residential offerings. The company operates in more than 100 countries and is supported by its dealer network and international footprint, Stutz said. During the past year, MillerKnoll invested in its global showroom network, including an expansion of its Chicago flagship and updates in New York, Monterrey, São Paulo and Shanghai. In retail, the company opened 15 new Design Within Reach and Herman Miller locations across priority U.S. markets. Stutz said the additions reflect MillerKnoll's commitment to expanding the retail channel and introducing its designs to new audiences. MillerKnoll was named to TIME magazine's list of America's Best Companies for 2026, according to Stutz. He also cited recognition from Civic 50 Points of Light as one of the 50 most community-minded companies in the United States and inclusion on Forbes' 2026 list of America's Best Employers for Company Culture. As the company marks its fifth anniversary as MillerKnoll, Stutz said management intends to maintain its focus on profitable growth and value creation. No shareholder questions were submitted during the meeting. MillerKnoll, Inc is a global design company that develops furnishings and related products for workplaces, homes, healthcare facilities, educational institutions and hospitality environments. Its offerings include seating, desks, tables, storage, lighting, textiles and accessories, as well as solutions designed to support collaboration, privacy and flexible work settings. The company's portfolio includes brands such as Herman Miller, Knoll, Design Within Reach, Muuto, HAY, Maharam and Colebrook Bosson Saunders. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "MillerKnoll Shareholders Approve Incentive Plan as Fiscal 2026 Sales Rise 5%" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Interested in MillerKnoll, Inc.? Here are five stocks we like better. Mixed first-quarter performance: MillerKnoll’s sales fell 3.4% year over year to $923 million, while orders rose 3.2% to $914 million. Adjusted EPS was $0.53, or $0.42 excluding a tariff-refund benefit. Demand varied by segment: North America Contract sales and orders declined, although management cited improving pipelines and September order momentum. International Contract orders surged 17.3%, while Global Retail orders increased 4.3% and North American retail orders rose 7.5%. Fiscal 2027 sales outlook lowered: The company now expects full-year sales of $3.88 billion to $4.03 billion, while maintaining adjusted EPS guidance of $1.85 to $2.15. MillerKnoll also forecast second-quarter sales of $972 million to $1.012 billion and adjusted EPS of $0.43 to $0.49. High-Yield MillerKnoll, Inc.: Value or Value Trap? MillerKnoll (NASDAQ:MLKN) reported first-quarter fiscal 2027 sales and orders that reflected uneven demand across its businesses, as strong International Contract and Global Retail order trends were offset by softer-than-expected North America Contract activity. For the quarter ended Aug. 29, 2026, consolidated net sales totaled $923 million, down 3.4% from a year earlier, while consolidated orders increased 3.2% to $914 million. Adjusted diluted earnings per share were $0.53, including an approximately $0.11 per-share net benefit from refunds of previously expensed IEPA tariffs. Excluding that benefit, adjusted EPS was $0.42, above the company’s guidance range, according to Interim Chief Executive Officer Jeff Stutz. → These 3 AI Stocks Sold Off Hard—Even as Their Outlooks Improved “Overall, we delivered solid margin performance, earnings, and cash generation despite revenue headwinds,” Stutz said, citing disciplined execution and cost management. Reported gross margin rose 320 basis points year over year to 41.7%, while adjusted gross margin was 41.8%. The company recognized $16.5 million in U.S. government refunds related to previously expensed IEPA tariffs, contributing 180 basis points to the year-over-year gross-margin increase. → Insiders Signal Deep Value In DICK’s Sporting Goods Excluding the tariff-refund benefit, adjusted gross margin improved 150 basis points, driven primarily by pricing realization and partly offset by inflationary pressure, Chief Financial Officer Kevin Veltman said. MillerKnoll generated $49 million in operating cash flow and spent $33 million on capital expenditures during the quarter. It ended the period with $580 million in available liquidity, while net debt to EBITDA stood at 2.75 times under its lending agreement. → Coach’s Momentum Powers Tapestry Despite the Stock’s Sharp Pullback The company’s board declared a quarterly cash dividend of $0.1875 per share, payable Oct. 15 to shareholders of record as of Aug. 29. Management said its capital-allocation priorities remain investing in growth opportunities with strong returns, reducing debt, maintaining the dividend and being opportunistic with share repurchases. Veltman said the company’s shift toward smaller-format Herman Miller stores is an example of its focus on investment returns. North America Contract sales fell 5.3% to $506 million, while orders declined 1.7% to $484 million. The company attributed the sales comparison partly to $55 million to $60 million in orders that were pulled forward from the first quarter of fiscal 2026 into the fourth quarter of fiscal 2025 ahead of tariff-related pricing actions. Adjusted operating margin in the segment was 10.7%, down 70 basis points year over year, as lower sales volume and inflationary costs more than offset pricing realization and tariff refunds. Stutz said demand trends varied by customer sector. The company continued to see strength in insurance, financial services and business services, while healthcare and federal, state and local government activity was softer. John Michael, president of North America Contract, said customers appear to be taking longer to convert awarded projects into orders. He pointed to public-sector uncertainty, slower activity at certain federal agencies and the timing of healthcare projects. Still, he said the company expects North America Contract to grow over the balance of fiscal 2027. Management said internal indicators, including project funnels, funnel additions and awarded contracts, increased year over year. Veltman added that August produced year-over-year order growth for North America Contract and the company overall, while orders were up 9% year over year through the first three weeks of September across all three segments. MillerKnoll also estimated that new U.S.-Canada tariff actions would create an approximately $0.07-per-share cost impact for the full year. The company manufactures in both countries and is pursuing mitigation efforts including inventory planning, supplier arrangements, dual sourcing and sourcing from outside affected tariff regions. International Contract revenue declined 6.4% to $157 million, but orders rose 17.3% to $181 million, including a notable project win in South Korea. The company reported strong activity in Asia, the Middle East and portions of Europe and Latin America, along with demand from financial services, private-office customers, healthcare and technology. Adjusted operating margin was 4.6%, down 390 basis points from a year earlier. Veltman attributed the decline to lower sales, showroom investments, the timing of sales events and higher incentive compensation. Stutz said profitability in the international business has also been affected by a shift toward a broader mix of furnishings beyond task seating, which has historically been a high-profit category. The company is pursuing broader product-category participation to compete for larger projects and increase total profit dollars over time, he said. Management also cited cost inflation, energy-price pressures and regional manufacturing overhead absorption as factors affecting international profitability. During the quarter, the company hosted dealers from more than 20 countries in Jakarta, Indonesia, as it seeks to expand distribution and dealer engagement in Asia-Pacific. Global Retail sales rose 2.6% to $261 million, with comparable sales flat overall and North American comparable sales up 1.9%. Orders increased 4.3% to $249 million, while North American orders rose 7.5%. The company said this marked its eighth consecutive quarter of North American retail order growth. Adjusted operating margin in Global Retail increased 580 basis points to 7%, including a 410-basis-point benefit from tariff refunds. Excluding that benefit, adjusted operating margin improved 170 basis points, supported by pricing and cost savings despite planned investments in new stores. President of Global Retail Debbie Propst said sales and orders were softer than expected in June and July, particularly in web sales and the outdoor category, where the company lacked some inventory because of PFAS regulations. August strengthened considerably, and the company said retail trends remained positive into September. The company opened a Design Within Reach location in Raleigh, North Carolina, and Herman Miller stores in Columbus, Ohio; St. Louis, Missouri; and San Antonio, Texas. It expects to open five to seven stores during the fiscal second quarter and approximately 14 to 18 locations for the full year. Propst said Herman Miller stores opened in the latter half of fiscal 2025 and throughout fiscal 2026 are progressing toward profitability in fiscal 2027. MillerKnoll is also restructuring its Holly Hunt business, including workforce reductions, corporate-footprint adjustments and the planned closure of its Minneapolis showroom in favor of an outside sales representative structure. For the fiscal second quarter, MillerKnoll expects sales of $972 million to $1.012 billion, representing approximately 4% year-over-year growth at the midpoint. It forecast adjusted EPS of $0.43 to $0.49. For fiscal 2027, the company lowered its sales outlook to $3.88 billion to $4.03 billion, representing approximately 3% growth at the midpoint, citing lower-than-expected first-quarter sales and orders. It maintained its adjusted EPS outlook of $1.85 to $2.15, including the estimated impact from recent U.S.