MillerKnoll, Inc. Reports Fourth Quarter and Fiscal 2024 Results

MillerKnoll Inc.  (NASDAQ: MLKN) today reported results for the fourth quarter and full fiscal year 2024, which ended June 1, 2024.

Business Highlights

  • Orders in the fourth quarter were up 1.1% on a reported basis and up 2.9% organically from last year.
  • Fourth quarter and full year gross margin improved 250 basis points and 410 basis points, respectively year-over-year.
  • Achieved annualized run-rate cost synergy target of¬†$160 million¬†related to the integration of Knoll.
  • Full year GAAP and adjusted diluted earnings per share improved 101.8% and 12.4% respectively, from the prior year.

To our shareholders:

MillerKnoll finished fiscal year 2024 strong with significant year-over-year earnings per share growth in the fourth quarter. By leveraging the advantage and scale of MillerKnoll’s collective of brands, diversified business channels and global operations, our teams continued to drive substantial margin expansion while protecting strategic investments for growth. The improving internal demand indicators we have been monitoring throughout the year were validated in the fourth quarter by a return to year-over-year order growth within our America’s Contract segment. This drove a 6.9% sequential improvement in the consolidated order backlog, giving us added momentum as we begin fiscal year 2025.

There is accelerated activity in our contract business. Earlier this month, we met with dealers and customers at Design Days, an annual large trade show in¬†Chicago. Appointments at our showrooms were up year-over-year and importantly, there was a shift in dialogue from theoretical return to office ideas to specific project needs. During the show, we launched over 30 new products, capturing industry awards for Knoll’s Tugendhat and Morrison Hannah chairs, Knoll’s Cove Collection for private offices and NaughtOne’s Percy chair. In addition,¬†Herman Miller¬†refreshed the versatile Vantum Gaming Chair with new ergonomic enhancements and introduced a seating option with a lower carbon footprint, the Mirra 2 task chair.

We are investing in MillerKnoll showrooms, our digital platforms, and enhanced tools to fuel our contract business and support our MillerKnoll dealers. We are also finding new ways to bring our brand collective together in both our dealers showrooms and our own showrooms. Work is underway to open newly enhanced MillerKnoll spaces in London, New York and Los Angeles later in the year.

While our retail business and the industry continue to navigate tough conditions in the short-term, we are making investments for long-term growth by enhancing the store and online experience for customers. We continued to optimize our product assortment through the introduction of complementary categories and additional materials. To optimize foot traffic, we are densifying floor arrangements to show more options and offering design services that help drive larger sales with less returns. In addition, we are testing store formats such as the beautiful new Design Within Reach studio in San Francisco and will apply learnings as we open new stores.

Fourth Quarter and Fiscal 2024 Consolidated Results

Consolidated net sales for the fourth quarter were $888.9 million, reflecting a decrease of 7.1% year-over- year and a decrease of 5.2% organically compared to the same period last year. Orders in the quarter of $933.0 million were up 1.1% as reported and 2.9% on an organic basis. Orders grew sequentially 12.4% from the previous quarter on a reported basis.

Gross margin in the quarter was 39.6%, which is 250 basis points higher than the same quarter last year. The year-over-year increase in gross margin was driven mainly by the realization of price and channel optimization strategies, cost synergies and continued reductions in freight and distribution costs.

Consolidated operating expenses for the quarter were $328.7 million, compared to $343.1 million in the prior year. Consolidated adjusted operating expenses were $278.8 million, a decrease of $18.8 million year-over-year, primarily due to lower variable selling expenses, the continued benefit of synergy savings, and recently implemented restructuring actions.

During the fourth quarter, the Company recorded special charges of¬†$22.1¬†million associated with previously announced restructuring measures, which included a workforce reduction and showroom consolidation. In addition, the Company recognized non-cash, pre-tax charges totaling¬†$16.8 million¬†related to the impairment of the Knoll and Muuto trade names. This charge was determined based on the Company’s annual impairment review process.

Operating margin for the quarter was 2.7% compared to 1.2% in the same quarter last year. On an adjusted basis, consolidated operating margin for the quarter was 8.3% compared to 5.9% in the same quarter last year, reflecting an adjusted operating margin expansion of 240 basis points.

Reported diluted earnings per share were $0.14 for the quarter, compared to break-even for the same period last year. Adjusted diluted earnings per share were $0.67 for the quarter, reflecting growth of 63.4% compared to $0.41 for the same period last year.

As of June 1, 2024, our liquidity position reflected cash on hand and availability on our revolving credit facility totaling $552.7 million. During the fourth quarter, the business generated $78.4 million of cash flow from operations. We repurchased approximately 1.4 million shares for a total cash outlay of $37.3 million. We ended the fourth quarter with a net debt-to-EBITDA ratio, as defined by our lending agreement, of 2.63x. Our scheduled debt maturities (which exclude the maturity of the revolver) for fiscal years 2025, 2026 and 2027 are $43.6 million, $46.8 million and $276.4 million respectively.

For fiscal 2024, net sales were $3.6 billion, reflecting a year-over-year decrease of 11.2%. On an organic basis, net sales decreased by 8.1% year-over-year.

For fiscal 2024, gross margin and operating margin both improved year-over-year. Reported and adjusted gross margin increased 410 and 370 basis points, respectively. Reported operating margins were 160 basis points higher than last year, while adjusted operating margin increased 90 basis points year-over-year.

