MLKN Q3 Earnings Meet Estimates, Sales Miss, FY'25 EPS View Down

MillerKnoll, Inc. MLKN reported third-quarter fiscal 2025 (ended March 1, 2025) results, wherein adjusted earnings met the Zacks Consensus Estimate and declined year over year. The net sales missed the consensus mark but grew on a year-over-year basis.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The quarter’s results were driven by strong demand in its Global Retail business, with retail demand in North America being robust. Although uncertainty related to tariff policy and other macroeconomic factors was unsettling during the quarter, the improving trends in certain key markets are encouraging for MLKN’s prospects.Going forward, the company aims to focus on growing its store footprint and expanding its product offerings to navigate through tough macro conditions and increase its profitability.MLKN’s Q3 in DetailThe company reported adjusted earnings of 44 cents per share, which met the Zacks Consensus Estimate but declined 2.2% year over year from 45 cents.MillerKnoll, Inc. Price, Consensus and EPS Surprise MillerKnoll, Inc. price-consensus-eps-surprise-chart | MillerKnoll, Inc. QuoteNet sales of $876.2 million missed the consensus mark of $922 million by 5% but inched up 0.4% year over year.Organically, net sales were up 1.8% year over year. Orders during the quarter amounted to $853.1 million, up 2.7% on a reported basis and 4.1% on an organic basis from the prior year’s level.MillerKnoll’s Segmental DetailsNorth America Contract: Net sales grew 1.4% on a reported basis and 1.7% organically from the prior-year quarter’s level to $468.2 million. New orders amounted to $434 million, down 1.8% year over year.The adjusted operating margin expanded 80 basis points (bps) year over year to 9.1%. The uptrend can be attributed to lower variable incentive compensation and focused cost control.International Contract: Net sales declined 5% on a reported basis and 1.5% organically from the prior-year quarter’s level to $145.5 million. New orders were $159.2 million, down 1.6% on a reported basis but up 1.4% on an organic basis year over year. The order growth from the APMEA region continued to be strong primarily in the Middle East, India and Japan, Mexico, Brazil and portions of mainland Europe. This was partially offset by lower orders in other regions.The adjusted operating margin contracted 260 bps year over year to 9.3%, mainly from deleverage on lower sales.Global Retail: This segment’s net sales grew 1.9% on a reported basis and 3.9% organically to $262.5 million from the prior-year quarter’s level. New orders amounted to $259.9 million, up 14.7% year over year on a reported basis and 16.9% organically.The adjusted operating margin expanded 80 bps year over year to 6.2%. The upside was backed by higher shipping revenues and increased leverage on higher year-over-year sales.MLKN’s Operating HighlightsIn the fiscal third quarter, MLKN’s gross margin declined 70 bps year over year to 37.9% from 38.6%. The downtick was due to unfavorable channel and product mix, lower fixed cost leverage and higher commodity costs.Consolidated adjusted operating expenses declined 1.6% year over year to $274.4 million, mainly because of lower incentive compensation and focused cost control in a challenged macroeconomic environment.The adjusted consolidated operating margin contracted 10 bps year over year to 6.6%.Financials of MLKNAs of March 1, 2025, MillerKnoll had $468.2 million in liquidity. It had $169.8 million of cash and equivalents at the fiscal third-quarter end, down from $230.4 million at the fiscal 2024-end.Long-term debt slightly declined to $1.28 billion from $1.29 billion reported at the end of fiscal 2024.As of the end of the first nine months of fiscal 2025, cash provided by operating activities was $138.4 million compared with $273.9 million in the prior-year period.The company repurchased approximately 0.8 million shares with a total cash outlay of $17.9 million during the fiscal third quarter.MillerKnoll’s Q4 and Fiscal 2025 GuidanceFor the fiscal fourth quarter, MillerKnoll expects net sales to be in the range of $910-$950 million compared with $888.9 million reported in the prior-year quarter. Adjusted earnings per share (EPS) are expected to be in the range of 46-52 cents compared with 67 cents in the prior-year quarter.The gross margin in the fiscal fourth quarter is expected to be in the range of 37.5-38.5%, down from 39.6% reported in last year’s quarter. Adjusted operating expenses are expected to be in the range of $287-$297 million compared with $278.8 million reported in the year-ago quarter.For fiscal 2025, MLKN expects net sales to be in the range of $3.618-$3.658 billion compared with $3.628 billion reported in fiscal 2024. The gross margin is expected to be in the range of 38.3-38.6%, down from 39.1% reported last year.The company now expects adjusted EPS to be between $1.81 and $1.87, down from the earlier expected range of $2.1-$2.17. This compares with the earnings of $2.08 per share reported in fiscal 2024.MLKN’s Zacks Rank & Key PicksMillerKnoll currently carries a Zacks Rank #3 (Hold).Here are some better-ranked stocks from the Consumer Discretionary sector.Life Time Group Holdings, Inc. LTH presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has a trailing four-quarter earnings surprise of 21.6%, on average. The stock has gained 44.1% year to date. The consensus estimate for Life Time Group’s 2025 sales and EPS implies growth of 12.9% and 37.9%, respectively, from the year-ago levels.Flexsteel Industries, Inc. FLXS currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 19.8%, on average. The stock has lost 30.1% year to date.The Zacks Consensus Estimate for Flexsteel’s fiscal 2025 sales and EPS indicates an increase of 6.6% and 67.3%, respectively, from the year-ago levels.RCI Hospitality Holdings, Inc. RICK currently sports a Zacks Rank of 1. The company has a trailing four-quarter negative earnings surprise of 62.9%, on average. The stock has lost 20.2% year to date.The Zacks Consensus Estimate for RCI Hospitality’s fiscal 2025 sales and EPS indicates an increase of 2.5% and 1,278.8%, respectively, from the year-ago levels.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flexsteel Industries, Inc. (FLXS): Free Stock Analysis Report RCI Hospitality Holdings, Inc. (RICK): Free Stock Analysis Report Life Time Group Holdings, Inc. (LTH): Free Stock Analysis Report MillerKnoll, Inc. (MLKN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks