MillerKnoll (MLKN) Q3 2026 Earnings Transcript

Core Insights - The company demonstrated strong cash generation in its North America Contract segment, with year-over-year growth in gross margin and operating income [1][12] - Despite macroeconomic and geopolitical uncertainties, the company achieved solid quarterly results, with continued sales and order growth [4][10] - The company is optimistic about its strategic initiatives and long-term value creation, focusing on revenue growth, margin expansion, and shareholder returns [10][14] Segment Performance - North America Contract segment net sales reached $489 million, up 4.4% year-over-year, with orders increasing to $491 million, up 13.1% [14] - International Contract segment net sales were $157 million, up 7.8% on a reported basis, while orders were $160 million, reflecting a slight increase of 0.7% [15] - Global Retail segment net sales were $281 million, up 7.1% year-over-year, with orders improving to $280 million, up 7.9% [16] Financial Highlights - Adjusted earnings per share for the third quarter were $0.43, compared to $0.44 in the same quarter last year [12] - Consolidated net sales for the quarter were $927 million, a 5.8% increase year-over-year [12] - The company generated $61 million in cash flow from operations and reduced debt by $41 million, lowering the debt to EBITDA ratio to 2.75 times [13] Market Dynamics - The company expects to continue offsetting tariff costs and is closely monitoring policy changes [2] - The Middle East conflict is anticipated to disrupt sales and costs in the fourth quarter, with an expected impact of $8 million to $9 million on earnings [19][20] - The company is optimistic about growth opportunities in underpenetrated markets and plans to expand its retail footprint [5][8] Strategic Initiatives - The company plans to open three to four additional retail locations before the end of fiscal 2026, aiming for a total of 14 to 15 new stores [8][17] - Marketing campaigns and product launches are being executed to attract new customers and drive store traffic [8][9] - The company continues to invest in its product portfolio, particularly in lifestyle categories and gaming [48]