Q1 FY2027
Filed Sep 22, 2026MillerKnoll reported first-quarter fiscal 2027 net sales of $923.4 million, down 3.4%, while adjusted diluted earnings per share increased to $0.53 from $0.45.
Gross margin expanded and adjusted EPS increased, supported by tariff refunds, pricing realization and Global Retail improvement, but total sales declined, North America Contract and International Contract sales declined, and the full-year net sales outlook was reduced.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $923.4M | – | (3.4) % |
| Organic net salesnon-GAAP | $924.5M | – | (3.3) % |
| Ordersother | $913.9M | – | 3.2 % |
| Organic ordersnon-GAAP | $916.2M | – | 3.5 % |
| Gross marginGAAP | $385.3M | – | – |
| Gross margin %GAAP | 41.7 % | – | 320 basis points |
| Adjusted gross marginnon-GAAP | $385.8M | – | – |
| Adjusted gross margin %non-GAAP | 41.8 % | – | 330 basis points |
| Operating expensesGAAP | $333.5M | – | 6.0 % |
| Adjusted operating expensesnon-GAAP | $320.1M | – | 3.9 % |
| Operating earningsGAAP | $51.8M | – | – |
| Operating marginGAAP | 5.6 % | – | – |
| Adjusted operating earningsnon-GAAP | $65.7M | – | – |
| Adjusted operating marginnon-GAAP | 7.1 % | – | – |
| Net earningsGAAP | $27.6M | – | – |
| Net earnings attributable to MillerKnoll, Inc.GAAP | $26.6M | – | – |
| Earnings per share - dilutedGAAP | $0.38 | – | 31.0 % |
| Adjusted earnings per share - dilutednon-GAAP | $0.53 | – | 17.8 % |
| Cash flow from operationsGAAP | $49.1M | – | – |
| MillerKnoll backlogother | $669.2M | – | – |
| Adjusted bank covenant EBITDAnon-GAAP | $389.8M | – | – |
| Net debt to adjusted bank covenant EBITDA rationon-GAAP | 2.75 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North America ContractAdjusted operating margin was down 70 basis points compared to prior year, primarily from deleverage on lower sales and inflationary cost pressure, partially offset by pricing realization and a benefit from tariff refunds. | $505.6M | – | (5.3) % |
| International ContractAdjusted operating margin was down 390 basis points year-over-year, primarily from deleverage on lower sales, showroom investments, timing of sales events and higher incentive compensation expense. | $156.8M | – | (6.4) % |
| Global RetailAdjusted operating margin was up 580 basis points year-over-year, primarily from a 410 basis point net tariff refunds-related benefit, along with pricing realization and cost savings, partially offset by the impact from opening new stores. | $261M | – | 2.6 % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Q2 FY2027 and Full Year FY2027 outlook
- RevenueQ2 FY2027 Net sales $972 million to $1.012 billion; Full Year FY2027 Net sales $3.88 billion to $4.03 billion
- Gross marginQ2 FY2027 Gross margin % 38.3% to 39.3%
- Operating expensesQ2 FY2027 Adjusted operating expenses $321 million to $331 million
- Tax rateQ2 FY2027 Adjusted effective tax rate 21% to 23%; Full Year FY2027 Effective tax rate of approximately 21.0% to 23.0%
- NoteQ2 FY2027 Interest and other expense, net $15.8 million to $16.8 million
- NoteQ2 FY2027 Adjusted earnings per share - diluted $0.43 to $0.49
- NoteFull Year FY2027 Adjusted earnings per share - diluted $1.85 to $2.15
- NoteEstimated $0.07 per share unfavorable impact from Canada-related tariff costs over the next three quarters, as well as the $0.11 per share net benefit from tariff refunds in the first quarter
- NoteOpening 14 to 18 new retail stores, including 5 to 7 new store openings in Q2
- NoteCapital expenditures of approximately $125 million to $135 million
Capital returns
- On July 14, 2026, MillerKnoll's Board of Directors declared a quarterly cash dividend of $0.1875 per share.
- The dividend is payable on October 15, 2026, to shareholders of record on August 29, 2026.
What drove it
- Gross margin increased primarily from the tariff refunds and price realization, partially offset by inflationary cost pressure.
- The Company recognized an approximate $10 million net increase in operating income related to refunds of previously paid IEEPA tariffs.
- Operating expenses were driven primarily by higher compensation expense, including variable incentive compensation, and higher new store expense, partially offset by improved cost management.
- Global Retail orders were up 7.5% in the North America region, year-over-year.
- New retail store openings in Q1 included a DWR store in Raleigh, NC, and Herman Miller stores in Columbus, OH, St. Louis, MO and San Antonio, TX.
Concerns
- Net sales were down 3.4% as reported and down 3.3% organically, year-over-year.
- North America Contract net sales declined 5.3% and International Contract net sales declined 6.4%.
- International Contract adjusted operating margin declined 390 basis points year-over-year.
