MillerKnoll (MLKN) 18 Dec 242025 Q2 Earnings call transcript

Good evening, and welcome to MillerKnoll quarterly earnings conference call.

As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference, Wendy Watson, Vice President of Investor Relations. Please go ahead.

Good evening, and welcome to our second quarter fiscal 2025 conference call. Andi Officer. Executive are Stutz, and me Financial Chief with Owen, Officer; Chief Jeff On

for Q&A President them contract; Joining the and of Michael, Debbie Americas President Propst, Vice of Retail. session Global are John

on our hours. replay XXXX, market on of will XX, our the issued ended is website Relations available and after earnings the call closed for We quarter our release at XX November Investor it today, website within available press millerknoll.com.com. be A

Andi, to please our I turn over Before call regarding harbor information. remember forward-looking the safe

the information are in expressed During those risks, that forward-looking context the in and results which call, detailed other may actual factors, release. press today's information than and different or unknown of these and implied. is to management may be the cause Please discuss involves evaluate which uncertainties factors, forward-looking known the

today's are or except law, assume no of The obligation required forward-looking may as statements. by update date, statements be these we and to made as supplement

certain and refer will financial non-GAAP our the includes non-GAAP relevant We press release reconciliations. also to metrics,

I'll to Andi. that, turn over the With call

so Wendy. for everyone. evening, Thank much Good you joining us Thanks, tonight.

bear may me. voice, hear from please from recovering little of you a infection, so I'm bit respiratory As a my with

strong performance fiscal very to MillerKnoll the report I'm XXXX. second quarter pleased of in delivered year

We we're vary which by ahead. year seeing be businesses, continue momentum with to overall leading indicators, segment, picture. optimistic Based in demand our on for the our along several of strengthening

of year. they've is the of balance will ahead this year, nicely recovered a guidance the trending last expected the later are in Jeff our that for reflected than This orders at call. discuss slower at While point year in in the pace we

consecutive pricing are from this project continues up of Americas year-over-year. order requests third And in and Transit customer in quarter, funnel forward, growth a highlights all the looking segment growth. activity and orders year-over-year some to such sales with indicators additions, key segments. our to mockup second leading contract period MillerKnoll, be up in on Moving driver as

the East & brands Specialty we continue excitement thrilled segment, the strong internationally. Middle parts to our and Asia. building the International We're see in for is see Within of that order growth to

One and our is advantages of brands scale competitive global our the our collective reach. alongside of of key power

in year. mentioned I compared our date, and opened quarter, have last doubled appointments the in September, more MillerKnoll we same As to flagship than last period to we client London,

some building momentum have in segment that We initiatives are well. as this great

in to making offer of complement For ability the center utilize Belgium, example, efficient the new full with of it across now our more them our opening Europe, in textiles to a have brands. portfolio fulfillment we of European

to our XX-day retail and runs from Friday very our file year. third both orders Turning important this year-over-year the a Thanksgiving, Black mid-single-digit segment. tugging saw promotional period. This during cyber and in fiscal in before second holiday quarters Tuesday period increase Friday We

This gives and to positive new better categories continue we're performing assortment. Additionally, confidence cyber offer the and strength a of and in complementary business, very concierge period. expectations launches us year holiday with product above performing we several pleased our positive services customers, prior promotions stores, including new the product trends our promotional to product response the with design invest to in than all our

to Fairfax, Reach XXXX, spring an to the as studios Springs, Las we excited very Miller XXX% introduce We're well compared to designs assortment Herman product XXXX, in new spring early product open plan and launches Virginia. Vegas, as XXXX. in expanded In in Nevada in California above also with Palm store

are a tariff future the looking supply tariffs. price to imported topic proposal. of sources past identifying policy in of increases. advanced number of and response managed options tariff-driven chain very supply, We've in attention purchasing tariff goods close paying alternative options include and adjustments for a possible could Moving to to These to mitigate to and if cost needed. We're similar and materials of the through changes

that of more to these and footprint will is chain manufacturing we experience come responses appropriate from advantage. combination know actions our details and We global avail. tariff supply agility as which an determine is And

other We're of positive also customers. from any closely administration. have watching proposals business our could and on They impact that a our

in extension of The result quarter. free for sustainability of the cuts, added of announced our the elimination We tax May impressive the product depreciation by of of globally customers. by and and XXXX [indiscernible] particular, flow from May of XXXX. XXXX and We could us portfolio North many bonus cash higher reinstatement for made in in strides our American this

meet we but Our beyond or go to safety regulations products currently aim exceed minimum global standards. PFAS

continue Miller also lower of cycle Herman made sustainable version out a carbon with more the options. and product launched mortgage content [indiscernible] refreshed popular roll to We a footprint.

