MillerKnoll's (NASDAQ:MLKN) Earnings Offer More Than Meets The Eye

We are pleased to present our analysis of MillerKnoll, Inc.'s (NASDAQ:MLKN) recent earnings, which offer more insights than initially meets the eye. MillerKnoll is a leading provider of interior furnishings, operating through three segments: Americas Contract, International Contract & Specialty, and Global Retail. The company's earnings report for the second quarter of fiscal 2025 provides valuable information about its performance and growth prospects.

Our analysis of MillerKnoll's earnings:

1. Revenue and Order Growth: MillerKnoll's revenue growth rate was -0.061 over the past year, which may seem modest at first glance. However, the company's forward EPS is expected to grow significantly, from 0.91 to 2.48, indicating that analysts are optimistic about its future earnings potential. This discrepancy between past and expected future earnings growth may contribute to the cautious analyst sentiment.
2. Segment Performance: The Americas Contract segment experienced order growth trends that improved as the quarter progressed, with orders totaling $456.8 million, up 4.4% from the previous year. This growth can be attributed to the evolving preferences and needs of customers in the region, as well as the company's strategic focus on innovative solutions and quality.
3. Innovative Solutions and Quality: MillerKnoll's commitment to innovative solutions and quality has significantly contributed to its order growth in the Americas Contract segment. The company's relentless focus on these aspects has led to a consistent improvement in order growth trends, as evident in its leading indicators, such as overall funnel, project funnel additions, customer mock-up requests, and pricing activity, which have all been up year-over-year.
4. Expansion and Global Scale: MillerKnoll's expansion of its dealer distribution network and global scale have contributed to its order growth in the Americas Contract segment. This is evident in the company's ability to maintain gross margin expansion while strategically managing operating expenses and positioning its business segments for profitable growth. The company's global scale and reach have allowed it to maintain a strong balance sheet and return capital to shareholders through dividends and share repurchases.
5. Analyst Recommendations: Analysts' recommendations for MillerKnoll's stock are generally positive, with a "hold" rating being the most common opinion. This suggests that analysts are cautiously optimistic about the company's prospects, but they may be waiting for more concrete evidence of earnings growth or market position improvement before issuing a more bullish rating.

What’s Happening in the Furnishings Industry:

Steelcase reports strong earnings. The office furniture manufacturer reported earnings that beat analysts' expectations, driven by strong demand for its products and cost-cutting measures. The company's shares rose 5% in after-hours trading.



Herman Miller's revenue declines. The furniture manufacturer reported a decline in revenue, primarily due to lower sales in its North American segment. The company's shares fell 3% in after-hours trading.



In conclusion, MillerKnoll's earnings offer more insights than initially meets the eye. The company's strategic focus on innovative solutions and quality, expansion of its dealer distribution network, and global scale have contributed to its order growth in the Americas Contract segment. Analysts' recommendations for the stock are generally positive, with a cautious optimism reflected in the "hold" rating. As the company continues to adapt to changes in customer preferences and market trends, investors should keep an eye on its earnings growth and market position improvement.