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MillerKnoll, Inc. Reports First Quarter Fiscal 2027 Results

MillerKnoll Inc. (NASDAQ: MLKN), a growth-oriented small-cap value company in the industrial and consumer sectors, today reported results for the first quarter of fiscal year 2027, ended August 29, 2026.

“We delivered strong first quarter earnings, above expectations, reflecting solid execution across the enterprise. Despite softer than expected demand patterns in the quarter, we remain confident in our earnings outlook for the second quarter and full fiscal year. We are directing our efforts toward three key areas: focused priority setting, disciplined cost management, and strengthening our balance sheet for long-term value creation. Our results this quarter reflect the early impact of this work, and we expect this progress to continue,” said Jeff Stutz, Interim Chief Executive Officer.

First Quarter Tariff Refund Impact

  • During the first quarter of fiscal 2027, we recognized an approximate $10 million net increase in our operating income related to refunds received from the U.S. government of previously paid IEEPA tariffs (the “tariff refunds“). This resulted in a net per share benefit of $0.11 to our diluted earnings per share and 110 basis points of net improvement in our operating margin in the quarter.

First Quarter

  • Net sales of $923.4 million, down 3.4% as reported and down 3.3% organically*, year-over-year
  • Orders of $913.9 million, up 3.2% as reported and up 3.5% organically*, year-over-year
  • Gross margin increased 320 basis points and adjusted gross margin* increased 330 basis points, primarily from the tariff refunds and price realization, partially offset by inflationary cost pressure
  • Operating expenses increased to $333.5 million, and adjusted operating expenses* increased to $320.1 million, driven primarily by higher compensation expense, including variable incentive compensation, and higher new store expense, partially offset by improved cost management
  • Operating expense special charges of $13.4 million:
    • $6.0 million of restructuring charges related to targeted workforce reductions and facility consolidations
    • $5.7 million of purchase accounting amortization
    • $1.7 million of CEO transition costs
  • Operating margin of 5.6%, compared to 5.6% in the prior year, and adjusted operating margin* of 7.1%, compared to 6.3% in the prior year, included 110 basis points in net tariff refunds benefit
  • Diluted earnings per share of $0.38, compared to $0.29 in the prior year, and adjusted diluted earnings per share* of $0.53, compared to $0.45 in the prior year, included the $0.11 per share net benefit from tariff refunds

First Quarter 2027 Cash Flow, Debt, and Liquidity

  • Liquidity, as of August 29, 2026, of $580.4 million reflected cash on hand and revolving credit facility availability
  • Cash flow from operations of $49.1 million, compared to $9.4 million in the prior year
  • Net debt-to-EBITDA ratio, as defined by our credit facility, of 2.75x
  • Near term scheduled debt maturities:
    • $22.0 million in fiscal 2027
    • $25.8 million in fiscal 2028
    • $89.8 million in fiscal 2029

Dividend

  • On July 14, 2026, MillerKnoll’s Board of Directors declared a quarterly cash dividend of $0.1875 per share. The dividend is payable on October 15, 2026, to shareholders of record on August 29, 2026.

First Quarter Fiscal 2027 Results by Segment

North America Contract

  • Net sales of $505.6 million, down 5.3% as reported and down 5.2% organically*, year-over-year
  • Orders of $483.7 million, down 1.7% as reported and down 1.6% organically*, year-over-year
  • Operating margin of 9.4% compared to 10.7% in the prior year
  • Adjusted operating margin* of 10.7%, down 70 basis points compared to prior year, primarily from deleverage on lower sales and inflationary cost pressure, partially offset by pricing realization and a benefit from tariff refunds

International Contract

  • Net sales of $156.8 million, down 6.4% as reported and down 6.2% organically*, year-over-year
  • Orders of $181.2 million, up 17.3% as reported and up 17.9% organically*, year-over-year
  • Operating margin of 2.4% compared to 8.1% in the prior year
  • Adjusted operating margin* of 4.6%, down 390 basis points year-over-year, primarily from deleverage on lower sales, showroom investments, timing of sales events and higher incentive compensation expense

Global Retail

  • Net sales of $261.0 million, up 2.6% as reported and up 2.8% organically*, year-over-year
  • Orders of $249.0 million, up 4.3% as reported and up 4.7% organically*, year-over-year
    • Orders were up 7.5% in the North America region, year-over-year
  • Operating margin of 6.1% compared to 0.6% in the prior year
  • Adjusted operating margin* of 7.0%, up 580 basis points year-over-year, primarily from a 410 basis point net tariff refunds-related benefit, along with pricing realization and cost savings, partially offset by the impact from opening new stores
  • New retail store openings in Q1: DWR store in Raleigh, NC, and Herman Miller stores in Columbus, OH, St. Louis, MO and San Antonio, TX.

Second Quarter Outlook

The table below presents our selected expectations for the second quarter and full fiscal year 2027 financial operating results:

Q2 FY2027

Net sales

$972 million to $1.012 billion

Gross margin %

38.3% to 39.3%

Adjusted operating expenses*

$321 million to $331 million

Interest and other expense, net

$15.8 million to $16.8 million

Adjusted effective tax rate*

21% to 23%

Adjusted earnings per share – diluted*

$0.43 to $0.49

 

Full Year FY2027

Current Guidance

Previous Guidance

Net sales

$3.88 billion to $4.03 billion

$3.93 billion to $4.13 billion

Adjusted earnings per share – diluted*

$1.85 to $2.15

$1.85 to $2.15

*Items indicated represent Non-GAAP measures. The Q2 FY2027 outlook excludes an expected $5.7 million in operating expense charges related to amortization of Knoll purchased intangibles and the related tax and earnings per share impact. The Company has not reconciled forward-looking non-GAAP measures because certain items that impact such measures are outside of the Company’s control and/or cannot be reasonably predicted. These items are uncertain, depend on various factors, and could have a material impact on GAAP results for the guidance period. See “Non-GAAP Financial Measures and Other Supplemental Data.”

The full year outlook also includes the following additional estimated full year expectations:

  • Estimated $0.07 per share unfavorable impact from Canada-related tariff costs over the next three quarters, as well as the $0.11 per share net benefit from tariff refunds in the first quarter
  • Opening 14 to 18 new retail stores, including 5 to 7 new store openings in Q2
  • Effective tax rate of approximately 21.0% to 23.0%
  • Capital expenditures of approximately $125 million to $135 million

The full text of MillerKnoll’s 1Q27 earnings release, including all tables, may be accessed at https://www.millerknoll.com/investor-relations, and a replay of the company’s Sep. 22 conference call webcast may be accessed at https://www.millerknoll.com/investor-relations/news-events/events-and-presentations.

About MillerKnoll

MillerKnoll is a collective of dynamic brands that comes together to design the world we live in. MillerKnoll brand portfolio includes Herman Miller, Knoll, Colebrook Bosson Saunders, Design Within Reach, Edelman, FilzFelt, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, NaughtOne, and Spinneybeck. Guided by a shared purposeā€”design for the good of humankindā€”MillerKnoll generates insights, pioneers innovations, and champions ideas to better align spaces with how people live, work, and gather. For more information, visit millerknoll.com.