MillerKnoll, Inc. reported a decline in financial performance for the three months ended August 31, 2024, compared to the same period in the previous fiscal year. Net sales decreased by 6.1% to $861.5 million, down from $917.7 million. This decline was attributed to reduced sales volumes in the Americas Contract and International Contract & Specialty segments, as well as the closure of the HAY eCommerce channel in North America. However, the company saw a 2.4% increase in orders, totaling $935.9 million.
Operating earnings fell significantly by 62.3% to $15.2 million, compared to $40.3 million in the prior year. The net loss for the quarter was $(0.5) million, a stark contrast to net earnings of $16.1 million in the same period last year. The loss attributable to MillerKnoll, Inc. was $(1.2) million, compared to earnings of $16.7 million previously. The effective tax rate increased to 66.2% from 24.4%, primarily due to a pre-tax loss and discrete impacts from stock compensation and research and development tax credits.
The Americas Contract segment reported net sales of $454.6 million, down 7.3% year-over-year, while the International Contract & Specialty segment saw a decrease of 6.5% to $213.5 million. The Global Retail segment experienced a smaller decline of 2.8%, totaling $193.4 million. Despite these challenges, gross margins remained stable at 39.0%.
Integration expenses related to the acquisition of Knoll significantly impacted operating expenses, which rose by $3.3 million (1.0%) compared to the previous year. Total integration costs for the quarter reached $28.3 million, a substantial increase from $3.9 million in the prior year. The company also completed a restructuring plan in fiscal 2024, which included workforce reductions and facility consolidations, incurring $30.8 million in charges.
As of August 31, 2024, MillerKnoll's cash and cash equivalents stood at $209.7 million, down from $230.4 million at the beginning of the quarter. Total liabilities increased to $2.61 billion, with long-term debt rising to $1.32 billion. The company reported a total stockholders' equity of $1.33 billion, a decrease from $1.39 billion at the end of the previous quarter.
Overall, MillerKnoll's financial results reflect a challenging quarter marked by declining sales and increased integration costs, alongside a strategic focus on managing liquidity and operational efficiency.
About MILLERKNOLL, INC.
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