MillerKnoll, Inc. Reports Strong Start to Fiscal 2026

MillerKnoll, Inc. ((MLKN)) has held its Q1 earnings call. Read on for the main highlights of the call.

MillerKnoll, Inc. has kicked off fiscal 2026 with a robust performance, showcasing significant revenue and EPS growth, alongside successful expansion strategies and new product launches. Despite facing challenges such as tariff impacts, order declines, and pressures on retail profitability, the company remains optimistic about its future growth and mitigation efforts.

Strong Revenue and Earnings Growth

MillerKnoll reported a remarkable increase in consolidated net sales by 10.9%, reaching $956 million. The adjusted EPS also saw a substantial rise of 25% compared to the previous year, significantly surpassing expectations. This growth highlights the company’s strong financial performance and strategic execution.

North America Contract Segment Performance

The North America Contract segment experienced a 12% increase in net sales, with the operating margin improving to 10.7% from 3.4% the previous year. This improvement underscores the segment’s robust performance and efficient operational management.

Retail Expansion Strategy

MillerKnoll expanded its retail footprint by opening four new stores in North America in Q1, with plans to open 12 to 15 new stores throughout the fiscal year. Retail net sales increased by 6.4%, reflecting the company’s commitment to growing its retail presence.

Innovation and Product Development

The company launched new products, including an electrostatic discharge version of the Aeron chair, contributing to over 20% growth in new product orders during the quarter. This innovation highlights MillerKnoll’s focus on product development and market responsiveness.

Leadership Transition and Recognition

John Hoke was announced as the new board chair, and MillerKnoll was recognized as a great place to work and a best workplace for innovators. These accolades and leadership changes are poised to strengthen the company’s strategic direction.

Tariff-Related Impacts

Tariff-related impacts amounted to approximately $8 million in the first quarter, affecting the gross margin. These impacts are expected to persist through the first half of the fiscal year, posing a challenge to the company’s financial performance.

Decline in New Orders

Consolidated new orders decreased by 5.4%, with a notable 8% decline in North America Contract orders due to prior quarter’s pull-forward activity. This decline indicates potential challenges in sustaining order momentum.

Retail Segment Profitability Challenges

The retail segment faced profitability challenges, with the operating margin decreasing to 0.6% from 2.2% last year. This decline was impacted by new store opening costs, increased freight expenses, and higher tariff-related impacts.

International Market Challenges

The international contract segment saw a 6.5% decrease in orders, primarily due to lower demand in the APMEA and Latin America regions. This highlights the challenges MillerKnoll faces in its international markets.

Forward-Looking Guidance

For the second quarter of fiscal 2026, MillerKnoll anticipates net sales ranging from $926 million to $966 million and adjusted EPS between $0.38 and $0.44 per share. Despite tariff-related challenges, the company expects to mitigate these costs by the second half of the fiscal year. Additionally, MillerKnoll plans to open 12 to 15 new stores in the U.S. throughout the fiscal year, aiming to significantly expand its retail footprint.

In summary, MillerKnoll, Inc.’s earnings call reflects a strong start to fiscal 2026, with impressive revenue and EPS growth, strategic expansion, and product innovation. While challenges such as tariff impacts and order declines persist, the company’s forward-looking guidance and mitigation strategies demonstrate optimism for continued growth.