MillerKnoll, Inc.

Consolidated first-quarter net sales were $923 million, down 3.4% year over year, and consolidated orders were $914 million, up 3.2% reported and 3.5% organic. Consolidated backlog was $669 million, down 3.1% year over year. Reported gross margin was 41.7% and adjusted gross margin was 41.8%, helped by $16.5 million of IEPA tariff refunds; excluding that benefit, adjusted gross margin improved 150 basis points year over year. Adjusted EPS was $0.53 versus $0.45 in the prior year, or $0.42 excluding the tariff refund benefit. For Q2, management guided to sales of $972 million-$1.012 billion, gross margin of 38.3%-39.3%, adjusted operating expenses of $321 million-$331 million, and adjusted EPS of $0.43-$0.49. For FY27, sales guidance was reduced to $3.88 billion-$4.03 billion, while adjusted EPS guidance was maintained at $1.85-$2.15; the outlook includes an estimated $0.07 per share unfavorable impact from recent U.S.-Canada tariff actions.

Jeffrey Stutz emphasized that the company is sharpening operational discipline, keeping costs aligned with revenue, and allocating capital more selectively. He said the team is focusing resources on the highest-value growth initiatives in North America contract, international contract, and global retail, while also using debt reduction as a priority in FY27. His tone was constructive but measured: he called the quarter solid on margin, earnings, and cash generation despite revenue headwinds, and said the company remains optimistic about demand trends, especially in North America.

Kevin Veltman detailed the financial performance: $923 million in sales, $914 million in orders, 41.7% gross margin, and $49 million in operating cash flow. He noted $33 million of capital expenditures, $580 million of available liquidity, and a net debt-to-EBITDA ratio of 2.75x. He said the tariff refund contributed 180 basis points to gross margin and about $0.11 to EPS, while the FY27 outlook now embeds an estimated $0.07 per share tariff headwind; he also pointed to $3 million-$5 million of expense savings reflected in the OpEx bridge.

Analysts focused on why North America contract demand stayed soft despite positive funnel metrics, and management said projects are taking longer to convert, especially in public sector and healthcare, with some timing issues rather than a structural slowdown. They also addressed retail trends, saying softer June and July results were the main driver of the full-year sales cut, while August rebounded strongly and Q2-to-date trends remain healthy. On margins and capital allocation, management said pricing actions are flowing through, inflation is still a headwind, and priorities remain growth investment, debt paydown, the dividend, and selective buybacks.