-Canada tariff actions. MillerKnoll, Inc is a global design company that develops, manufactures and sells furnishings and related products for workplace, healthcare, education, hospitality and residential environments. Its portfolio includes furniture for offices and homes, seating, desks, tables, storage systems, lighting, textiles and accessories, as well as products intended to support collaboration and flexible workspaces. The company operates a collection of design-focused brands, including Herman Miller, Knoll, Design Within Reach, Muuto, HAY, Maharam and Geiger. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "MillerKnoll Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 3.4% revenue decline to softer-than-anticipated demand in North America Contract and Global Retail, partially offset by strong international order growth. Performance in North America Contract was impacted by a difficult year-over-year comparison due to a $55 million to $60 million order pull-forward in the prior year related to tariff pricing actions. The company is executing a three-pillar strategy focused on elevating operational discipline, maintaining rigorous cost management, and sharpening capital allocation to support debt reduction. Management noted that while overall North America demand was soft, internal indicators like project funnel additions and awarded contracts remain constructive, suggesting a timing issue rather than a structural slowdown. In Global Retail, the company is pivoting toward smaller-format Herman Miller stores to optimize capital efficiency while leveraging direct mail to counter rising digital advertising costs. International Contract growth is being driven by new product traction, specifically the Concert line by Knoll, which is helping the company penetrate the European private office category. The full-year sales guidance was lowered to $3.88 billion to $4.03 billion to reflect Q1 softness, though management maintained the EPS range based on expected cost-saving realizations. Guidance includes an estimated $0.07 per share headwind from recent U.S.-Canada tariff actions, which the company is mitigating through dual-sourcing and inventory pre-stocking. Management expects price-cost dynamics to become a slight headwind of 20 to 30 basis points in Q2 as inflationary pressures on steel and diesel ramp up. The retail strategy assumes the opening of 14 to 18 new stores in fiscal 2027, with a focus on stores reaching profitability within their second year of operation. Capital allocation priorities for the remainder of the year emphasize debt reduction and maintaining the dividend while preserving capacity for high-return growth investments. A $16.5 million refund related to previously expensed IEPA tariffs provided a $0.11 per share net benefit, helping to offset volume deleverage in the quarter. The company implemented a workforce reduction and reorganization within the Holly Hunt brand to right-size its corporate footprint and improve segment profitability. Manufacturing footprint optimization continues with the closure of a third plant in West Michigan to reduce fixed overhead and improve long-term margins. Management flagged inventory challenges in the outdoor retail category due to PFAS regulations, though they noted these issues were largely resolved by the end of the quarter. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while the funnel is robust, customers are taking longer to convert awarded projects into orders due to midterm election uncertainty and public sector hesitation. Larger organizations returning to offices 4-5 days a week is expected to drive significant retooling activity over the next 6 to 12 months. Orders improved throughout the quarter, with August showing year-over-year growth across the business. Management disclosed that orders for the first three weeks of September were up 9% year-over-year, showing growth across all three reporting segments. Management acknowledged rising digital advertising costs driven by Google's shift to AI search and increased competition ahead of elections. The company is responding by shifting marketing spend toward direct mail and evolving its digital product roadmap to better capture AI-driven traffic. The margin decline in International Contract was attributed to a strategic shift toward larger project wins that include lower-margin ancillary products to gain market share. Fixed overhead deleverage in European factories and higher energy costs have also pressured margins, though an 18% order increase in Q1 is expected to improve future volume leverage.

This article first appeared on GuruFocus. Net Sales: $923 million, down 3.4% year over year (down 3.3% organically). Consolidated Orders: $914 million, up 3.2% as reported and 3.5% organically. Backlog: $669 million at quarter end, down 3.1% year over year. Gross Margin: Reported gross margin up 320 bps to 41.7%; adjusted gross margin 41.8%. Excluding tariff refund benefit, adjusted gross margin improved 150 bps. Adjusted EPS: $0.53; excluding $0.11 per share net benefit from IEEPA tariff refunds, adjusted EPS was $0.42. Cash from Operations: $49 million generated during the quarter. Capital Expenditures: $33 million invested in the quarter. Available Liquidity: $580 million at quarter end. Net Debt to EBITDA: 2.75 times as defined by lending agreement. Dividend: Quarterly cash dividend of $0.1875 per share declared, payable October 15; annual indicated dividend of $0.75 per share, yield 3.7%. North America Contract Net Sales: $506 million, down 5.3% reported and 5.2% organically. North America Contract Orders: $484 million, down 1.7% reported and 1.6% organically. North America Contract Operating Margin: Reported 9.4%; adjusted 10.7%, down 70 bps year over year. International Contract Net Sales: $157 million, down 6.4% reported and 6.2% organically. International Contract Orders: $181 million, up 17.3% reported and 17.9% organically. International Contract Operating Margin: Reported 2.4%; adjusted 4.6%, down 390 bps year over year. Global Retail Net Sales: $261 million, up 2.6% reported and 2.8% organically. Global Retail Comparable Sales: Flat overall; North America comp sales up 1.9%. Global Retail Orders: $249 million, up 4.3% reported and 4.7% organically; North America orders up 7.5% (eighth consecutive quarter of North America Retail order growth). Global Retail Operating Margin: Reported 6.1%; adjusted 7.0%, up 580 bps year over year (including 410 bps net tariff refund benefit); excluding net tariff benefit, adjusted operating margin improved 170 bps. Store Openings: Opened one DWR store (Raleigh, NC) and three Herman Miller stores (Columbus, OH; St. Louis, MO; San Antonio, TX) in Q1; expect 57 new stores in Q2 and approximately 1418 new store openings in FY27. Tariff Impact: Estimated ~$0.07 per share unfavorable impact from new US-Canada tariff actions in FY27 outlook. Q2 FY27 Outlook: Net sales of $972 million$1.012 billion (~4% year-over-year growth at midpoint); gross margin 38.3%39.3%; adjusted operating expenses $321 million$331 million; adjusted diluted EPS $0.43$0.49. Full Year FY27 Outlook: Net sales reduced to $3.88 billion$4.03 billion (~3% growth at midpoint); adjusted EPS range maintained at $1.85$2.15. Warning! GuruFocus has detected 3 Warning Sign with MLKN. Is MLKN fairly valued? Test your thesis with our free DCF calculator. Release Date: September 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted EPS of $0.53 exceeded guidance, with $0.42 excluding tariff