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    MLKN
    Earnings call· May 2026(Q4 FY26)

    MILLERKNOLL Q4 FY26 earnings call MLKN

    Jun 24, 2026 Source

    Executive summary

    MillerKnoll Q4 FY26 — Steady Growth and Strategic Shifts for FY27

    MillerKnoll delivered steady top-line growth and met EPS expectations in Q4 FY26, driven by strong North America Contract and Global Retail performance. Management is focused on enhancing operating and cost discipline, strengthening the balance sheet through debt reduction, and improving cash flow, while strategically expanding its retail footprint with smaller, more efficient store formats.

    Highlights

    5

    • Consolidated net sales reached $1 billion, up 4.4% year-over-year and above guidance.

    • Adjusted EPS of $0.55 was at the top end of the guidance range.

    • North America Contract segment sales grew 6.9% reported and 6.7% organically.

    • Global Retail segment sales increased 5.5% reported and 4.5% organically, gaining market share.

    • Consolidated orders, adjusted for prior year pull-forward, were down only approximately 1% year-over-year.

    Concerns

    5

    • Consolidated orders were down 6.3% reported (6.9% organic) due to a prior year pull-ahead of $55M-$60M.

    • International Contract sales declined 3.8% reported (5.8% organic) impacted by global geopolitical concerns and macro uncertainty.

    • International Contract adjusted operating margin decreased 470 basis points year-over-year.

    • Global Retail adjusted operating margin was down 110 basis points year-over-year, reflecting new store investments and Holly Hunt underperformance.

    • Net debt-to-EBITDA ratio ticked up slightly to 2.8x at quarter end.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q1 FY27 Net Sales
    $928 million to $968 million
    high materiality
    High
    Q1 FY27 Gross Margin
    38.7% to 39.7%
    medium materiality
    High
    Q1 FY27 Adjusted Operating Expense
    $316 million to $326 million
    medium materiality
    High
    Q1 FY27 Adjusted EPS
    $0.33 and $0.39 per share
    high materiality
    High
    Full-year FY27 Net Sales
    $3.93 billion to $4.13 billion
    high materiality
    High
    Full-year FY27 Adjusted EPS
    $1.85 to $2.15
    high materiality
    High
    Full-year FY27 EPS Cadence
    Approximately 40% in H1 and 60% in H2
    low materiality
    Medium
    FY27 Incremental New Store Expense
    Approximately $6 million per quarter
    medium materiality
    High
    FY27 Incremental Incentive Compensation Program Cost
    Approximately $25 million
    medium materiality
    High
    Midterm Net Debt to EBITDA Ratio
    2.0x to 2.5x
    high materiality
    High
    FY27 Herman Miller Store Openings
    9 to 11 stores
    medium materiality
    High
    FY27 DWR Store Openings
    5 to 7 stores
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    North America Contract
    Sales accelerated, driven by volume leverage and price capture. Orders were down due to a prior-year pull-ahead of $55M-$60M. Adjusted operating margin expanded 40 bps YoY.
    Orders: $511 millionOrders YoY: down 10% reported and organicOrders YoY (adjusted for pull-forward): essentially flat
    		$530 million6.9% reported, 6.7% organically—8.2% operating margin, 10.4% adjusted operating margin
    International Contract
    Sales and orders impacted by global geopolitical concerns, particularly in parts of Europe, UK, and Latin America, partially offset by strength in China and India. Adjusted operating margin down 470 bps YoY due to deleverage, regional sales mix, FX, and timing of program spend.
    Orders: $173 millionOrders YoY: down 8.7% reported, 10.6% organically
    		$179 milliondown 3.8% reported, 5.8% organically—7.5% reported operating margin, 8.2% adjusted operating margin
    Global Retail
    Gained market share. Adjusted operating margin down 110 bps YoY due to planned investments in new store openings and underperformance of Holly Hunt brand.
    Comparable sales: increased 3.6%Comparable sales in North America: increased 4.2%Orders: $288 millionOrders YoY: up 2.8% reported, 2% organicNorth America orders YoY: grew 8.7%
    		$295 million5.5% reported, 4.5% organically—4.6% operating margin, 5.4% adjusted operating margin

    Operational metrics

    22
    Consolidated Net Sales
    $1 billionup 4.4% YoY reported
    Q4 FY26

    Above guidance.

