MLKN Q3 Earnings Meet Estimates, Sales Miss, FY'25 EPS View Down

Core Insights - MillerKnoll, Inc. reported third-quarter fiscal 2025 results with adjusted earnings meeting consensus estimates but declining year over year, while net sales missed consensus but grew slightly year over year [1][4] Financial Performance - Adjusted earnings were 44 cents per share, down 2.2% from 45 cents year over year [4] - Net sales reached $876.2 million, missing the consensus estimate of $922 million by 5%, but increased by 0.4% year over year [4] - Organic net sales grew by 1.8% year over year, with orders amounting to $853.1 million, up 2.7% reported and 4.1% organically [4] Segment Performance - North America Contract segment saw net sales grow by 1.4% reported and 1.7% organically to $468.2 million, with new orders down 1.8% year over year [5] - International Contract segment experienced a 5% decline in net sales to $145.5 million, with new orders down 1.6% reported but up 1.4% organically [6] - Global Retail segment's net sales increased by 1.9% reported and 3.9% organically to $262.5 million, with new orders up 14.7% reported and 16.9% organically [7] Operating Metrics - Gross margin declined by 70 basis points year over year to 37.9% due to unfavorable channel and product mix, lower fixed cost leverage, and higher commodity costs [9] - Adjusted operating expenses decreased by 1.6% year over year to $274.4 million, attributed to lower incentive compensation and cost control [10] Liquidity and Debt - As of March 1, 2025, the company had $468.2 million in liquidity, with cash and equivalents at $169.8 million, down from $230.4 million at the end of fiscal 2024 [11] - Long-term debt slightly decreased to $1.28 billion from $1.29 billion reported at the end of fiscal 2024 [11] Future Guidance - For fiscal Q4, net sales are expected to range from $910 million to $950 million, with adjusted EPS projected between 46 to 52 cents [13] - For fiscal 2025, net sales are anticipated to be between $3.618 billion and $3.658 billion, with adjusted EPS expected to be between $1.81 and $1.87, down from earlier estimates [15]