refunds, demonstrating disciplined cost management. Consolidated orders grew 3.2% year over year, with International Contract orders up 17.3% and Global Retail orders up 4.3%. Adjusted gross margin improved 150 basis points excluding tariff refunds, driven by pricing realization and cost savings. Global Retail segment delivered sales growth of 2.6% and adjusted operating margin improvement of 170 basis points excluding tariff refunds. Strong cash generation with $49 million from operations and $580 million in available liquidity, supporting debt reduction and growth investments. Net sales declined 3.4% year over year to $923 million, missing expectations due to softer North America Contract and Global Retail revenue. North America Contract orders decreased 1.7% year over year, with particular weakness in healthcare and government sectors. International Contract sales fell 6.4% year over year, and adjusted operating margin declined 390 basis points due to lower sales and higher costs. Full-year sales guidance was reduced to $3.88-$4.03 billion, reflecting lower first-quarter sales and orders. New US-Canada tariffs are expected to create a $0.07 per share headwind in FY27, adding cost pressure. Q: In the North American Contract segment, internal funnel metrics and market dynamics remain positive, but that didn't translate to a stronger first quarter. Can you give more color on why?A: Jeff Stutz (Interim CEO) noted supportive indicators like corporate profitability, Class A leasing strength, and resilient CEO confidence, suggesting the issue is more about resilient sectors having a down quarter in a project-driven business. John Michael (President, North America Contract) added that customers are taking longer to convert awarded projects to orders, with hesitation at the state and local level tied to midterm uncertainty, slower-than-normal return in some federal agencies, and a pause in healthcare project timing. Q: Do you still expect growth from North American Contract this year even with the soft first quarter?A: John Michael (President, North America Contract) confirmed the forecast for the balance of the year shows growth, though the segment is behind after Q1, and teams are working hard to catch up. Q: Can you give insight on the cadence of North American Contract orders in the quarter and what September looks like so far?A: Kevin Veltman (CFO) said the quarter generally improved as it went on, particularly in August, which was a growth quarter year over year. Through the first three weeks of September, orders were up 9% year over year, with growth across all three segments. Q: What have you assumed from a price-cost standpoint for the full year, and how are you handling the latest inflation round?A: Kevin Veltman (CFO) said Q1 price-cost was slightly favorable, but he expects a slight headwind of 20 to 30 basis points year over year in Q2 as inflation ramps up, citing oil near $100 and derivative effects. Jeff Stutz (Interim CEO) added that a new pricing action for International Contract, averaging about 4%, took effect earlier in September, and the company is following a familiar playbook on Canada tariffs, including pulling component inventory forward and leveraging dual supply. Q: Can you discuss the cost actions taken to date, how much drove the Q1 outperformance, and the visibility going forward if revenue doesn't accelerate?A: Jeff Stutz (Interim CEO) described an enterprise-wide effort to make deliberate spending choices, including SG&A and COGS reductions, supply management savings, and manufacturing capacity moves (two plants closed, a third closing in West Michigan). Kevin Veltman (CFO) quantified $3 million to $5 million of savings in the OpEx bridge, including HOLLY HUNT actions. Debbie Propst (President, Global Retail) noted HOLLY HUNT orders returned to growth in Q1 after four consecutive quarters of decline, with leadership adjustments, corporate footprint right-sizing, and the closing of the Minneapolis showroom. Q: You slightly brought down the full-year sales guide. What specifically are you seeing in NAC and Global Retail, and is it temporary deferral or structural?A: John Michael (President, North America Contract) said pipelines remain encouraging, with robust dealer activity, though some projects are larger and take longer to materialize, while recent activity has skewed to smaller projects. Debbie Propst (President, Global Retail) said the change largely reflects a soft June and July, typically the softest months, driven by web and the outdoor category, where PFAS regulations caused inventory shortfalls. August rebounded strongly, particularly in North America comps, and quarter-to-date trends remain strong. Q: On Global Retail, given macro pressures and changes in the digital marketing landscape, is an acceleration in trends reasonable, and how do new stores entering the comp base contribute?A: Debbie Propst (President, Global Retail) cited increased digital advertising costs from Google's shift to AI mode, prompting heavier use of direct mail in August and through the balance of the year, especially with midterms ahead. She said web performance rebounded significantly in August and September after inventory issues cleared, and that all FY27 Global Retail expansion will come from stores opened in FY25 and FY26, with North America store comps in Q1 in line with Q4. Q: With improving profitability from cost savings and the retail ramp, how are you thinking about capital allocation, especially debt paydown?A: Kevin Veltman (CFO) said priorities remain unchanged: invest in growth opportunities with the strongest returns (leaning into Herman Miller stores), pay down debt as the second priority (net debt to EBITDA was 2.75 times versus 2.8 last quarter), then maintain the dividend and be opportunistic on share repurchase. Q: Can you explain the International Contract profitability decline over the last few years and what will improve it going forward?A: Jeff Stutz (Interim CEO) said the business is heavily indexed to high-profit task seating, and the company is pulling through other furnishings categories to access larger projects, which has shifted mix toward lower gross margin products but aims to drive more profit dollars over time. He also cited cost inflation, energy prices, and regional mix shifts that reduced overhead leverage, particularly in European factories. Kevin Veltman (CFO) added that International is project-based and moves quarter to quarter, with Q1 margins tied to lower order levels and backlog, while orders rose nearly 18% in the quarter. He also noted new showroom costs in Mexico City, timing of sales and marketing events, and lower share of wallet internationally as an opportunity. Q: In Global Retail, what kind of returns are you getting from more mature stores open for a year?A: Debbie Propst (President, Global Retail) said the cohort of stores opened in the back half of FY25 and all of FY26 is showing progress and should reach profitability in FY27. She noted a softer initial ramp for DWR than expected, but a stronger second-year ramp, and reiterated commitment to the store growth strategy given the economics and progress. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MillerKnoll (MLKN) came out with quarterly earnings of $0.53 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.45 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +51.43%. A quarter ago, it was expected that this furniture maker would post earnings of $0.52 per share when it actually produced earnings of $0.55, delivering a surprise of +5.77%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. MillerKnoll, which belongs to the Zacks Furniture industry, posted revenues of $923.4 million for the quarter ended August 2026, missing the Zacks Consensus Estimate by 2.05%. This compares to year-ago revenues of $955.7 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. MillerKnoll shares have added about 11.2% since the beginning of the year versus the S&P 500's gain of 13.4%. While MillerKnoll has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for MillerKnoll was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.46 on $1.02 billion in revenues for the coming quarter and $2.02 on $4.01 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Furniture is currently in the bottom 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Bassett Furniture (BSET), is yet to report results for the quarter ended August 2026. The results are expected to be released on September 30. This furniture seller is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents a year-over-year change of +44.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Bassett Furniture's revenues are expected to be $83.05 million, up 3.