    Consolidated Adjusted EPS
    $0.55compared to $0.60 in same quarter last year
    Q4 FY26

    At the top end of guidance range.

    Full Fiscal Year Net Sales
    $3.8 billion
    FY26

    Company-wide net sales for the full fiscal year.

    Full Fiscal Year Adjusted EPS
    $1.86
    FY26

    Company-wide adjusted EPS for the full fiscal year.

    Consolidated Orders
    $972 milliondown 6.3% reported
    Q4 FY26

    Impacted by prior year order pull-ahead.

    Consolidated Orders (adjusted for pull-forward)
    down approximately 1%YoY
    Q4 FY26

    Adjusted for $55M-$60M prior year pull-forward in North America Contract.

    Consolidated Gross Margin
    39.4%increased 20 basis points
    Q4 FY26

    Year-over-year increase.

    Total Debt Reduction
    $15 million
    Q4 FY26

    Reduced total debt by this amount in the quarter.

    Liquidity
    $572 million
    Q4 FY26

    Total liquidity at quarter end.

    Net Debt-to-EBITDA Ratio
    2.8x
    Q4 FY26

    Ticked up slightly due to timing noise in bank definition of net debt.

    Dividend per share
    $0.1875
    Q4 FY26

    Quarterly cash dividend declared by Board of Directors.

    Annual Indicated Dividend
    $0.75
    FY27

    Based on the quarterly dividend.

    Dividend Yield
    4.7%
    FY27

    Based on yesterday's closing stock price.

    Full Year Capital Expenditures
    $122 million
    FY26

    Invested for the full fiscal year.

    Full Year Outstanding Debt Reduction
    $41 million
    FY26

    Reduced outstanding debt for the full fiscal year.

    Full Year Capital Returned to Shareholders
    $67 million
    FY26

    Total capital returned for the full fiscal year.

    North America Contract Adjusted Operating Margin Expansion
    40 basis pointsyear-over-year
    Q4 FY26

    Primarily from gross margin expansion driven by leverage on higher sales and pricing realization.

    International Contract Adjusted Operating Margin Change
    down 470 basis pointscompared to last year
    Q4 FY26

    Primarily from deleverage on lower sales, regional sales mix, foreign currency impacts, and timing of program spend.

    Global Retail Adjusted Operating Margin Change
    down 110 basis pointsyear over year
    Q4 FY26

    Primarily reflecting planned investments in new store openings and the underperformance of the Holly Hunt brand.

    Global Retail Marketing Spend as % of Orders
    down 40 bpsyear-on-year
    Q4 FY26

    Sequential improvement in marketing economics.

    Global Retail Discounting Rate
    down 50 bpsyear-on-year
    Q4 FY26

    Reflects disciplined pricing strategy.

    Global Retail Promotional Days
    held flatyear-on-year
    Q4 FY26

    Reflects disciplined pricing strategy.

    Industry KPIs

    2
    MetricValueDetails
    Core pricenet 8%%
    Price to cost spreadslightly favorable

    Orderbook & backlog

    1
    Consolidated Backlog$679 millionquarter end (May 30, 2026)

    down 10.8% from a year ago

    Reflecting both the prior year order pull forward dynamic and the timing of shipments at year end.

    Capital programs

    1
    Muskegon manufacturing plant consolidationannounced

    Benefit: improving overall operational efficiency

    Recently announced consolidation of the manufacturing plant in Muskegon, Michigan into other facilities to evaluate capacity utilization opportunities.

    Risks & headwinds

    4
    Global geopolitical concernsQ4 FY26

    Impacted International Contract segment order activity, down 8.7% reported and 10.6% organically; adjusted operating margin down 470 bps YoY.

    Mitigation: Strategic approach to targeting key growth opportunities and managing costs in a disciplined manner in affected regions.