personally constantly research As a innovation With support return and customers team. we insights and that relationship-based design our connect support this is through workspaces, to to evaluating create within work. more leader, spaces industries team to recognizing both the need and these more

that. customers wins design our to the have we Through impact do tools programs, help

progressing half we second close, start year, by many encouraged fiscal had we're in slowly improvement businesses, across we're our the the seeing of is we the building of continue our while more than of the year. To macroeconomic to and trends momentum the expected expect at

be momentum. that cash a business have drive and continued we global channels advantage, us balance opportunities and and allow strong on of will capitalize continue flow to and sheet competitive diverse to Our brands collective strength

partners I'm that and been in that to on for coming December This everyone customers we're past always XXXX. supporting one we've I collaborating another. and reflect a the achieved. the together our milestones where appreciate of year want with and clients, and to finally, next. year inspire work And has our our headed we together, and about the I chance calendar colleagues now we've thank across accomplished to brings year proud all associates

XXXX. our share remainder for more fiscal and it now over detail the discuss to results outlook turn of our I'll to Jeff in

Terrific. Thanks, Andi, and good evening, everyone.

what for improved segments second despite challenging activity from our And the we're continue demand a environment in set just is each to that pleased has optimistic Andi our As moving of business a be table perspective, remained we mentioned, quarter forward. results. with

with net organic the increase our representing expectations, consolidated basis X.X% for reported $XXX were and million, sales a on X.X% year-over-year a second Consistent increase. quarter a

consolidated orders an million $XXX quarter Second and on down were reported basis. of organic lower X.X% as X.X%

this Thanksgiving order timing Whereas important by our QX. cyber QX our X-week in one reminder within period between Now subsequent last Andi quarter period split this within were as quarter, it and mentioned equally is the shift retail you numbers and promotional entire that landed is impacted digest levels business. entry the year, promotional that fiscal this year, that second

profitable channel In We are maintained margin XXXX the and year, mainly gross managing expansion margin product to our XX.X%, consolidated in pleased positioning was the quarter, growth. while last to to strategically and have which down slightly due gross delivered that mix. expenses was ourselves for just operating we

Turning agreement balance turns. repurchased debt-to-EBITDA to and fiscal dividends X.XX our the shares X finished flows million the for $XX second quarter year, a flow total a quarter second million $XX sheet. cash operations We lending ratio of $XX returned and net defined share as first through investment our and of generated approximately We we've of the through in we X And the cash buybacks. shareholders million million with to approximately months the from in quarter. in

to our segment. Contract were organically going million, to And with for net the by segment, same Americas up from move $XXX a year sales I'm our X.X% ago. the Within that, quarter performance quarter

as up lower were we coming nicely, order in new orders over quarter expected, highlighted, Andi X.X% consecutive the growth they on basis, were segment. third While marking of quarter than the in last Americas our year $XXX organic million in of an

and fiscal funnel well second customer and Order ahead demand pricing entering activity requests continue trends the to supportive strengthening confidence mockup growth of in overall as all quarter environment improved the the remain year, half year. last of a additions, our funnel, progressed,

primarily incremental leverage margin up quarter XX.X% to operating overhead Americas segment was sales strong year, last higher And due from basis, fixed in from price operating and increases. was year. compared prior quarter, Second margin in X.X% the a benefit to in to compared on X.X% points an net basis adjusted XX the on costs the

were in over just basis decrease X.X% year-over-year. X% million, reported quarter segment, a up Orders basis over organic on on a were during the reported year-over-year Contract sales of and million, In second net a the an and up on just International $XXX down Specialty the X.X% and X% $XXX quarter basis organically.