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MillerKnoll, Inc. (MLKN) : Free Stock Analysis Report Bassett Furniture Industries, Incorporated (BSET) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Sept. 22, 2026 Vice President of Investor Relations - Wendy Watson Interim Chief Executive Officer - Jeffrey Stutz Chief Financial Officer - Kevin J. Veltman President of North America Contract - John Michael President of Global Retail - Debbie F. Propst Operator: Good morning, and to MillerKnoll's Quarterly Earnings Conference Call. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Wendy Watson, Vice President of Investor Relations. Wendy Watson: Good morning. And welcome to our first quarter fiscal 27 conference call. With me are Jeffrey Stutz, Miller Knowles' Interim Chief Executive Officer and Kevin J. Veltman, Chief Financial Officer. Joining them for the Q and A session are John Michael, President of North America Contract and Debbie F. Propst, President of Global Retail. We issued our earnings press release for the quarter ended August 29, 2026, before market opened today. And it is available on our Investor Relations website at millernoll.com. A replay of this call will be available on our website within 24 hours. Before I turn the call over to Jeffrey, please remember our safe harbor disclosure regarding forward looking information. During the call, management may discuss information that is forward looking and involves known and unknown risks uncertainties, and other factors which may cause the actual results to be different than those expressed or implied. Please evaluate the forward looking information in the context of these factors. Which are detailed in today's press release. The forward looking statements are made as of today's date, and except as may be required by law, we assume no obligation to update or supplement these statements. We also refer to certain non GAAP financial metrics. And our press release includes the relevant non GAAP reconciliations. With that, I will turn it over to Jeffrey. Jeffrey Stutz: Thanks, Wendy. Good morning, and welcome, everyone. Before Kevin reviews our financial results and outlook, I would like to update you on the priorities we outlined last quarter and our commitment to driving improved performance and disciplined execution across the organization. Overall, we delivered solid margin performance, earnings, and cash generation despite revenue headwinds. First quarter sales were $923 million, down 3.4% year-over-year, primarily reflecting softer than anticipated revenue, in our North America Contract and global retail segments. Adjusted earnings per share were $0.53 and excluding a $0.11 per share net benefit from IEPA tariff refunds, adjusted earnings per share were $0.42 above our guidance range, reflecting disciplined execution and cost management. Demand conditions varied across our business. Orders were particularly strong in international contract, and continued to grow in global retail, while North America contract orders were softer than we anticipated. At the same time, several of our internal demand indicators and customer verticals remain quite constructive. We are encouraged by the progress our teams are making against this backdrop, and by the actions underway to strengthen MillerKnoll's performance. As I previewed on our last earnings call, we are focused on 3 key areas. First, we are elevating the level of operational discipline we bring to setting priorities and running the business by concentrating our resources on the initiatives, where we believe we can create the greatest value for the organization and for our stakeholders. Last quarter, I said this is about focusing on those efforts that will help us grow the top line and improve profitability. And across the company, our teams have sharpened their priorities and aligned resources behind the opportunities that can have the greatest impact. Let me put a finer point on that. In North America contract, we are concentrating our selling resources on winning global and national account opportunities and leveraging the strength of our brands and our credibility with A and D commercial real estate specifiers. In international contract, new products are gaining traction in the marketplace. Notably our recently introduced Concert line by Knoll is driving early wins in the private office category which is an area of our business previously underpenetrated in Europe. We are also targeting efforts aimed at training dealers, and expanding distribution coverage in the Asia Pacific region where we see premium growth opportunities. And in global retail, we are executing our store growth strategy and applying our learnings, such as an increased emphasis on our smaller format Herman Miller stores, while continuing to optimize our marketing investments to build awareness, and customer acquisition. Second, we are maintaining rigorous cost discipline in aligning expenses with revenue levels. In the near term, we are making more deliberate decisions about where we deploy capital and resources. While reducing expenses where we can. Our first quarter earnings performance, excluding net tariff refunds, demonstrates early progress toward this goal. Third, we are sharpening our focus on capital allocation. Cash flow and balance sheet strength to support debt reduction during FY 2027 while preserving our capacity to invest in growth, By bringing greater discipline to capital deployment, we are building upon our businesses proven cash generation capabilities. Next, I will offer some segment highlights for the quarter. In North America contract, first quarter sales declined year over year due in part to the timing of orders pulled forward late in fiscal 2025 that benefited sales in the first quarter of fiscal 26. Still, first quarter orders were softer than we expected. With trends varied across sectors, We had continued strength in insurance, financial and business services. Conversely, order patterns were soft in relation to last year, within the health care sector and with federal, state, and local government customers. Looking more broadly, we continue to operate in a dynamic environment and are navigating the recent trade developments between the U.S. and Canada. Now we manufacture in both countries, our supply chain touches both countries. We are being proactive on both sides of the border, and working closely with suppliers, customers and our own production teams to manage the flow of product, and make adjustments where we can. Our full year outlook includes the most up to date assessment of The US Canada tariff actions And based on that assessment, we estimate an approximate $0.07 per share impact from costs related to these new tariffs. Given this backdrop, we are managing expenses and production levels carefully while prioritizing investment in our most promising growth initiatives. Tariff refunds were also beneficial to help mitigate these pressures to our full year outlook. And Kevin will cover those details shortly. Over the last several months, I have spent considerable time with the North America contract team meeting with dealers and customers, and 1 message has come through very clearly. Strong partnerships are a competitive advantage in this business, and our brands benefit from deeply credible key target markets alongside differentiated product offerings. Our dealers and customers tell us they need 2 things from us. First, we need to continue to simplify the process of doing business with us. And second, we need to maintain and expand our leadership in product innovation. We are delivering on these needs by improving responsiveness, service levels, and operational execution while also accelerating our new product innovation clock speed. We continue to be optimistic in this business. Despite the demand softness we saw this past quarter, which varied by sector, Our internal forward demand indicators continue to point to healthy conditions across North America. Project funnel and funnel additions were up year over year, along with particularly notable growth in awarded contracts. Externally, Class A leasing in the U.S. continues to show strength with the latest 4-quarter net absorption in Class A buildings improving to the highest total since mid-2020. All of this suggests the order softness we experienced in the first quarter represents a timing issue rather than a structural slowdown, in general business conditions. Turning to international contract, we remain encouraged by the opportunities in this business. Although sales declined year over year reflecting difficult comparisons, in several markets, orders increased across most regions. Activity was particularly strong in Asia, the Middle East, and portions of Europe, Latin America. We saw healthy demand from financial services and private office customers along with strength in