- The full-year FY2027 net sales guidance of $3.88 billion to $4.03 billion is below the stated previous guidance of $3.93 billion to $4.13 billion.
- The full-year outlook includes an estimated $0.07 per share unfavorable impact from Canada-related tariff costs over the next three quarters.
- The tariff refunds contributed 110 basis points of net improvement in operating margin and a $0.11 per share net benefit to diluted earnings per share.
What to watch
- Q2 FY2027 net sales guidance of $972 million to $1.012 billion.
- Q2 FY2027 gross margin guidance of 38.3% to 39.3%.
- Q2 FY2027 adjusted operating expenses guidance of $321 million to $331 million.
- The expected $0.07 per share unfavorable impact from Canada-related tariff costs over the next three quarters.
- Execution on opening 14 to 18 new retail stores for the full year, including 5 to 7 new store openings in Q2.
- Demand trends in North America Contract and International Contract, where first-quarter sales declined despite consolidated orders growth.
Balance sheet and cash flow
- Liquidity, as of August 29, 2026, of $580.4 million reflected cash on hand and revolving credit facility availability.
- Cash and cash equivalents, end of period $178.6 million.
- Cash flow from operations of $49.1 million, compared to $9.4 million in the prior year.
- Investing activities $(32.1) million, compared to $(30.5) million in the prior year.
- Financing activities $(4.8) million, compared to $(9.2) million in the prior year.
- Short-term borrowings and current portion of long-term debt $28.4 million.
- Long-term debt $1,270.4 million.
- Total debt, less cash, end of trailing period $1,071.4.
- Net debt-to-EBITDA ratio, as defined by our credit facility, of 2.75x.
- Near term scheduled debt maturities: $22.0 million in fiscal 2027; $25.8 million in fiscal 2028; $89.8 million in fiscal 2029.
Analysis
MillerKnoll's first-quarter fiscal 2027 results showed a split between weaker sales and materially improved profitability. Net sales were $923.4 million, down 3.4% year-over-year, while organic sales declined 3.3%. Orders increased 3.2% as reported and 3.5% organically to $913.9 million, led by International Contract and Global Retail. Consolidated backlog was $669.2, compared with $690.9 in Q1 FY2026.
Gross margin increased to 41.7% from 38.5%, and adjusted gross margin increased to 41.8% from 38.5%. The company attributed the expansion primarily to tariff refunds and price realization, partly offset by inflationary cost pressure. The approximate $10 million net operating-income benefit from tariff refunds contributed 110 basis points of net operating-margin improvement and a $0.11 benefit to diluted earnings per share. GAAP operating margin was unchanged at 5.6%, while adjusted operating margin rose to 7.1% from 6.3%.
Segment performance was uneven. North America Contract sales declined 5.3% and adjusted operating margin declined 70 basis points, reflecting lower-sales deleverage and inflationary pressure. International Contract sales fell 6.4%, although orders increased 17.3%; its adjusted operating margin declined 390 basis points amid lower sales, showroom investments, sales-event timing and higher incentive compensation. Global Retail was the growth engine, with sales up 2.6%, orders up 4.3%, and adjusted operating margin up 580 basis points to 7.0%. The company opened four retail locations during the quarter.
Cash generation improved, with operating cash flow of $49.1 million compared with $9.4 million in the prior year. Liquidity was $580.4 million, cash and cash equivalents were $178.6 million, and the net debt-to-EBITDA ratio was 2.75x. The board declared a quarterly cash dividend of $0.1875 per share. The company guided Q2 net sales to $972 million to $1.012 billion and adjusted diluted EPS to $0.43 to $0.49.
For the full year, MillerKnoll reduced net sales guidance to $3.88 billion to $4.03 billion from previous guidance of $3.93 billion to $4.13 billion, while maintaining adjusted diluted EPS guidance of $1.85 to $2.15. The outlook incorporates an estimated $0.07 per share unfavorable impact from Canada-related tariff costs over the next three quarters and the first-quarter $0.11 per share net tariff-refund benefit. The central issues for the remainder of the year are whether orders convert into sales, whether Global Retail gains persist through continued store expansion, and whether pricing and cost management can offset contract-market deleverage and tariff-related costs.
Management, verbatim
We delivered strong first quarter earnings, above expectations, reflecting solid execution across the enterprise. Despite softer than expected demand patterns in the quarter, we remain confident in our earnings outlook for the second quarter and full fiscal year.
Jeff Stutz, Interim Chief Executive Officer
Not in the filing
stated, not guessed- Free cash flow was not reported.
- Share repurchases were not reported.
- Prior-quarter comparisons for reported operating metrics were not reported.
- Q2 FY2027 operating income or operating margin guidance was not reported.
- Q2 FY2027 GAAP earnings per share guidance was not reported.
- A separately provided previous-release outlook was not included for formal actual-versus-prior-guidance comparison.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.