MillerKnoll Inc. has announced its third-quarter financial results for fiscal year 2025, reporting a 0.4% year-over-year increase in consolidated net sales, reaching $876.2 million. The quarter saw strong order growth in Global Retail, particularly in North America, despite ongoing macroeconomic challenges.
Financial performance and market conditions
'Our results in the third quarter of fiscal 2025 reflect the advantage of our diversified business model, with strong performance in certain markets and channels mitigating softness in others, along with a disciplined focus on our cost structure amidst very dynamic macroeconomic conditions,' said Andi Owen, President and Chief Executive Officer of MillerKnoll.
Global Retail was a key driver of growth, with reported orders rising nearly 15% and organic orders increasing almost 17%. Adjusted for year-over-year timing differences in the Black Friday/Cyber Monday period, organic ordersrose by over 4% in the third quarter. North America's retail sector performed particularly well, with cyber-adjusted orders up 14%.
Segment performance
North America Contract recorded net sales of $468.2 million, marking a 1.4% increase. However, new orders declined by 1.8%. Operating margin stood at 3.6%, with an adjusted operating margin of 9.1%, up 80 basis points year-over-year.
International Contract net sales declined by 5.0% to $145.5 million. Orders decreased by 1.6% on a reported basis but grew by 1.4% organically. Strength was observed in the Middle East, India, Japan, Mexico, Brazil, and portions of mainland Europe.
Global Retail reported net sales of $262.5 million, an increase of 1.9%. New orders surged by 14.7% year-over-year, with organic growth at 16.9%. Adjusted operating margin improved by 80 basis points to 6.2%, driven by higher shipping revenue and increased sales leverage.
Restructuring and financial adjustments
During the third quarter, the company implemented a new organisational structure, introducing three reporting segments: North America Contract, International Contract, and Global Retail. Special charges of $140.2 million were recorded, including $4.2 million in restructuring costs related to workforce reductions and $130.0 million in non-cash impairment charges for goodwill and trade names.
MillerKnoll reported a 9.4% operating loss margin compared to an operating income margin of 4.9% in the previous year. Adjusted operating margin remained steady at 6.6%. The company posted a reported diluted loss per share of $0.19, while adjusted diluted earnings per share were $0.44, compared to $0.45 in the prior year.
Outlook for fourth quarter and full year 2025
Looking ahead, MillerKnoll expects fourth-quarter net sales between $910 million and $950 million, with a gross margin of 37.5% to 38.5%. Full-year fiscal 2025 net sales are projected between $3.618 billion and $3.658 billion. Adjusted diluted earnings per share are anticipated to range from $0.46 to $0.52 for the fourth quarter and $1.81 to $1.87 for the full year.
'Given the near-term economic uncertainty around tariffs and global supply chains, we took proactive steps to improve our near-term profitability. Our teams have done a great job balancing costs across the Company while preserving our investments in growth,' Owen stated.
More information:
MillerKnoll
www.millerknoll.com