other during the growth be the at textiles quarter. region continues lower offset luxury and but Order in regions orders in softness and was clients HUNT APMEA HOLLY to with by strong, in

is X.X% on reduce as second margin expenses. be The we the operating the to a X.X% continues points our and In year. actions margin of XX.X%, reported margin are was down specialty Specialty basis segment basis operating of lower compared was quarter, adjusted some on past year-over-year from International to deleverage to strong primarily And maintaining the XX businesses. sales last benefits operating in which in

reported our decrease We basis. X% reported quarter Turning down And is of organic retail to net this $XXX the to and sales last same quarter second relative of in segment. million. on a the year, X.X% an

reported X.X% orders year New on year. the to $XXX down to X.X% million, quarter last basis down last were compared a organically the in and

segment basis marketing for in operating ago. a for than the an this by has this rates leverage adjusted note As XXX retail period and far the I year's on digits period. And reduced compared year year-over-year on improvement given organic was would points in last which expected X.X%, single margin the of a shift to that in thus increased. order the to in timing mentioned, X.X% the shift, X% promotional both in And basis, was promotional second sales important was after lower orders second And prior is low holiday the decrease ago. up driven Operating margin seasonal the order be this December, quarter versus adjusting only in spend year, quarter year sales it's the year. and to holiday

turn I'll outlook. near-term and our Now to guidance

most market in pointing our Contract mentioned business As Americas are conditions. improved Andi remarks, leading of indicators the in opening her to

and indicators, Billings home CEO trends Index, external we're sales I mentioned, are by and the Additionally, important our Architectural just improvement. measures showing Retail very Global including in luxury sentiment segment. as dealer December And the month-to-date encouraged

of the and the our of both support the our fiscal demand year. second in improving internal half believe most indicators in of We markets expectation external

While timing in comes the to our confidence Chinese year by is fiscal growth. New the third softness to that our contract businesses full quarter our be impacted typical holiday, for guide and a by our poised international Americas the reflects close business we year and our of expect calendar as seasonal Year

softer that said, narrowed expected, earnings initially year that we a full given guidance with of quarter. share expectation than slower our accommodate range developed our reflect to during order being This between to adjusted XXXX. to midpoint expectation we updated quarter the fact full and second third year of rates And fiscal have the EPS lowering $X.XX, sales the and our $X.XX continues per over growth

specifically, the Adjusted we share. per For between million expect net $X.XX quarter diluted to range sales million. $X.XX third expected earnings are $XXX between to and range and $XXX

third QX in guidance which consideration the orders second we Our in holiday shift the period business, retail the the $XX our quarter from with $XX million along and seasonal into our quarter. estimate in fiscal third takes slowdown quarter's net typical sales for million into promotional approximately shifted

please other to guidance, release. all to For refer related press our our details

we'll our that and we'll take turn Now the financial the overview the call over to of the remainder year, for questions. your performance the of operator, and outlook with

first with question of from Our Instructions] the [Operator Burns comes Greg Sidoti. line

kind color exposure, might just have coming maybe potential we on Or should you the give us on still up. most knows on think might profitability I out a that's at product going question when maybe how shape the you forward? that exactly specific or additional give No that's up of color lines us in impact you business' is the the one little you whether the more can business or But bit look air. to manufacturing of going and just about Mexico? your business, with it's issue any appreciate tariff where how the

XXXX. fairly is and you -- This fact I we've keep the through I'll Greg. my one round high that highlight will this been level, know and Jeff. comments in Sure, but previously remember, well as

Andi exposures, just into I as her in a playbook we the before those. of comments, take. to maybe So have do And I'll get highlighted reiterate actions

action identify got of opportunities, taken to and supply. we've alternative We've sources

the We're level year. the first we can. potential come here can't component the we're that we impacts. any on also that depending Now buying doing we very everywhere, details think we have but actions low of in of certainly consider, will after of do are risk where advance parts that advance in of the And pricing it that out we tariff kind

had and well we've which options that can in we strategies applying around some we transfer limit for Additionally, think duty as success impact. exclusions, the pricing the got round as last drawback help

the the we'll and will, that's you combination if pick of So things as those playbook, -- the necessary.

lot in exposures, China Canada exposure But business. the regions world a through not would us of really of and But the of to came to the terms on Canada, and X Mexico be the Knoll big our acquisition. exposure

we've As manufacturing some you wood got Toronto know, case of in for goods. our

those are areas forward. most watching So will that move the we as X be we closely

supply for so would build and spent making lot I on to just chain that with tariffs, rationalize of on region time we our experience our effort now. sure last Greg, to manufacturing and we region add mostly that, And that based we round and say our a of

a exposed playbook tariffs like But point, we to are places being. end Jeff's been than up in less those depending past. on So have a China we the have to lot what we ready