    Macro uncertaintyQ4 FY26

    Contributed to lower order activity in International Contract segment, down 8.7% reported and 10.6% organically.

    Mitigation: Encouraging demand signals across key leading indicators in North America Contract, such as increased showroom visits and internal forward demand indicators.

    Holly Hunt brand underperformanceQ4 FY26

    Contributed to Global Retail adjusted operating margin being down 110 bps YoY.

    Mitigation: Implementing restructuring to better align costs with demand and strengthening leadership to enhance commercial execution, addressing lack of product development and newness not resonating.

    Prior year order pull-aheadQ4 FY26 (comparison to Q4 FY25)

    Resulted in consolidated orders being down 6.3% reported (6.9% organic) and North America Contract orders down 10% reported and organic in Q4 FY26, compared to a strong Q4 FY25 with $55M-$60M pull-ahead.

    Mitigation: Adjusting for this, orders in the quarter were down approximately 1% year over year, indicating underlying demand is more stable.

    Q&A highlights

    6

    Asked about Holly Hunt's revenue contribution and the specific challenges it faces, particularly regarding underperformance.

    Management declined to provide specific revenue figures for Holly Hunt but attributed challenges to cost issues, leadership changes, and a lack of product development. They are implementing restructuring and creative corrections to improve performance.

    “We've never sized individual brands within the portfolio, so I'm not going to provide that level of color here. But principally, the challenges that we're facing are cost related. And candidly, we had some leadership challenges that are being addressed. We've had a lack of product development in that particular brand and the newness that was launched has not been resonating.”

    asked by Gregory Burns · answered by Jeff Stutz

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities for FY27

    Incoming Interim CEO Jeff Stutz outlined three key areas of focus for fiscal 2027: elevating operating discipline, enhancing cost discipline across businesses, and strengthening the balance sheet through debt reduction and improved cash flow. These initiatives aim to improve financial performance and execution, leveraging existing capabilities rather than reinvention. The company seeks to establish clear priorities and improve hygiene around managing them, focusing collective creativity on problem-solving.

    02

    Retail Strategy Evolution

    MillerKnoll is making strategic shifts in its Global Retail segment, with a focus on opening more smaller, approximately 1,800 square feet Herman Miller store formats. These stores offer lower upfront capital, quicker productivity, and payback in under three years, while also serving as lead generators for the contract business. The company plans to open 9 to 11 Herman Miller stores and 5 to 7 Design Within Reach (DWR) stores in FY27, maintaining a measured pace for DWR.

    03

    Holly Hunt Repositioning Efforts

    The Holly Hunt brand within Global Retail faced challenges in FY26 due to lagging demand patterns and operational inefficiencies. In response, MillerKnoll has implemented restructuring actions to align costs with demand and strengthen leadership to enhance commercial execution. The goal is to reposition the ultra-premium brand for long-term success and improved performance, while preserving its strong market position.

    04

    North America Contract Demand Signals

    Despite macro uncertainty🌐, the North America Contract segment is seeing encouraging demand signals. Internal forward demand indicators, including the full-year funnel, value of projects won, and backlogs, showed both year-over-year and sequential improvement. Traffic and showroom visits during design events were up, and healthy leasing demand for Class A spaces reflects continued demand for the higher-quality environments MillerKnoll serves.

    05

    International Contract Headwinds and Strengths

    The International Contract segment was impacted by global geopolitical concerns, leading to lower order activity in core markets like parts of Europe, the UK, and Latin America. However, the company observed ongoing signs of strength in key Asian markets, Central and Eastern Europe, and China and India. Management is focused on a strategic approach to target these growth opportunities and manage costs disciplinedly, including expanding dealer relationships in key markets.

    06

    Pricing and Cost Management Dynamics

    MillerKnoll has maintained a slightly favorable price-cost dynamic in Q4 FY26 and Q1 FY27. This was achieved by capturing tariff-related offsets, implementing a standard list price increase in April for contract and retail businesses, and introducing an inflation surcharge in June. An international list price increase is also planned for September, demonstrating a consistent playbook for navigating cost pressures.

    AI-generated summary of the company’s earnings call. Not investment advice.