MillerKnoll's fiscal 2027 sales outlook now stands at $3.88 billion to $4.03 billion, a reduction from prior expectations that reflects first-quarter revenue of $923 million, down 3.4% year over year. The company maintained its adjusted EPS guidance of $1.85 to $2.15, citing disciplined cost management despite uneven demand across its contract and retail segments. Interim Chief Executive Officer Jeff Stutz noted that the quarter delivered solid margin performance and cash generation despite revenue headwinds.
Segment Performance and Margin Dynamics
The divergence in order trends defined the quarter's results. North America Contract sales fell 5.3% to $506 million, while orders declined 1.7% to $484 million, partly due to $55 million to $60 million in orders pulled forward into the prior fiscal year's fourth quarter. Adjusted operating margin in this segment dropped 70 basis points to 10.7%. Conversely, International Contract orders surged 17.3% to $181 million, driven by a notable project win in South Korea, though revenue declined 6.4% to $157 million. Global Retail sales rose 2.6% to $261 million, marking the eighth consecutive quarter of North American retail order growth.
| Segment | Sales (YoY) | Orders (YoY) | Adj. Op. Margin |
|---|---|---|---|
| North America Contract | -5.3% | -1.7% | 10.7% |
| International Contract | -6.4% | +17.3% | 4.6% |
| Global Retail | +2.6% | +4.3% | 7.0% |
Reported gross margin rose 320 basis points year over year to 41.7%, a figure that includes an $0.11 per-share benefit from IEPA tariff refunds. Excluding this one-time item, adjusted gross margin improved 150 basis points, driven by pricing realization. MillerKnoll generated $49 million in operating cash flow and ended the period with $580 million in available liquidity. The board declared a quarterly cash dividend of $0.1875 per share, payable October 15.
Outlook and Tariff Impact
For the fiscal second quarter, the company forecasts sales of $972 million to $1.012 billion, representing approximately 4% year-over-year growth at the midpoint. Adjusted EPS is expected to range from $0.43 to $0.49. Management estimated that new U.S.-Canada tariff actions will create an approximately $0.07 per-share cost impact for the full year. Chief Financial Officer Kevin Veltman stated that the company is pursuing mitigation efforts including inventory planning, supplier arrangements, and dual sourcing. The shift toward smaller-format Herman Miller stores continues as part of a focus on investment returns, with five to seven new store openings expected in the second quarter.