Diluted earnings per share for the full year totaled $1.11, compared to $0.55 in fiscal 2023. On an adjusted basis, diluted earnings per share for the full year totaled $2.08 compared to $1.85 in fiscal 2023, reflecting an increase of 12.4%.

Fourth Quarter and Fiscal 2024 Results by Segment

Americas Contract

For the fourth quarter, Americas Contract net sales of $416.6 million were down 12.2% on a reported basis and down 12.3% organically compared to the same period last year. New orders totaled $480.1 million and were up 5.7% from the previous year and increased sequentially by 14.3% from the third quarter of fiscal 2024. Throughout the fourth quarter, order levels improved each month supported by the strategic initiatives the Company outlined last quarter to capture demand. Leading indicators, such as funnel additions and contract activations, remain positive and are suggestive of improving demand patterns as we enter fiscal year 2025. Based on past recovery cycles, demand patterns are expected to be volatile month-to-month, but trend positive over longer time periods.

Operating margin loss in the quarter was 0.7% compared to operating margin of 4.5% in the prior year. On an adjusted basis, operating margin was 7.3% in the quarter, which is down 280 basis points compared to the same quarter last year as a result of lower sales and reduced fixed cost leverage.

For the full fiscal year, net sales decreased by 10.0% and organic sales decreased by 8.3% year-over-year. Operating margin for the full fiscal year was 5.4% compared to 4.9% in the prior year.  On an adjusted basis, operating margin was 8.9%, which was up 100 basis points due to the combination of gross margin expansion and well managed operating expenses.

International Contract and Specialty

The International Contract and Specialty segment net sales in the fourth quarter of $245.0 million grew 3.2% on a reported basis and 3.8% on an organic basis year-over-year with strong performance in India, the Middle East, China, and Korea, and positive activity in the healthcare, technology, and financial sectors. Orders during the quarter totaled $238.7 million, resulting in a year-over-year decrease of 0.5% on a reported basis and flat organically. Lower demand patterns in the Specialty businesses offset international contract business demand growth.

Operating margin for the fourth quarter was 10.0% compared to 7.2% in the prior year. On an adjusted basis, operating margin for the quarter was 14.5%, up 520 basis points year-over-year, driven by product and price optimization, cost synergies, efficiencies gained by localized sourcing and production within India and China, and the benefit of stabilized energy costs in Europe.

For the full fiscal year, net sales decreased 8.4% and organic sales decreased 7.2% year-over-year. Operating margin was 8.4% compared to 9.7% in the prior year. On an adjusted basis, operating margin decreased 30 basis points, driven by the loss of leverage from slowed demand in both Europe and our Specialty businesses.

Global Retail

Net sales in the fourth quarter of our Global Retail segment totaled $227.3 million, a decline of 7.2% year-over-year on a reported basis and up slightly on an organic basis, as softer housing-related demand conditions continue. Orders in the quarter totaled $214.2 million, down 6.2% compared to the same period last year on a reported basis and up 0.9% on an organic basis.

Operating margin for the fourth quarter was 6.2% compared to operating margin loss of 4.4% in the prior year.  On an adjusted basis, operating margin for the quarter was 8.6%, which was 790 basis points higher than the prior year, driven by significantly improved operational efficiencies in the North American distribution centers and fewer inventory adjustments.

For the full fiscal year, net sales decreased 16.4% and organic sales decreased 8.6% year-over-year.

Reported operating margin was 4.9% compared to operating margin loss of 1.5% in the prior year. On an adjusted basis, operating margin was 5.9%, which was 210 basis points higher than the prior year and driven by pricing actions as well as improvements in inventory management and increased shipping revenues.

First Quarter and Fiscal 2025 Outlook

Overall, we are optimistic about fiscal year 2025 as there is increased activity and interest in the contract space. Traffic at recent trade shows around the globe, including NeoCon in the U.S., Salone di Mobile in Italy, and 3daysofdesign in Copenhagen have improved and are close to pre-COVID levels. Also, negative trends in home sales are beginning to ease. The National Association of Realtors reported the year-over-year decline in existing home sales, including luxury homes, flattened in April. With a direct correlation between luxury home sales and demand for home furnishings, we are well positioned to benefit as this activity accelerates.

We believe these indicators signal an active year ahead. Accordingly, for fiscal year 2025 we expect net sales to be above fiscal year 2024 and adjusted diluted earnings per share to be in the range of $2.10 to $2.30.

As it relates to the first quarter of fiscal year 2025, we expect net sales of $872.0 million to $912.0 million and adjusted diluted earnings to be between $0.38 to $0.44 per share.  The midpoint of this guidance would suggest a year-over-year revenue decrease of approximately 2.8%.

Andi Owen
President and Chief Executive Officer

Jeff Stutz
Chief Financial Officer

The full text of MillerKnoll’s 4Q24 earnings release, including all tables, and an archived replay of the company’s June 26 conference call webcast may be accessed at

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, DatesWeiser, Design Within Reach, Edelman, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, NaughtOne, and Spinneybeck|FilzFelt. MillerKnoll is an unparalleled platform that redefines modern for the 21st century by building a more sustainable, equitable and beautiful future for all.