health care and technology. We remain focused on expanding and strengthening our international dealer network increasing engagement and improving alignment as we continue building our international business. During the quarter, our Asia Pacific team hosted dealers representing more than 20 countries and an event in Jakarta, Indonesia. Key leaders from across Munoz participated. Helping us strengthen relationships in the region and position us for further growth. Within the global retail segment, we delivered another quarter of sales and order growth. Together with meaningful year over year operating margin improvement even after excluding the net benefit from tariff refunds. While June and July had softer than expected sales and orders, performance strengthened significantly across channels and geographies in the month of August. For the first quarter, North America orders increased 7.5%, and this represents our eighth consecutive quarter of North America retail order growth. A key indicator of our ability to effectively navigate a challenging industry environment while advancing our long term strategy. During the quarter, we opened a DWR store in Raleigh, North Carolina, and Herman Miller stores, in Columbus, Ohio Saint Louis, Missouri; and San Antonio, Texas. And looking ahead, we expect to open 5 to 7 new stores during the second quarter and continue to plan for approximately 14 to 18 new store openings throughout fiscal 2027. Beyond expanding our physical footprint, the retail team is developing new ways to engage customers and build awareness of our brands. These initiatives are designed to reach more consumers across our target markets and included a DWR furnished home on Shelter Island, sponsorship of the summer celebration of the iconic glasshouse, and increased storytelling on social media with design partners. So with those brief opening comments, I will now hand the call over to Kevin who will provide additional details on segment financial performance and our outlook for FY 2027. Kevin J. Veltman: Thanks, Jess, and good morning, everyone. I will start with an overview of our first quarter results and segment followed by our outlook for the second quarter and full fiscal year. As Jeff mentioned, first quarter consolidated net sales were $923 million, down 3.4% on a reported basis and 3.3% lower. Consolidated orders for the quarter were $914 million, up 3.2% as reported and 3.5% on an organic basis. Our consolidated backlog was $669 million at quarter end. Down 3.1% from a year ago. First quarter reported gross margin increased 23 basis points to 41.7 and adjusted gross margin was 41.8%. The recognition of $16.5 million in refunds from the US government related to previously expensed IEPA tariffs contributed 180 basis points to the year over year increase. Excluding this benefit, adjusted gross margin improved 150 basis points over last year. Primarily reflecting pricing realization partially offset by inflationary cost pressure. Including variable incentive impacts, the net benefit of tariff refunds was approximately $0.11 of adjusted diluted earnings per share. Our quarterly supplemental slide deck posted on our Investor Relations website provides further detail of the dollar and margin impacts by segment. Adjusted earnings per share were $0.53 in the first quarter compared to $0.45 in the prior quarter. Excluding the net benefit from tariff refunds, adjusted earnings per share were $0.42. This reflects price realization and improved cost management partially offset by lower sales volume and inflation pressure. Turning to cash flow and capital allocation. We generated $49 million in cash from operations during the quarter and invested $33 million in capital expenditures. We ended the quarter with $580 million of available liquidity, Our net debt to EBITDA ratio was 2.75x as defined by our lending agreement. In July, our Board of Directors declared a quarterly cash dividend of $0.1875 per share. Payable on October 15 to shareholders of record on August 29, 2026. At an annual indicated dividend of $0.75 per share the yield is 3.7% based on yesterday's closing stock price. With that, I will move to our performance by segment in the first quarter. Net sales in the North America Contract segment were $506 million, down 5.3% on a reported basis and 5.2% lower organic primarily due to a challenging prior year sales comparison associated with the order pull forward in the fourth quarter of fiscal 2025 that we have discussed in prior quarters. Orders were $484 million, down 1.7% as reported and down 1.6% organically from the prior year despite a favorable orders comparison. As a reminder, we estimate that $55 million to $60 million of orders were pulled forward from Q1 FY 2026 to Q4 FY 25 related to tariff pricing actions. Reported operating margin was 9.4% and adjusted operating margin was 10.7%, down 70 basis points year over year. The decline primarily related to deleverage on lower sales and inflationary cost pressure partially offset by pricing realization and the net benefit from tariff refunds. International contract segment net sales were $157 million down 6.4% on a reported basis and down 6.2% organically year over year. Orders were $181 million, up 17.3% versus prior year on a reported basis and up 17.9% organically, which included a notable project win in South Korea. First quarter reported operating margin was 2.4% and adjusted operating margin was 4.6%, down 390 basis points compared to prior year. The decline primarily reflected deleverage on lower sales, showroom investments, and timing of sales events, as well as higher incentive compensation. In the global retail segment, net sales were $261 million, up 2.6% on a reported basis and up 2.8% organically. Segment comparable sales were flat and comp sales in North America grew 1.9%. Orders in the quarter improved to $249 million, up 4.3% year over year on a reported basis and up 4.7% organically. In North America, orders grew 7.5%, reflecting continued market share growth. Reported operating margin was 6.1% in the quarter, and adjusted operating margin was 7%, up 580 basis points year over year. The improvement included a 410 basis point net benefit from tariff refunds. The improvement also reflected pricing realization and cost savings, partially offset by planned investments in new store openings. Excluding the net tariff benefit, adjusted operating margin improved 170 basis points year over year as our priority to expand operating margins for this segment gains traction. Now let's turn to our Q2 and fiscal 27 full year outlooks. Which includes our most up to date estimates on inflation, tariffs, and related mitigation. For the second quarter of fiscal 27, we expect net sales of $972 million to $1.012 billion At the midpoint, this represents a year over year increase of approximately 4%. We expect gross margin of 38.3% to 39.3%. And adjusted operating expenses of $321 million to $331 million Adjusted diluted earnings per share are expected to be $0.43 to $0.49 This outlook includes estimates for the most recent U. S. And Canada tariffs. For the full year, with the lower than expected sales and orders in the first quarter, we reduced our expected net sales range to $3.88 billion to $4.03 billion reflecting 3% growth year over year at the midpoint. We are maintaining our expected adjusted earnings per share range of $1.85 to $2.15 This includes an estimated $0.07 per share of unfavorable impact from the most recent US and Canada tariff actions. I mentioned last quarter, in fiscal 27, from an operating expense perspective, our guidance continues to assume an estimated incremental new store expense of approximately $6 million per quarter on a year over year comparison. For all other details related to our outlook, refer to our first quarter results press release. With that, I will turn the call back over to Jeffrey. Jeffrey Stutz: Thanks for that, Kevin. Before we begin Q&A, I want to thank our teams around the world for their continued focus and commitment to delivering for our customers. We are making progress against our priorities to strengthen the business, and we remain focused on improving our operating performance creating long term value for our shareholders and serving our customers. So with those as opening remarks, we will now open the call for your questions. Operator: Thank you. We will now begin the question and answer session. