MillerKnoll Inc. (NASDAQ: MLKN), a growth-oriented small-cap value company in the industrial and consumer sectors, today reported results for the third quarter of fiscal year 2026, which ended February 28, 2026.
Third Quarter
-Net sales of $926.6 million, up 5.8% as reported and up 3.8% organically*, year-over-year
-Orders of $931.6 million, up 9.2% as reported and up 7.2% organically*, year-over-year, driven by growth in North America Contract and Global Retail segments
-Gross margin increased 20 basis points
-Consolidated operating expenses decreased to $308.0 million
-Consolidated adjusted operating expenses* increased to $300.0 million, driven primarily by higher compensation expense, new store costs, and unfavorable currency
-Operating expense special charges of $8.0 million:
$1.9 million of restructuring charges related to a facility consolidation
$6.1 million of purchase accounting amortization
-Operating margin of 4.8%, compared to a negative operating margin of 9.4% in the prior year
-Adjusted operating margin* of 5.7%, compared to 6.6% in the prior year
Third Quarter 2026 Cash Flow, Debt, and Liquidity
-Liquidity, as of February 28, 2026, of $594.0 million reflected cash on hand and Revolving Credit Facility availability
-Cash flow from operations of $61.1 million, compared to $62.1 million in Q3 last year
-Net debt-to-EBITDA ratio, as defined by our Credit Facility, of 2.75x
-Near term scheduled debt maturities:
$5.8 million in fiscal 2026
$23.3 million in fiscal 2027
$25.8 million in fiscal 2028
Dividend
On January 13, 2026, MillerKnoll’s Board of Directors declared a quarterly cash dividend of $0.1875 per share. The dividend is payable on April 15, 2026, to shareholders of record on February 28, 2026.
“We delivered solid fiscal 2026 third quarter results, with sales growth across all three segments and strong order growth led by North America Contract and Global Retail. These results underscore the strength and resilience of our diversified portfolio.
“Despite ongoing macroeconomic and geopolitical uncertainty, as well as weather-related impacts during the quarter, our team remained focused on disciplined execution and operational priorities within our control.
“We remain well positioned to drive profitable growth and create long-term value across our collective of brands through sustained revenue growth, margin expansion, cash generation and shareholder returns,” said Andi Owen, President and Chief Executive Officer.
Third Quarter Fiscal 2026 Results by Segment
North America Contract
-Q3 net sales of $488.6 million, up 4.4% as reported and up 4.1% organically*, year-over-year
-Q3 orders of $490.9 million, up 13.1% as reported and up 12.8% organically*, year-over-year
-Q3 operating margin of 8.6% compared to 3.6% in the prior year
-Q3 adjusted operating margin* of 9.8%, up 70 basis points compared to prior year, primarily from gross margin expansion driven by leverage on higher sales and operational efficiency
International Contract
-Q3 net sales of $156.9 million, up 7.8% as reported and up 1.9% organically*, year-over-year
-Q3 orders of $160.3 million, up 0.7% as reported and down 4.3% organically*, year-over-year
-Q3 operating margin of 7.7% compared to 6.8% in the prior year
-Q3 adjusted operating margin* of 8.2%, down 110 basis points year-over-year, primarily from regional and product sales mix, and currency impact
Global Retail
-Q3 net sales of $281.1 million, up 7.1% as reported and up 4.4% organically*, year-over-year
-Q3 orders of $280.4 million, up 7.9% as reported and up 5.1% organically*, year-over-year
-Q3 orders were up 7.7% in the North America region, year-over-year
-Q3 operating margin of 2.2% compared to operating loss margin of 36.0% in the prior year
-Q3 adjusted operating margin* of 2.8%, down 340 basis points year-over-year, primarily due to a freight benefit in the prior year, targeted promotional actions to offset adverse weather in the quarter, and impact from opening new stores
-Q3 new retail store openings: two DWR stores in Pittsburgh, PA and Ft. Worth, TX, and a Herman Miller store in Phoenix, AZ
Fourth Quarter 2026 Outlook
The table below presents our expectations for the fourth quarter fiscal 2026 financial operating results:
|
Q4 FY2026 |
|
|
Net sales |
$955 million to $995 million |
|
Gross margin % |
38.5% to 39.5% |
|
Adjusted operating expenses* |
$311.5 million to $321.5 million |
|
Interest and other expense, net |
$14.6 million to $15.6 million |
|
Adjusted effective tax rate* |
23.0% to 25.0% |
|
Adjusted earnings per share – diluted* |
$0.49 to $0.55 |
|
*Items indicated represent Non-GAAP measures. The Q4 FY2026 outlook excludes an expected $6.0 million in operating expense charges related to amortization of Knoll purchased intangibles and the related tax and earnings per share impact. The Company does not reconcile forward-looking non-GAAP measures. See “Non-GAAP Financial Measures and Other Supplemental Data.” |
|
-Above guidance ranges include the following estimated impacts to incremental operating expense in Q4:
-Approximately $8 million to $9 million in currently anticipated direct impact of the Middle East conflict from minimal expected shipments to the region and higher logistics costs, or $0.09 to $0.10 per share
-$3.5 million to $4.5 million in costs associated with new store investments, including three to four new store openings in Q4
-Based on tariffs in place as of the date of this release, we expect incremental tariff costs in Q4 to be offset by previously announced pricing actions
-Our guidance includes an estimated full year capital expenditure range of $120 million to $130 million
-Our guidance does not assume additional headwinds from changes in the geopolitical environment, including the conflict in the Middle East, beyond the items described
The full text of MillerKnoll’s 3Q26 earnings release, including all tables, and a replay of the company’s March 25 conference call and webcast may be accessed at https://www.millerknoll.com/investor-relations.
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.