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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>MLKN’s first-quarter earnings showcased strong margins but slightly lower-than-anticipated revenues as delivery times for big projects extended and more deals were booked later in the quarter (see WTR summary note).</li><li>MillerKnoll’s 1QFY25 revenue was down 5.3% Y/Y on an organic basis and adjusted EPS of $0.36 was $0.03 below WTR’s estimate and $0.04 below consensus.</li><li>Gross margins were flat at 39%, with a 175-bp decline in Americas on lower revenues offset by improvements in both International and Global Retail.</li></ul>

MLKN’s first-quarter earnings showcased strong margins but slightly lower-than-anticipated revenues as delivery times for big projects extended and more deals were booked later in the quarter (see WTR summary note).MillerKnoll’s 1QFY25 revenue was down 5.3% Y/Y on an organic basis and adjusted EPS of $0.36 was $0.03 below WTR’s estimate and $0.04 below consensus.Gross margins were flat at 39%, with a 175-bp decline in Americas on lower revenues offset by improvements in both International and Global Retail.

MillerKnoll, Inc. Revising Revenue and EPS Estimates

<ul><li>Herein, we refresh our estimates and economic model for MillerKnoll after its release and conference call for 4QFY24, which ended May 2024.</li><li>As noted in our earlier earnings analysis note dated June 27, 2024, management delivered strong margins, enabling it to beat estimates with the report.</li><li>The margin performance benefited from cost discipline and sustained pricing benefits.</li></ul>

Herein, we refresh our estimates and economic model for MillerKnoll after its release and conference call for 4QFY24, which ended May 2024.As noted in our earlier earnings analysis note dated June 27, 2024, management delivered strong margins, enabling it to beat estimates with the report.The margin performance benefited from cost discipline and sustained pricing benefits.

MillerKnoll, Inc. - Updating FY25 and FY26 EPS and Revenue Estimates

<ul><li>EPS topped our estimate and consensus on margin strength.</li><li>MillerKnoll posted 4QFY24 EPS of $0.67 versus $0.40 in 4QFY23 on continued margin strength even as the macro environment remains challenging.</li><li>Adjusted EPS beat consensus of $0.54 and our estimate of $0.55. </li></ul>

EPS topped our estimate and consensus on margin strength.MillerKnoll posted 4QFY24 EPS of $0.67 versus $0.40 in 4QFY23 on continued margin strength even as the macro environment remains challenging.Adjusted EPS beat consensus of $0.54 and our estimate of $0.55. 

MillerKnoll, Inc. - 4QFY24 Adjusted EPS of $0.67 Tops WTR Estimate of $0.55 on Strong Margins

<div><div><div><div><ul style="list-style-type: disc;"><li><p>As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.</p></li><li><p>With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.</p></li><li><p>Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract &amp; Specialty (IC&amp;S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million. </p></li></ul></div></div></div></div>

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.With the misses, the stock gapped down by the mid-teens (~$5.00), closing at $24.76, thereby truncating and halting its recent rebound.Y/Y revenue comparisons were negative in all three segments: Americas Contract (AC) at -9% to $441 million, International Contract &amp; Specialty (IC&amp;S) at -10.4% to $217 million, and Global Retail (GR) at -17% to $214 million. 

MillerKnoll, Inc - 3QFY24 EPS Beats; Revenue Misses

<ul><li>MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44.</li><li>Consolidated sales were $872 million, missing our $908 million estimate by $36 million and likewise missing consensus by ~$37 million.</li><li>Gross margin helped the Y/Y comparison, rising 455 bps versus 3QFY23.</li></ul>

MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44.Consolidated sales were $872 million, missing our $908 million estimate by $36 million and likewise missing consensus by ~$37 million.Gross margin helped the Y/Y comparison, rising 455 bps versus 3QFY23.

United States

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior office furnishings, furniture systems, products, and services. The Company markets its products to companies, organizations, and individuals worldwide.

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MillerKnoll (MLKN US)

MillerKnoll, Inc. Revising Revenue and EPS Estimates

MillerKnoll’s 1QFY25 revenue was down 5.3% Y/Y on an organic basis and adjusted EPS of $0.36 was $0.03 below WTR’s estimate and $0.04 below consensus.

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MillerKnoll, Inc. - Updating FY25 and FY26 EPS and Revenue Estimates

Herein, we refresh our estimates and economic model for MillerKnoll after its release and conference call for 4QFY24, which ended May 2024.

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MillerKnoll, Inc. - 4QFY24 Adjusted EPS of $0.67 Tops WTR Estimate of $0.55 on Strong Margins

MillerKnoll posted 4QFY24 EPS of $0.67 versus $0.40 in 4QFY23 on continued margin strength even as the macro environment remains challenging.

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MillerKnoll, Inc - 3QFY24 EPS Beats; Revenue Misses

As noted earlier, MillerKnoll’s 3QFY24 EPS beat expectations but revenue missed widely. 4QFY24 guidance was also below pre-report estimates.

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MillerKnoll, Inc. - 3QFY24 Earnings

MillerKnoll reported 3QFY24 non-GAAP (adjusted) EPS of $0.45, beating our $0.43 estimate and consensus of $0.44. Consolidated sales were $872 million

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