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the QA roster. Your first question comes from Gregory Burns with Sidoti and Company. Please go ahead. Greg Burns: Good morning. So in the North American contract segment, you mentioned that you are kind of the internal funnel metrics remain positive. Some of the market dynamics also, I think, still constructive for demand. Why just maybe give us a little bit more color on why that did not maybe translate to a stronger quarter this in the first quarter? Jeffrey Stutz: Hey, Gregory. Good morning. I will turn things over to John, and he can cover kind of his take on this. Maybe just would reiterate that you we certainly are seeing in the background, continued supportive, indicators inclusive of corporate profitability, the class a leasing commentary that we offered, we think is bullish. You know, CEO confidence has been relatively resilient. And so those are those are supportive. We have internal metrics that I highlighted in my prepared remarks. I think our issue is more of some of the resilient sectors that we have seen strength in. Just had a down quarter, and that happens in a project driven business But I will let John unpack that further. John Michael: Thanks, Jeffrey. Hi, Gregory. Yeah, to tag on what Jeffrey said, I think overall when we look at the indicators, they are positive. I mean, I am looking at 6 the 6 that we look at on a regular basis are all pointing in the right direction. I will say the reports from the from the sales organization are that customers seem to be taking a little bit longer to convert from awarded project to orders. And we see that in our indicators as well. We think there is a couple things driving that Certainly, there is at the at the state and local level, which is part of our public sector group, We see some uncertainty and some hesitation probably related to the midterms that are around the corner. From a federal government perspective, a lot of activity in key agencies, but certainly some of the agencies that experienced some of the downsizing and whatnot over the last 12 to 18 months have been a little slower to return. Than normal. And in our health care sector, a very positive outlook, but a little bit of a pause during the quarter. Really based on the timing of projects. Greg Burns: Okay. So the outlook for the year, I mean, you still expect growth from North American contract this year even with the soft first quarter? John Michael: We do. Yeah. The forecast for the balance of the year shows growth. But obviously, we are we are a little bit behind after the first quarter, but the teams are working hard to catch that up. Greg Burns: Okay. And then in terms of the global retail store expansion, efforts, you just maybe give us a little color on the sales and margin contributions from stores that have been open for a year, just to give us a sense of kind of what kind of returns you are getting from maybe some of the more mature stores that have been in market for a little while? Debbie F. Propst: Hi, Gregory. Thanks for the question. This is Debbie. So the great news is that the cohort of stores that we opened in the back half of FY 26 through f y 20 let's say or through the back half of f FY 25 and all of FY 26 are really showing progress and getting to a point where we will have profitability out of those stores in FY 27. Greg Burns: Okay. And they are performing to, like, where you expected them to be from, you know, maybe a rev revenue and margin contribution at this point? Debbie F. Propst: Yep. We are seeing the second, the first comp year. Ramp actually a little bit more than we expected. So what we have seen through the store growth strategy is a little bit of a softer initial ramp for DWR than we initially performed, but the second year, actually showed more progress. So we are we remain committed to our store growth strategy. And we like the economics and the progress that we are seeing. Greg Burns: All right. Great. Thank you. Operator: Your next question comes from Reuben Garner with Stifel. Please go ahead. Reuben Garner: Thanks. Good morning, everybody. Jeffrey Stutz: Thanks. Reuben Garner: A follow-up on the North American contract piece. Can you give us some insight on the cadence in the quarter? Did it did it slow as the quarter moved on? Was there kind of a moment where there was a pause and we have since had a recovery? I mean, what is what is September kinda look like so far? And just kind of thoughts on the progression in order patterns? Kevin J. Veltman: Yeah. Ruben, this is Kevin. Let me talk you through that. So within the quarter, we saw generally improvement as the quarter went on, particularly in August for NAC, as well as the overall business. August was a growth quarter year over year. And then as we look through the first 3 weeks of September, we are up 9% in orders year over year and that is growth across each of our 3 segments as well right now. Reuben Garner: Okay. Greg. Very encouraging. And then on the in your outlook, can you talk about what you have assumed from a price cost standpoint? And how you guys have handled kind of the latest round? Obviously, steel has kind of trended up through the year. Diesel's moved higher. what is what is the latest price increase, or surcharges or any other kind metrics, you look at to offset these factors and what is kind of embedded for the full year from a price cost standpoint? Kevin J. Veltman: Yeah, Ruben. In the first quarter, maybe to set the stage, as you may recall, recall, we talked last quarter about some pricing actions that we took back in April across our retail in North America contract, in particular. And so those actions have been flowing through in the in the first quarter. Inflation ramping up, but frankly, it ramped up a little bit slower than we expected during Q1. But to your question, it is still very real. And so we had, price cost as we look at it was slightly favorable in Q1. We expect as inflation ramps up while our pricing actions are also ramping up, we expect it to be a slight headwind, call it 20 percent 30 basis points year over year in the second quarter. And it is the things you talked about, oil continuing to remain close to $100 and the derivative effects of that. Okay. Great. Or a follow-up. Maybe the other point I would make is we are following the playbook we have done, whether it is tariffs or other inflation. We are following the playbooks we have used in the past to work our way through. Jeffrey Stutz: Yeah. Ruben, this is Jeffrey. I have you had asked about what, what kind of pricing actions Kevin agreed with. I think Kevin said I might add to that, you know, we had not done a surcharge action for the international contract business. That has been the latest pricing action is actually effective earlier this month and, average of about 4%. So that should layer into our results going forward. And then Kevin said, we are we are following what had what has become a relatively familiar playbook for the business, but as specifically as it relates to Canada, tariff, we are we are well, we are pulling out as many stops as we can, including you know, pulling component inventory, in the inventory ahead of the implementation date. Customer order timing, trying to trying to get in front of that wherever possible. We are working really hand in hand with our key suppliers on some sharing arrangements and leveraging dual supply wherever we see the opportunity. Know, supplying component parts or, in some cases, finished goods. From, you know, outside of the tariff regime. Regions around the world. So we are we are again, these are all actions that we are familiar with from past experience, but these are things we are we are we are pursuing with vigor. Reuben Garner: Got it. And that is a good lead in to my last question. Margin performance and the outlook is really strong, even excluding the tariffs this quarter. Can you discuss the cost actions that you have taken to date and how much is kind of how much drove the outperformance this quarter and then, you know, what you have going forward, how much visibility do you have if revenue does not accelerate, Is there a dollar amount or any kind of quantification that you can give us on the moves you have you have been making that can drive kind of performance to meet or even exceed your outlook without kind of help from the top line? Jeffrey Stutz: Yeah, Ruben. This is Jeffrey. I will give you some high level perspective on, kind of under the heading of our, focus on cost discipline. And Kevin, you can fill in any additional color you see fit. You know, this is really I mentioned this last quarter. This is really an enterprise wide effort to and it is really about making smarter, deliberate choices on where we spend. I mentioned, I think, on the call last quarter that you know, this all it really all ties into some of the priority setting that you have heard us talk about, the idea that, you know, recognizing we do all kinds of things incredibly well at Miller Knoll, but we cannot do everything, and so we have to be smart about and choiceful about where we you know, put our resources. And so and that includes the focus on expense on all expense