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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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Thematic (Sector/Industry)

<ul><li>This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture Manufacturers Association (BIFMA).</li><li>About 50+ BIFMA member companies voluntarily submit monthly sales and orders to a national accounting firm that aggregates and reports composite data.</li><li>Neither BIFMA nor any individual member has access to the raw data. We show the monthly data from 2019 to March 2023 under Industry Statistics.</li></ul>

This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture Manufacturers Association (BIFMA).About 50+ BIFMA member companies voluntarily submit monthly sales and orders to a national accounting firm that aggregates and reports composite data.Neither BIFMA nor any individual member has access to the raw data. We show the monthly data from 2019 to March 2023 under Industry Statistics.

Commercial/Contract Furniture/Consumer Hardlines : Orders Remain Lower Y/Y, but at Moderating Pace

Initiating Coverage: Two Storied Companies Combine – An In-Depth Examination of Herman Miller and Knoll, Together as MillerKnoll

Equity Bottom-Up

<ul><li>MLKN reported 1QFY26 adjusted EPS of $0.45 versus $0.36 in 1QFY25, up 25.2%, and well ahead of FactSet consensus of $0.34, which was also our forecast, and management’s expectations for $0.32-0.38.</li><li>The adverse net tariff impact on EPS was ~$0.08, slightly better than the $0.09- 0.11 expected, which was offset by a $0.01-0.02 adverse impact on EPS from a higher-than-expected tax rate.</li><li>Sales in the quarter increased 10.9% to $955.7MM, better than consensus of 5.7% and our estimate for 5.2% growth. </li></ul>

MLKN reported 1QFY26 adjusted EPS of $0.45 versus $0.36 in 1QFY25, up 25.2%, and well ahead of FactSet consensus of $0.34, which was also our forecast, and management’s expectations for $0.32-0.38.The adverse net tariff impact on EPS was ~$0.08, slightly better than the $0.09- 0.11 expected, which was offset by a $0.01-0.02 adverse impact on EPS from a higher-than-expected tax rate.Sales in the quarter increased 10.9% to $955.7MM, better than consensus of 5.7% and our estimate for 5.2% growth. 

MillerKnoll, Inc: 1QFY26 Beats Handily; Raising Estimates

<ul><li>Strong sales growth in 4QFY25, especially in North American Contract, driven in part by demand pull forward.</li><li>MLKN delivered adjusted EPS of $0.60, significantly better than our estimate.</li><li>North American Contract saw organic sales growth of 12.6%, which led to a 195-bp improvement in operating margins on better sales leverage. </li></ul>

Strong sales growth in 4QFY25, especially in North American Contract, driven in part by demand pull forward.MLKN delivered adjusted EPS of $0.60, significantly better than our estimate.North American Contract saw organic sales growth of 12.6%, which led to a 195-bp improvement in operating margins on better sales leverage. 

MillerKnoll, Inc: 4Q25 Adj. EPS of $0.60 Beats WTR Estimate

<ul>
<li>MLKN posted 3QFY25 adjusted EPS of $0.44, $0.01 below our estimate and 3QFY24 on weaker-than-expected revenue offset by better margins.</li>
<li>Total revenue came in $43 million lower than expected, with growth in Global Retail of 3.9% partially offsetting a decline in International Contract of 1.5% and modest growth in North America Contract of 1.7% on an organic basis.</li>
<li>Given how leading indicators in North America Contract had been trending positive over the past several quarters, we expected stronger revenue growth in 3QFY25.</li>
</ul>


MLKN posted 3QFY25 adjusted EPS of $0.44, $0.01 below our estimate and 3QFY24 on weaker-than-expected revenue offset by better margins.
Total revenue came in $43 million lower than expected, with growth in Global Retail of 3.9% partially offsetting a decline in International Contract of 1.5% and modest growth in North America Contract of 1.7% on an organic basis.
Given how leading indicators in North America Contract had been trending positive over the past several quarters, we expected stronger revenue growth in 3QFY25.


MillerKnoll, Inc. - 3Q25 Adj. EPS $0.44 on Lower-Than- Expected Revenue & Better Margins

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)

Commercial/Contract Furniture/Consumer Hardlines : Orders Remain Lower Y/Y, but at Moderating Pace

This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture...

Water Tower Research

Initiating Coverage: Two Storied Companies Combine – An In-Depth Examination of Herman Miller and Knoll, Together as MillerKnoll

KEY POINTS Herein, we introduce coverage of MillerKnoll, Inc. (MLKN), the resulting corporate entity (and stock ticker) after Herman Miller...

Water Tower Research

MillerKnoll, Inc: 1QFY26 Beats Handily; Raising Estimates

MLKN reported 1QFY26 adjusted EPS of $0.45 versus $0.36 in 1QFY25, up 25.2%, and well ahead of FactSet consensus of $0.34, which was also our...

Water Tower Research

MillerKnoll, Inc: 4Q25 Adj. EPS of $0.60 Beats WTR Estimate

Strong sales growth in 4QFY25, especially in North American Contract, driven in part by demand pull forward. MLKN delivered adjusted EPS of $0.60,...

Water Tower Research

MillerKnoll, Inc. - 3Q25 Adj. EPS $0.44 on Lower-Than- Expected Revenue & Better Margins

MLKN posted 3QFY25 adjusted EPS of $0.44, $0.01 below our estimate and 3QFY24 on weaker-than-expected revenue offset by better margins.

Water Tower Research

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