MillerKnoll, Inc. ((MLKN)) has held its Q4 earnings call. Read on for the main highlights of the call.
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MillerKnoll, Inc. recently held its earnings call, reflecting a strong financial performance in Q4. The company reported significant growth in its North America Contract and International segments, alongside successful retail and product expansion. However, challenges such as tariff costs and order pull-forward effects were noted, which may impact future performance. Despite these hurdles, MillerKnoll is well-positioned with robust liquidity and strategic growth plans.
Strong Q4 Financial Performance
MillerKnoll reported adjusted earnings of $0.60 per share, significantly outperforming the midpoint of guidance. The company achieved consolidated net sales of $962 million, marking an 8.2% increase on a reported basis and 7.8% organically. This strong performance underscores the company’s effective strategies and operational efficiencies.
Growth in North America Contract Segment
The North America Contract segment saw net sales for the quarter reach $496 million, up nearly 13% from the same quarter a year ago. New orders in this period were $568 million, reflecting growth of almost 16% over the previous year, highlighting the segment’s robust demand and market presence.
International Market Strength
MillerKnoll’s international market also demonstrated strength, with net sales improving to $186 million, up 6.9% on a reported basis and 5.5% organically year-over-year. The European markets, in particular, showed strong sales and order growth, contributing to the company’s global expansion efforts.
Retail Expansion and New Products
The company opened four new retail stores in fiscal 2025 and plans for 10 to 15 more in fiscal 2026. Additionally, over 30 new products were introduced across various brands, showcasing MillerKnoll’s commitment to innovation and market expansion.
Increased Liquidity and Debt Management
MillerKnoll ended the quarter with $576 million in liquidity, reducing long-term debt by $5 million and extending credit facility maturities to 2030. This financial strategy enhances the company’s stability and capacity for future investments.
Tariff-Related Challenges
Tariff-related costs impacted the Q4 gross margin, with an estimated $7 million drag. These costs are expected to reduce Q1 earnings by $9 million to $11 million before tax, posing a challenge to the company’s profitability.
Impact of Order Pull-Forward
An estimated $55 million to $60 million in demand was pulled forward in the North America Contract segment ahead of a tariff surcharge and price increase, potentially affecting future order growth. This shift indicates a strategic response to anticipated market changes.
Retail Segment Margin Pressure
The retail segment experienced margin pressure, with an operating margin of 5.3%, down from 6% last year. This decline was due to new store opening costs and an unfavorable product mix, impacting the segment’s profitability.
Forward-Looking Guidance
Looking ahead to fiscal 2026, MillerKnoll projects Q1 net sales between $899 million and $939 million, with an expected EPS impact from tariffs of $0.09 to $0.11. The company plans to open 10 to 15 new stores in the U.S. and aims to offset tariff impacts with pricing actions by the second half of the fiscal year. These strategic plans highlight MillerKnoll’s proactive approach to navigating future challenges.
In summary, MillerKnoll’s earnings call showcased a strong financial performance in Q4, with notable growth in key segments and successful retail expansion. Despite facing challenges such as tariff costs and order pull-forward effects, the company remains well-positioned with strong liquidity and strategic plans for future growth. Investors and market enthusiasts will find MillerKnoll’s proactive strategies and robust performance encouraging as the company navigates the evolving market landscape.