lines. So we are really we have tasked our teams to, really make that evaluation. We are also include that is that touches on the SG&A side of the business, but it also touches on cost of goods sold. Our supply management team continues to do incredible work with our supply base, and finding opportunities to reduce the water level on cost of goods sold. We are evaluating manufacturing capacity. We have already made moves in that in that category, which we have outlined for you in past calls. But just to remind you, we have closed 2 plants. We are in the process of closing, our third here in West Michigan. And there are longer term opportunities to consider other actions. Down the line, and we are we are certainly evaluating all of those things. So that is just a little kind of context to it. We are this is a ground up review on the part of the organization. And, you know, as we move forward, we will certainly unpack more details on that for you. I will I will say and maybe Debbie, you can feel free to talk about this. 1 of the actions we took this quarter that is reflected in the in the special charge line items or the restructuring line items relates to some, workforce reductions and some reorganization we did with the Holly Hunt brand. So, Kevin or Debbie, please feel free to chime in with some additional color. Kevin J. Veltman: Yeah, maybe overall and Debbie can share a little bit more on Holly Hunt, which this would be included in this. As we look at our OpEx bridge, there is $3 million to $5 million of savings reflected in that bridge. Obviously, we have talked about the other things. You have standard wage package and the new stores. That is helping the fund, but that is about what was flowing through when we look year over year of which some of the target things that Holly Hunt as we look at the performance improvement opportunities in that business. Debbie F. Propst: Yeah, we are working very quickly to improve the outlook of that particular business. And was pleased to see the business from an order trend perspective return to growth in Q1 after 4 consecutive quarters of decline. Some of the restructuring elements that we have been working on we talked in the last call about some of the leadership adjustments that we had made. And obviously, we will have the wrap end effect of some of those cost savings throughout the course of the year. We are also looking at our overall corporate footprint supporting that entity. And making adjustments there to right size the corporate footprint, as well as looking at showroom rest rationalization. This quarter, we will be closing our Minneapolis showroom and moving to an outside sales rep structure in that market. So those are a few of examples of work that has happened thus far. Reuben Garner: Great. Thanks for the detail, guys. 1 quick follow-up. That $3 million to $5 million, Kevin, was that what you saw in the first quarter on a year over year basis? And was that specific to Holly Hunt? Kevin J. Veltman: Or was that broadly That was across the business, which would have been included in Holly Hunt, Reuben. Reuben Garner: Got it. Alright. Thank you, guys, and good luck going forward. Jeffrey Stutz: Thank you. John Michael: Thanks, Ruben. Operator: Your next question comes from Philip Lee from William Blair. Please go ahead. Philip Lee: Good morning, guys. Thanks for the question. So you slightly brought down your sales guide for the year. Can you provide a bit more color on what specifically you are seeing in NAC and Global Retail that is giving you that additional caution? You think it is more of a temporary deferral or a choppy macro? Or do you think it is potentially a more structural hit here? And then what is your degree of confidence this is the right outlook now? Assuming that macro remains at status quo. guess any quantification on what you are seeing in terms of the contract pipeline or second quarter to date retail trends would be helpful here. Thank you. Jeffrey Stutz: John, why do not you start us off and, Debbie, you can chime in. John Michael: Yeah. I think in terms of the pipelines, from a contract perspective, it is encouraging. I think we have seen what is been interesting for the last 30 to 60 days is the activity talking to our dealer network, the activity is still very robust. Some of the projects are larger and as a result they take a little longer to come to fruition. And I would say in the immediate past we have seen a lot of activity in smaller projects. So it requires, right, a similar amount of effort from dealer processing perspective, but the size of the projects have been a bit smaller. So we are really seeing customers in kind of 2 groups. Those that did some retooling of their workplace previously and are making some modest adjustments to it. And then some others that have waited and now realize that they have some significant work to do, over the next 6 to 12 months to make sure the workplace is ready for the future of work. As you have seen in the headlines, a lot of the larger organizations are bringing their workforces back to workforce 4 or 5 days a week. And I think in the over time, that bodes well in terms of the project activity that we will see. Debbie F. Propst: From a global retail perspective, the change in our full year outlook is largely reflective of our soft June and July and not feeling like we can make up that softer than expected revenue. And that softness in June and July, those are typically our softest months of the year, largely driven by web and in particular, our outdoor category. Where we are missing some inventory due to the PFAS regulations. That is subsequently in a much better position. And we saw a very strong August around the globe, but in particular in our North American comp. Where we outpaced the prior 5 or so months in terms of comp trends. And quarter to date, we are also seeing strength And the back half of our year is forecast based more or less in line with what we are seeing right now. Philip Lee: Okay. Very helpful. And just maybe doubling down then on the global retail side. If there was a lot of noise during the quarter between macro pressures and then changes in the digital marketing landscape. So I guess just from what you are seeing from an underlying fundamentals perspective, we should see, I guess, an acceleration in trends from maybe the first quarter as we go through. Is that reasonable? And then I guess just from a contribution from the new stores entering the comp base, I guess, how do you think about that here going through the second half of the year, remainder of the year? Debbie F. Propst: All right. there is a lot in that question. So let me make sure I capture So from a shifting digital landscape I think that is the first thing you mentioned. Philip, what you are referring to is obviously the rapid increase in AI search and I think some of the shift in the price of digital as a result of Google shift to AI mode. We are definitely seeing increased digital advertising costs. As such, in August, we leaned more heavily into our direct mail distribution, and we will continue to do that. Throughout the balance of the year, particularly because of the upcoming midterms. Likely driving up digital marketing costs more as well. But we are very focused on making sure that we meet our customer where they are. And moving very quickly to evolve our digital product road map and our brand marketing strategies to ensure that we get the best results. We can out of AI search. We feel like the heritage of our brands and the authenticity of our brands well positions us to speak to both humans and machines in the appropriate ways to drive traffic and progress in our business performance. And we have seen significant rebound of our web performance in August and into this month as well as we eliminated some of that inventory issue noise. As it pertains to the new stores, as I mentioned already, we are, you know, excited that we are gonna be getting OI in the global retail segment in FY 27 from the new stores that opened in 2025 and 2026. And in light of the changing digital customer journey, I think our store growth strategy becomes more important than ever. And our store comp performance in North America in Q1 was in line with Q4, but continues to be a real driver of our overall success as well. Philip Lee: Again, thank you. Debbie F. Propst: Yeah. No. You got it all. Philip Lee: I appreciate it. And then just 1 quick last 1. Just as you kind of see improving profitability in the business, through cost savings and the retail ramp. And then you have spoken about focusing on expansion for the Herman Miller store base, which requires less upfront capital. Assuming that free cash flow should really improve here. How are you thinking about capital allocation? Any kind of changes