MillerKnoll's Q1 Earnings: What Investors Should Anticipate

Author: Hannah Lewis Updated: 09-18-2024 02:42 PM

MillerKnoll's Upcoming Earnings Report

MillerKnoll, Inc. (NASDAQ: MLKN) is gearing up to announce its earnings results for the first quarter of fiscal 2025. The report is expected to be released shortly after market close. Investors are looking forward to understanding how the company has performed amidst challenging market conditions.

Recent Performance Overview

In its last reported quarter, MillerKnoll surpassed the consensus earning estimates by an impressive 26.4%, showcasing a significant year-over-year improvement of 63.4%. However, net sales fell short of expectations by 1.1% and demonstrated a decline of 7.1% compared to the same period last year.

Remarkably, the company has maintained a track record of exceeding expectations, achieving earnings that topped the consensus in each of the last four quarters, with an average surprise rate standing at 29.6%.

Estimate Trends for Q1 Performance

The Zacks Consensus Estimate for MillerKnoll's first-quarter earnings per share has remained stable at 42 cents over the previous months. This figure suggests a growth of 13.5% compared to the reported EPS of 37 cents from the prior year. However, the expectation for net sales sits at $892 million, highlighting a projected decrease of 2.8% year over year.

Key Factors Impacting Q1 Results

Analysts anticipate that MillerKnoll's sales may have seen a decline due to ongoing weakness within the North American housing market. This impact is evident in the performances of its Americas Contract and Global Retail segments, indicating a broader slowdown.

Additionally, the company projects its net sales will range between $872 million and $912 million, suggesting a taut year-over-year decrease. In the comparable quarter last year, the company recorded net sales of approximately $917.7 million.

On a positive note, MillerKnoll appears to be navigating these challenges effectively, showcasing improvements in both margins and operational efficiency. The company has benefitted from innovative product introductions and successful integration of company synergies following its merger with Knoll. Optimizing pricing strategies, refining freight and distribution methods, and inventory management efforts are contributing positively, with anticipated adjusted gross margins projected to be within the 39-40% range—up from the previous year’s 39%.

As for adjusted operating expenses, MillerKnoll expects these to be between $291 million and $301 million, a decrease from $302.7 million reported last year. The anticipated adjusted EPS is expected to fall between 38-44 cents, reflecting an improvement compared to the 37 cents recorded in the previous year.

Earnings Predictions and Market Sentiment

While the company has a history of strong performance, our analytical model does not suggest a decisive earnings beat for the upcoming quarter. The Earnings ESP of 0.00% combined with a Zacks Rank of #3 indicates a somewhat cautious outlook.

Competitive Perspectives

In a broader industry context, other companies have also released mixed earnings reports. For instance, Virco Manufacturing Corporation (NASDAQ: VIRC) experienced a similar trend, where earnings outperformed estimates while sales faced challenges. VIRC is focusing on expanding its business through potential acquisitions and shareholder value initiatives.

In contrast, Bassett Furniture Industries, Incorporated (NASDAQ: BSET) reported disappointing results with both earnings and sales figures missing expectations. Their strategy includes a restructuring plan aimed at realigning costs for future growth, underscoring the industry's emphasis on adaptability and efficiency.

Meanwhile, Culp, Inc. (NYSE: CULP) issued mixed results, where adjusted losses were lower than anticipated amidst a backdrop of declining sales influenced by macroeconomic factors. They are also looking to implement strategic restructuring to boost growth profitability.

As the earnings report date approaches, many investors will be closely monitoring not just MillerKnoll's performance, but also the broader trends impacting the furniture and design industry.

Frequently Asked Questions

When is MillerKnoll's Q1 earnings report scheduled?

MillerKnoll's first-quarter earnings report is expected to be released after market close.

What were the earnings expectations for MillerKnoll?

The consensus estimate for earnings per share is set at 42 cents, indicating a significant increase from last year.

How has MillerKnoll performed in previous quarters?

MillerKnoll has consistently exceeded earnings expectations over the past four quarters, averaging a surprise of 29.6%.

What external factors are affecting MillerKnoll's sales?

The ongoing challenges in the North American housing market have negatively impacted MillerKnoll's sales performance.

What trends are anticipated in MillerKnoll's financials?

Margins are expected to improve due to effective operational strategies, despite projected declines in net sales.

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