MillerKnoll Reports 2.2% Net Sales Increase, First Year-Over-Year Growth in Two Years

MillerKnoll, Inc. reported a net sales increase of 2.2% for the three months ended November 30, 2024, reaching $970.4 million, compared to $949.5 million in the same period last year. This marks the first year-over-year sales growth in two years. However, for the six-month period, net sales decreased by 1.9% to $1.831.9 billion from $1.867.2 billion. The company's gross margin for the second quarter was 38.8%, a slight decline from 39.2% in the prior year, attributed to an unfavorable product mix. Operating earnings increased to $62.5 million from $60.4 million year-over-year, while net earnings attributable to MillerKnoll, Inc. rose to $34.1 million, up from $33.5 million.

The Americas Contract segment saw a notable sales increase of 5.9% to $504.2 million, driven by higher sales volumes and price increases. In contrast, the Global Retail segment experienced a decline of 5.3% in net sales, primarily due to a shift in the timing of the holiday promotional period, which affected sales volume. The International Contract & Specialty segment reported a modest increase of 2.1% in net sales. The company’s total orders for the quarter decreased by 2.3% to $921.9 million, reflecting a mixed performance across segments.

MillerKnoll has been actively managing its operational costs, with total operating expenses rising by only 0.9% to $314.5 million, despite increased marketing and compensation costs. The company also reported a significant reduction in restructuring expenses, which were not incurred in the current quarter compared to $1.8 million in the previous year. The effective tax rate for the quarter was 21.8%, slightly higher than the previous year's 21.4%, influenced by a change in the mix of earnings across various tax jurisdictions.

Looking ahead, MillerKnoll anticipates continued challenges from macroeconomic pressures but remains optimistic about growth in certain areas of its business. The company plans to focus on integrating its operations following the acquisition of Knoll, which is expected to yield cost synergies. The company’s liquidity position remains strong, with cash and cash equivalents totaling $221.1 million as of November 30, 2024, and available borrowings under its revolving credit facility amounting to $249.3 million. MillerKnoll expects to maintain adequate liquidity to support its operations and capital needs in the near term.