to your thoughts going forward, especially just around debt pay down? Kevin J. Veltman: Yes, Philip, this is Kevin. I will cover that. So cap allocation, our priorities remain the same. Invest in those growth opportunities to the point we are continuing to look at where are the opportunities that we believe generate the strongest returns so that the mixture and leaning into those Herman Miller stores is a good example of that. Paying down debt is our second priority. And we were at 2.75 from a net debt EBITDA. From a covenant perspective this quarter, we were at 2.8 last quarter. And then maintaining the dividend and being opportunistic on share repurchase would round out the priorities. Philip Lee: Excellent. Thank you all. Best of luck. Kevin J. Veltman: Thanks, Philip. Operator: Your next question comes from Linda Bolton Weiser with Water Tower Research. Please go ahead. Analyst: Yes. Thank you. Hi. So I was just curious about a little more explanation on the international contract profitability. You talked about all the things you are doing to improve profitability, and it is evident in the North American contract segment. But international seems to be going the wrong way on a longer term. In the last few years, you have had modest revenue growth there, and yet the operating margin seems to be declining. So can you just explain a little bit more what impacted that margin and why the decline in the last few years? And then sort of what are the factors that are going to improve it kind of going forward? Thanks. Jeffrey Stutz: that is a great question. This is Jeffrey. I will I will start, and, Kevin, welcome. Any additional comments you have? Yeah. The we have been really working hard to try to try to bring more balance to the overall product mix that is sold through our international contract segment. Know, historically, that business has really indexed very heavily into task seating. Which is really good because in an as an individual product category, it is, it is high profit, which is really good for us. And we wanna continue to do that, and we are doing that. We are focusing very heavily on that. But we are also recognizing the importance of, of finding ways to pull through other categories of furnishings because that is how you have access to larger project opportunities. That will then bring excuse me, carry with it profitable, you know, seating and ancillary products. And so part of the answer is we have seen a bit of a pivot toward some other relatively lower gross margin product categories, but with the with the broader goal in mind of driving, improved top line performance and more profit dollars over time. As opposed to just the percentage. So some of it is a product mix. And I will also be remiss if I did not highlight the fact that we are we are we are seeing cost inflationary pressures in that business and have been for some time like everywhere in the company. Energy prices have put a real pinch on all manner of businesses across our international contract markets. And so that is played a role as well. And, the last thing would be, again, we have regional shifts and mix that, well, on 1 hand, you may pick up production volume in 1 part of the of the world, where you have a manufacturing presence. It may shift in fact, has shifted away from other areas where we maintain fixed overhead in terms of manufacturing. And then you lose some overhead leverage in that instance. And that is particularly been true, across our factories in Europe. So those are some initial thoughts. I do not know, Kevin, if you would add anything. Kevin J. Veltman: I think I would just add the comment that international is definitely project based and moves around from quarter to quarter, whether it is the mix of the product, in the projects or which regions we are having activity. This quarter was a good example. So the operating margins this quarter were tied to the lower order levels and backlog going into the quarter. But then as you saw in our order numbers, up almost 18% for the quarter, and the kind of volume that will flow through. it is in a it is in a Asia Pacific is a good region for us as well. And so you will see that move around from time to time. There are a few other things unique to this quarter. We have a new showroom that we are opening up in Mexico City, so you have some initial cost to get that ramped up. We had the timing of some sales and marketing events. 1 of the significant opportunities we see internationally is our share of wallet is lower than it is in North America contract as we expanded to some of the new product categories that Jeffrey was talking about. And so training folks on those and then expanding our dealer relationships in certain faster-growing regions. And so some of those sales and marketing events were tied to the opportunities that we see there. Analyst: Okay. Thank you. that is all for me today. Thank you very much. Jeffrey Stutz: Thank you. Operator: There are no further questions. We will now turn the floor back to Vice President of Investor Relations, Wendy Watson, for any closing remarks. Wendy Watson: Thank you all for joining us today. We look forward to speaking to you again next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in MillerKnoll, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MillerKnoll wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $395,625!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,397,147!* That performance is why people listen. 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MLKN Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

MILAN — MillerKnoll trimmed its fiscal year guidance amid a challenging macroeconomic climate and rising energy prices. The Zeeland, Mich.-based firm — which operates Knoll, Herman Miller, online platform Design Within Reach and Holly Hunt, Copenhagen-based design firm Muuto and textile firm Maharam — said it expects revenues in the range of $3.88 billion to $4.03 billion for the year. That compares to a previous estimate of $3.93 billion to $4.13 billion. More from WWD Storied Jeweler Mattioli Eyes Global Expansion With Milan Flagship Opening The Frankie Shop Opens First Milan Flagship as It Eyes Global Growth Annamaria Brivio Is Taking Her Biggest Step Yet The revision was released along with the company’s fiscal first-quarter earnings. In the three-month period ended Aug. 31, MillerKnoll saw sales fall 3.4 percent to $923.4 million. This was dragged down by net sales of its contract business, which dipped 6.4 percent to $156.8 million year-over-year, though forecasts were positive in the first months of the second quarter. “We are managing expenses and production levels carefully,” interim chief executive officer Jeff Stutz said during a conference call with analysts. “This is really an enterprise-wise effort to make smarter deliberate choices on where we spend…that includes a focus on all expense lines,” he said, explaining that the company is optimizing its manufacturing capacity. MillerKnoll has also been busy optimizing its work force. In May, Holly Hunt president Marc Szafran and executive creative director Joannah Kornak left the business. And press reports said multiple managers and employees were also laid off. In the first quarter, MillerKnoll improved its cash flow from operations of $49.1 million, compared to $9.4 million in the prior year. On a positive note, the company’s operating income received a roughly $10 million increase from tariff refunds. That helped push adjusted operating income up to $65.7 million from $60.1 million a year earlier. MillerKnoll’s board also declared a quarterly cash dividend of $18.75 cents per share. The company remains in flux after the June 2 news that Andi Owen — who joined Herman Miller in 2018 and oversaw the $1.8 billion merger of Herman Miller and Knoll in 2021 — was stepping down as CEO. Owen handed over the reins at a crucial moment in the group’s history. MillerKnoll, which is listed on Nasdaq, saw its shares sink to a five-year low in November 2025, as the company endured a period marked by macroeconomic headwinds caused by U.S. President Donald Trump’s trade policy, inflation and rising shipping costs. Looking ahead to the fiscal second quarter of 2027, the company expects $972 million to $1 billion in sales. In the near term, market watchers will likely eye the performance of the firm’s international contract business closely. “We’ve been really working hard to try to bring more balance to the product mix that is sold through our international contract segment,” Stutz assured analysts, adding that the company is focused on expanding its product mix to take advantage of new opportunities. “As an individual product category, it’s high profit.” Sign up for WWD's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.