MillerKnoll (NASDAQ: MLKN) reported adjusted earnings per share of $0.53 for the quarter ended Aug. 29, 2026, surpassing Wall Street consensus of $0.35, as margin expansion and tariff refunds more than offset a sales decline in the first fiscal quarter.
Net sales fell 3.4% to $923.4 million on a reported basis, or 3.3% organically excluding currency effects. Orders, however, rose 3.2% to $913.9 million, with organic order growth of 3.5%, signaling improving demand momentum.
The company's adjusted gross margin expanded 330 basis points to 41.8%, its strongest level in recent quarters. A significant driver was $16.5 million in tariff refunds that flowed through gross margin, adding approximately 180 basis points to consolidated gross margin. After a $6.5 million offset in incentive compensation adjustments, net operating income was bolstered by $10 million and adjusted EPS received roughly $0.11 contribution from these items.
On an adjusted basis excluding tariff benefits, EPS would have been $0.42. Adjusted operating margin improved to 7.1% from 6.3% a year earlier, while adjusted operating expenses represented 34.7% of sales. The company generated $49 million in operating cash flow during the quarter.
MillerKnoll operates across three primary business segments. North America Contract, which accounted for 54% of fiscal 2026 revenue, saw a 5.3% sales decline. International Contract, representing 17% of revenue, implemented pricing increases of approximately 4% in early September. Global Retail, contributing 29% of revenue through channels including Design Within Reach and Herman Miller branded stores, posted eight consecutive quarters of order growth in North America and plans 14 to 18 new store openings in fiscal 2027.
The global premium furniture market totals approximately $200 billion, with the North America contract market around $20 billion, the international contract market roughly $30 billion, and the global premium retail furniture market about $150 billion.
For the second quarter of fiscal 2027, MillerKnoll guided revenue between $972 million and $1.012 billion and adjusted EPS between $0.43 and $0.49. The company expects a price-cost headwind of 20 to 30 basis points in Q2.
Full-year revenue guidance was lowered to $3.88 billion to $4.03 billion from the previous range of $3.93 billion to $4.13 billion. Adjusted EPS guidance was maintained at $1.85 to $2.15. Capital expenditures are expected to increase to $125 million to $135 million. Tariff actions are projected to impact full-year EPS by approximately $0.07. September orders through the first three weeks were running 9% higher year-over-year across all three business segments.
Shares rose 3.94% to $21.12, trading within a 52-week range of $13.77 to $24.71. MillerKnoll carries a P/E ratio of approximately 15.5 and a dividend yield near 3.7%.
The company's balance sheet shows net debt to EBITDA of 2.75x, with total available liquidity of $580 million, comprising $179 million in cash and $402 million in revolver availability. Weighted average debt interest rate stands at approximately 4.5%, backed by fixed interest rate swaps.