Okay. in a the then But just Great. development that more. can about saw bit you broadly, elsewhere little terms Americas And or more was on you maybe of it also. slower maybe the order talk maybe

on times still part that sales this I of longer you the Is maybe you're kind seeing last extending, what there's ship call, maybe to mentioned that think book quarter? cycles. of were

all I little much, us think our think the was I a throughout saw preelection. of country, to slowdown don't quarter bit bit I a has book this Greg. the And that businesses. for changed last little we ship really too in But in unique a think of

you things started off, to see when related at think I really it Post pick election, so the look And started how quarter was that. to up. we

something it's think don't be repeatable. concerned I about So to or

don't add to really John, then don't has And just ship order but our you in want I nothing last there I think. know to if changed to call,

No.

than think longer throughout still similar. for did a with they steady and pretty for pretty goes it's that are consistent more I pre-COVID it's but Customers planning project, some in quarter. times into planning everything construction advance perhaps lead been the

internationally, different some Can And we there? are you Knoll I about But the dynamics a different the I sounds guess, just was just than markets. more little then talk wondering you it's were also, Okay. were bit orders, demand making internationally. those across the down business expecting. and in It terms the growth terms of some how you've maybe And of dealer network in and impacting those? investments the integration with been right of the are at of Where now? like

Yes.

internationally think our I distribution the board, increase we continue Greg. dealer to across

full-line add that great to continue We dealers. We've a had MillerKnoll far. so success with

I Americas little to international to business be use term, project-based in business. tends a business, the think it's a general Americas see technical at in look what more the therefore, it And much you Contract lumpier we compared than Contract. when to a

a We're still still very strong seeing active We're demand. seeing funnel.

macroeconomically ride the those Europe is and of out, going right business now, be but a tends lumpier. I nature think little uncertainty I it a and in politically waves there's with amount that's the everything think certain that of to on we

Jeff, you add would anything?

that's No, think on. I spot

The line Your Garner next Reuben of question comes Benchmark Company. the from with

Thank evening, you. Good everybody.

Let's see.

last was then, dealer started of and as before things feedback but any softer months I wondering your get it maybe said I what like you pretty gotten you of post our from pick are survey closer on up to especially looking feedback XXXX. So since could know to customers? has the if X the kind positive, we election any on kind the the few you've election. been comment readings was

all try There's over demand time the right your we're the dealer a it track will are the market to quarter XX-month in across Things indicators this direction. in definitely continues anticipate really going and same shows to amount we Reuben, what this fair about year. like if activity is be is to think they of I John. over board. as survey up you the say additions XX% forward, sentiment Sure, And last pointing our improve. funnel, would that leading

are XX%. that those customers almost before activity, Mockup decisions happen make up right things

all, from well. what indicators tracking network So in consistent the dealer and the all as are that's with hearing we're healthy, all we're

Great. on the Okay. guidance. some And clarifications then Jeff,

incline. of if saw I'm at a operating of little that the the bit little implies the first half that more same quarter doing math think kind year-over-year, of in margin of the I to or the right, of terms bit third we little in a bit margin -- a maybe pressure flattish

fourth your a line The drive is of expectation that fourth top what that's surge that a assumes, to there something kind is in that? this depending the it to margins. of in Am I in like in right? revenue pretty going on going another move big it that number form quarter, doing Is come the big acceleration quarter? Or the looks implies

expectation can the -- than I quarter in terms Yes, would we top Reuben, think to it's leverage. our see even our that you latter guide, this would in with and QX you the as -- the sensitive saw are -- of former. line in be We expect shifts more

the so because got a margins some lower And QX gross of and our big channel degree, higher some And that's in to we've we're mix in tick reason seeing you've around margin moving down that's businesses. got revenue. some slight

