MillerKnoll, Inc. (MLKN) Q2 2026 Earnings Call Transcript

Adjusted Earnings Per Share (EPS) $0.43, exceeded expectations due to stronger-than-expected sales and gross margin.

Consolidated Net Sales $955 million, down 1.6% year-over-year on a reported basis and 2.5% lower organically. The decline was expected due to $55 million to $60 million in pull-ahead activity in North America contract that shifted sales into the first quarter.

First Half Consolidated Net Sales $1.9 billion, up 4% year-over-year, demonstrating the strength of the business.

Orders for the Quarter $973 million, up 5.5% as reported and 4.5% higher on an organic basis, reflecting improving demand and effective growth strategy execution.

Consolidated Gross Margin 39%, includes approximately $1 million in net tariff-related costs. Proactive mitigation actions are expected to offset tariff costs in the second half of the fiscal year.

Operating Cash Flow $65 million, contributing to a liquidity position of $548 million.

Net Debt-to-EBITDA Ratio 2.87x, comfortably below lending covenant limits, reflecting disciplined capital allocation and financial flexibility.

North America Contract Segment Net Sales $509 million, down 3.1% year-over-year due to the prior quarter's tariff-related pull forward. First half segment sales were up 4.1%.

North America Contract Segment Orders $507 million, up 4.8% from the prior year.

North America Contract Segment Adjusted Operating Margin 9.7%, down 50 basis points year-over-year, primarily due to deleverage on lower sales.

International Contract Segment Net Sales $171 million, down 6.3% on a reported basis and 9.2% organically year-over-year.

International Contract Segment Orders $162 million, up 6.6% year-over-year on a reported basis and 3.4% organically, driven by strength in Europe, the U.K., China, and India, partially offset by lower orders in Korea and the Middle East.

International Contract Segment Adjusted Operating Margin 9.7%, down 280 basis points year-over-year, primarily due to deleverage on lower sales and regional and product mix.

Global Retail Segment Net Sales $276 million, up 4.7% on a reported basis and 3.4% organically.

Global Retail Segment Orders $304 million, up 6% year-over-year on a reported basis and 4.5% organically.

Global Retail Segment Adjusted Operating Margin 2.1%, down 170 basis points year-over-year, primarily due to costs related to new stores, net tariff costs, and foreign currency impact.