MillerKnoll (MLKN) reported first-quarter fiscal 2027 adjusted earnings per share of $0.53, beating Wall Street's estimate of $0.35 by more than 51%, on Tuesday. Shares rose 1.03% to $20.53 in premarket trading.
Revenue of $923.4 million fell 3.4% from a year earlier and missed consensus estimates of $940.9 million by roughly 1.9%. Consolidated orders rose 3.2% to $914 million, and the backlog stood at $669 million, down 3.1% year over year.
The earnings beat was significantly aided by $16.5 million in refunds from the U.S. government related to previously expensed IEPA tariffs. Those refunds contributed approximately 180 basis points to gross margin expansion and $0.11 per share to adjusted diluted EPS, interim CEO Jeff Stutz said during the earnings call.
Adjusted gross margin came in at 41.8%, up 320 basis points year over year, driven by the tariff refunds and operational savings. Excluding the tariff refunds, adjusted EPS would have been $0.42.
Operating cash flow was $49 million, and capital expenditures totaled $33 million. The company ended the quarter with $580 million in available liquidity and a net debt-to-EBITDA ratio of 2.75 times.
Segment performance was mixed. North America Contract posted net sales of $506 million, down 5.3%, while International Contract saw sales fall 6.4% to $157 million despite orders surging 17.3% to $181 million. Global Retail was the standout, with net sales rising 2.6% to $261 million. North America retail orders grew 7.5% for the eighth consecutive quarter.
MillerKnoll also announced four new retail store openings — a Design Within Reach in Raleigh, North Carolina, and Herman Miller locations in Columbus, Ohio; St. Louis; and San Antonio. Debbie Propst, president of Global Retail, said stores opened in 2025 and 2026 should reach profitability in fiscal 2027.
Looking ahead, the company expects second-quarter net sales of $972 million to $1.012 billion and adjusted EPS of $0.43 to $0.49. Full-year revenue is projected at $3.88 billion to $4.03 billion, with adjusted EPS maintained at $1.85 to $2.15.
International Contract implemented price increases of about 4% in early September. Stutz noted that the first three weeks of September orders were running 9% higher year over year across all segments. Tariff-related headwinds are expected to weigh on full-year EPS by approximately $0.07.