John, in But we our that revenue. tell acceleration to our based the that retail we're fairly internally expectation, on positive expect us would from you business what should heard seeing relative indicators an

more improved in but line higher don't margin that more in more a -- we're of So typical leverage It's view. massive on it's story top sales, surge think expecting. I it's be a our would

it's assumption we line is can so differently top tell And us we that that think that, adjust? can than you trending what if

a haven't we revenue provided year full Reuben, guide. Well,

what margin -- going way, we modestly don't gross going of real the the the do, to tell not you. expect expect going you variability we would by uptick everything manage quarter. can quick, sales, to do that second OpEx. on to those is beyond -- so I'm expectation can a we're we Reuben, we're don't But that for can course, operating in expenses everything quantify to just improved from prudently higher So I and it we be And significant

what be to I said I what you margin quarter Okay. second -- would meant. better quarter, said think think than just gross but clarify, And the fourth that's you modestly you don't

meant. what Yes. That I is Yes.

I think revenue. would we better to because be you'd expect modestly better expect it

of Gordon Water with the Research. comes Your next question Brian from Tower line

discussions your are meaningful directional kind In could there potentially partners. terms you're over what hearing of in and been with or of how in the you that thinking of of the customers next hybrid And policies? couple Have affect terms any from like home work quarters? trends business

Actually, don't John, you start? why

is to be This that. John. take Sure. I'd happy

technology connect things been right, the last they nearly for at I in whether well, that's mentoring, consistent as with think people companies, -- lot virtually than few get in doesn't quarters ways, person. person what's back to learning just do the the seeking to their looking informal all right, they're that we're a conversations ways ways the executives connection, are for And and facilitate problem-solving, are that to office. in attract their people to is having harder they're

And over larger of ability develops to want think obviously, they're everybody how regard, in terms help that people's flex use and our their I to industry to engage of in with and that And in the planning space common the so to some participate it. section ownership time. to and adapt desire there's wants is that beginning employees a

that environment know space over is do want people all and the to going sure we work So them to time that allows to that. make got they've change

in effective how focus and in that a targeted those the as say virtual they're general, are in robust, of the things associates and not on their very would to customers I that office, back get them perspective. they terms engage conversations with focused So particularly are from

people And office, getting back much over quickly. if, I to so us the revitalize really another are conversation our just not much have I think their in typically the people to looking a actually quarters, and here sign but projects and small in there. environment last large think the which for encouraging how to when increased several means has see how is really area that versus shifted

So we're both those things. encouraged by of

those makes was follow definitely kind quarter, you the I quite greater noted was million larger I actually if sense. performing $X the up wondering been how category Last of give to could up orders, last business That of guys little than bit going you us with question. was has And on over the color that had quarter. of strongly. a segment that that

Same we were here. us. $X Jeff above really the growth was Brian, projects quarter for encouraged. category Yes, million. was this highest That Again, of

So has continued. that trend

the next Capital Group. Fuhrman comes line Craig question from Your with Alex of Hallum

matter for up retail retail It has were was business see about year-over-year a weekend for a Thanksgiving? we corner nice now. strategy Thanksgiving of period. given to potentially Is a the this during growth? beyond should a to curious of the how little starting and and that back promotional just really been the orders that around I'm Or this important beginning think that well-executed down turning get while was to retail

But Alex, think it's I Debbie's Yes. here. both.

answer I'd with to the So have some details. like

Alex, thanks for question. the

think I point. it's your latter So

promotional we think period. our I executed well

been towards they deliver. working with many the momentum we have that initiatives as is driving of However, combined

few a just than performing grow to examples of and newness So is better ever. those are continues

have data the over customer data capabilities like platform add marketing new then last honed attribution. and Our few tools years been of our with the

I'll of up last in quarter X while cost acquire that. you was XX% on So year, for give just the customers from because was we're the noise. significant return ad seeing results X% our election spend data to up

So economics. really we're marketing seeing nice

quarter. in outreach, stores addition those these X year. initiatives the are above factors more we new have to average pipeline business values, as then services our Our last selling things the And in initiatives, last such order is design XX% our in driving small across

happening what's So we growth do to expect macroeconomic continued and in momentum, trends. beyond the we see expect

Andi remarks. the are and no Owen closing CEO, questions, floor any to back President for there turn further we As

your on support conference everyone, everyone hope Thanks lovely next We on our a call. continued you we and updating you. the look I has appreciate season. Thank MillerKnoll, for to holiday call. forward joining of again, us quarterly

Thank you call our This joining now for our conference concludes today. call.

may disconnect. now You