MLKN — MillerKnoll, Inc.

Summary of MillerKnoll, Inc. Q3 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): $0.43, down from $0.44 year-over-year.
• Consolidated Net Sales: $927 million, a 5.8% increase year-over-year; organic growth was 3.8%.
• Orders: $932 million, up 9.2% reported and 7.2% organically.
• Consolidated Backlog: $712 million, up 3.7% from the previous year.
• Gross Margin: Increased 20 basis points to 38.1%.
• Cash Flow from Operations: $61 million; debt reduced by $41 million, resulting in a debt to EBITDA ratio of 2.75x.
• Quarterly Dividend: Declared at $0.1875 per share, yielding 3.9% annually.

2. Strategic Updates and Business Highlights

• North America Contract Segment: Net sales of $489 million, up 4.4%; orders increased 13.1%. Strong gross margins and operating income were noted.
• International Contract Segment: Net sales of $157 million, up 7.8%; however, orders decreased 0.7% due to lower orders in Latin America and the Middle East.
• Global Retail Segment: Net sales of $281 million, up 7.1%; comparable sales growth of 5.5%. New store openings included locations in Fort Worth, Pittsburgh, and Phoenix, with plans for 14-15 new stores by year-end.
• Marketing Initiatives: Successful campaigns and collaborations, including a partnership with Tracee Ellis Ross, generated significant media impressions.

3. Forward Guidance and Outlook

• Q4 Net Sales Guidance: Expected between $955 million and $995 million, with a midpoint of $975 million, reflecting a 1.4% year-over-year increase.
• Gross Margin Projection: Anticipated to range from 37.5% to 38.5%.
• Adjusted EPS Forecast: Expected between $0.49 and $0.55 per share, factoring in an estimated $8-9 million impact from the Middle East conflict.
• Operational Expenses: Projected to be higher due to increased compensation, new store costs, and foreign exchange impacts.

4. Bad News, Challenges, or Points of Concern

• Impact of Weather: Severe weather conditions affected retail traffic and operations, leading to lower sales.
• Middle East Conflict: Ongoing geopolitical tensions are expected to disrupt sales and increase logistics costs, with a direct earnings impact anticipated.
• Cost Pressures: Potential increases in costs for plastics and other materials due to rising oil prices were noted, although not yet realized.
• Volatility in Orders: Some segments, particularly International Contract, experienced order fluctuations due to regional instability.

5. Notable Q&A Insights

• Weather Impact: The severe winter weather significantly affected retail traffic and operations, primarily impacting the North America Retail segment.
• Cost Pressures: Management is closely monitoring rising costs related to oil and logistics, with plans to adjust pricing strategies if necessary.
• Consumer Resilience: Despite rising prices, the premium consumer segment remains strong, with continued demand observed.
• Government Contracts: Activity in the federal government sector has slowed due to geopolitical issues, but some projects are still progressing.
• Tech Sector Activity: Robust demand from the technology sector, particularly in growth areas like the Bay Area, was highlighted, indicating sector-specific growth opportunities.

Overall, MillerKnoll demonstrated solid performance in Q3 2026, with growth across segments despite facing external challenges. The company remains optimistic about its strategic initiatives and market positioning, while also preparing for potential headwinds in the upcoming quarter.