Less revenue, more profit: MillerKnoll has opened fiscal 2027 with a distinctly two-sided quarter. Net sales for the three months through late August declined 3.4 percent to $923.4 million, or 3.3 percent organically. Yet the US design and contract furniture group made considerably more money on those lower sales.
Net earnings attributable to MillerKnoll reached $26.6 million, while diluted earnings per share increased from $0.29 to $0.38. Adjusted EPS rose to $0.53 from $0.45. Gross margin improved even more visibly, climbing from 38.5 to 41.7 percent. That is the stronger half of the report: MillerKnoll is selling less, but extracting substantially more profit from those sales.
The improvement did receive some outside help. During the quarter, refunds of previously paid US tariffs increased operating earnings by approximately $10 million. The benefit amounted to $0.11 per share and added 110 basis points to operating margin.
Demand remains subdued in the group's most important segment, North America Contract. Sales declined 5.3 percent to $505.6 million, or 5.2 percent organically. Orders were also down, falling 1.7 percent as reported and 1.6 percent organically. Operating margin slipped from 10.7 to 9.4 percent. Sales, orders and operating margin were therefore all below the prior-year level.
The picture becomes more interesting internationally. International Contract generated $156.8 million in sales, down 6.4 percent. Orders, however, moved sharply in the opposite direction: up 17.3 percent as reported and 17.9 percent organically. Revenue and incoming business are therefore telling different stories. At minimum, the order figures point to a healthier pipeline for the quarters ahead.
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Less revenue, more profit: MillerKnoll has opened fiscal 2027 with a distinctly two-sided quarter. Net sales for the three months through late August declined 3.4 percent to $923.4 million, or 3.3 percent organically. Yet the US design and contract furniture group made considerably more money on those lower sales.
Net earnings attributable to MillerKnoll reached $26.6 million, while diluted earnings per share increased from $0.29 to $0.38. Adjusted EPS rose to $0.53 from $0.45. Gross margin improved even more visibly, climbing from 38.5 to 41.7 percent. That is the stronger half of the report: MillerKnoll is selling less, but extracting substantially more profit from those sales.
The improvement did receive some outside help. During the quarter, refunds of previously paid US tariffs increased operating earnings by approximately $10 million. The benefit amounted to $0.11 per share and added 110 basis points to operating margin.
Demand remains subdued in the group's most important segment, North America Contract. Sales declined 5.3 percent to $505.6 million, or 5.2 percent organically. Orders were also down, falling 1.7 percent as reported and 1.6 percent organically. Operating margin slipped from 10.7 to 9.4 percent. Sales, orders and operating margin were therefore all below the prior-year level.
The picture becomes more interesting internationally. International Contract generated $156.8 million in sales, down 6.4 percent. Orders, however, moved sharply in the opposite direction: up 17.3 percent as reported and 17.9 percent organically. Revenue and incoming business are therefore telling different stories. At minimum, the order figures point to a healthier pipeline for the quarters ahead.