MillerKnoll Q4 Earnings Call Puts Focus on Retail Discipline

MillerKnoll, Inc. MLKN  used its fourth-quarter fiscal 2026 earnings call to shift attention from the quarter’s modest beat to what management framed as a more disciplined operating agenda for fiscal 2027. Incoming interim CEO Jeff Stutz said the company’s financial performance is still below its target.

That message came even as adjusted earnings and revenues topped the Zacks Consensus Estimate. Management centered the discussion on tighter execution, cost control, cash flow improvement and a retail expansion strategy built around smaller-format Herman Miller stores.

MillerKnoll Resets Its Priorities

Stutz, MillerKnoll’s chief operating officer and incoming interim CEO, opened the call by outlining three areas of focus for fiscal 2027: stronger operating discipline, sharper cost control and balance sheet improvement through debt reduction and better cash flow. He said the company does not need reinvention, but it does need clearer priorities and tighter financial execution.

That framing mattered more than the quarter’s headline numbers. Fiscal fourth-quarter adjusted EPS of 55 cents beat the Zacks Consensus Estimate of 52 cents, with a 5.8% surprise. Revenues of $1 billion exceeded the Zacks Consensus Estimate of $976.5 million by 2.8%.

MillerKnoll, Inc. Price, Consensus and EPS Surprise

MillerKnoll, Inc. price-consensus-eps-surprise-chart | MillerKnoll, Inc. Quote

For the full year, management said net sales topped $3.8 billion and adjusted EPS reached $1.86, underscoring a stable but not fully satisfying operating picture as the company heads into a transition year. The investor deck on page 14 also shows adjusted EBITDA of $357.4 million for fiscal 2026.

MLKN Finds Support in Contract Trends

North America Contract remained the clearest source of stability. Segment sales rose 6.9% to $530 million in the fiscal fourth quarter, while adjusted operating margin expanded 40 basis points to 10.4%, helped by volume leverage and pricing.

Orders in the segment fell 10%, but management repeatedly pointed to a distorted comparison from a prior-year order pull-forward tied to tariff-related surcharges and price increases. Adjusted for that dynamic, chief financial officer Kevin Veltman said orders were essentially flat year over year.

In Q&A, management sounded constructive on demand indicators beneath the reported order line. Stutz said project funnel additions, wins and backlog indicators improved year over year and sequentially, while its president of North America Contract, John Michael, said customers are increasingly focused on employee experience, collaboration and workplace strategy.

MillerKnoll Leans Harder Into Retail

Retail was the main strategic growth discussion on the call. Global Retail sales rose 5.5% to $295 million, comparable sales increased 3.6% and North America comparable sales rose 4.2%, while North America orders were up 8.7%.

Stutz said MillerKnoll will shift more new openings toward smaller Herman Miller stores of roughly 1,800 square feet. He said those stores require less upfront capital, ramp faster and generate payback in well under three years, while also serving as a lead generator for the contract business.

That change will shape the new-store cadence. MillerKnoll opened eight Herman Miller stores in fiscal 2026 and expects to open nine to 11 in fiscal 2027. It opened seven Design Within Reach stores in fiscal 2026 and expects five to seven this year, keeping expansion in that banner measured.

MLKN Uses Pricing to Protect Margins

Pricing remained a key lever across both retail and contract. Veltman said price-cost was slightly favorable in the fiscal fourth quarter and first-quarter outlook, supported by tariff mitigation, regular price increases and inflation surcharges.

President of Global Retail Debbie Propst said the company pushed through a net 8% price increase in North America during the fiscal fourth quarter. Propst said the consumer absorbed the move well, with discounting down 50 basis points from a year earlier and promotional days unchanged.

Management also tied future margin improvement to maturing stores and operating leverage. Veltman said Global Retail should deliver year-over-year operating margin expansion in all four quarters of fiscal 2027, with additional support from improved marketing efficiency and pricing flow-through.

MillerKnoll Faces Weak Spots Abroad and At Holly Hunt

The weakest area remained International Contract, where sales fell 3.8% to $179 million and adjusted operating margin dropped 470 basis points to 8.2%. Management cited macro uncertainty, regional sales mix, foreign exchange and program spending timing, with Europe, the U.K. and parts of Asia and Latin America under pressure.

Even so, executives highlighted stronger trends in China, India and Central and Eastern Europe. Stutz also said the company added nine dealer relationships over the past year, framing channel expansion as a low-cost way to widen customer access in international markets.

Another pressure point was Holly Hunt. Asked by a Sidoti analyst, management said the issues there are tied to costs, leadership and product development. Propst said recent product newness has not resonated, prompting restructuring and efforts to improve creative execution and operational leverage.

MLKN Outlook Keeps the Bar Measured

For the first quarter of fiscal 2027, MLKN expects revenues of $928 million to $968 million and adjusted EPS of $0.33 to $0.39. For the full fiscal year, management guided to revenues of $3.93 billion to $4.13 billion and adjusted EPS of $1.85 to $2.15.

Veltman said about 40% of full-year estimated EPS should come in the first half and 60% in the second half. He tied that cadence to improving store maturity, pricing benefits that build through the year and a return to a more normalized incentive compensation structure that adds about $25 million in year-over-year costs.

The balance sheet remains part of the story. The company generated $200 million in operating cash flow in fiscal 2026, ended the quarter with a 2.8 times net debt-to-EBITDA ratio and said debt reduction remains a central capital allocation priority alongside growth investments and the dividend.

Zacks Signals Stay Mixed

MLKN currently carries a Zacks Rank #3 (Hold), along with a Value Score of A, Growth Score of C, Momentum Score of C and VGM Score of B. Under the Zacks framework, the Value Score and VGM Score point to stronger value characteristics and a relatively balanced profile, while the Rank suggests a more neutral near-term earnings revision outlook. 

The Style Score framework places greater emphasis on A and B grades, especially when paired with a Zacks Rank #1 (Strong Buy) or 2 (Buy). A Zacks Rank #3 can still support a hold stance, but the rank can change as analysts update earnings estimates after the latest results and management guidance. You can see the complete list of today’s Zacks #1 Rank stocks here.

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