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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>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

<ul><li>MLKN posted 2QFY25 adjusted EPS of $0.55 on better-than- expected revenue (+$15 million versus our estimate), with Americas Contract and Global Retail both showing strength despite industry headwinds, while the normally ‘lumpier’ International Contract was affected by uneven demand across regions.</li><li>We reviewed the quarterly results in our summary note.</li><li>In the critical Americas Contract segment, leading indicators continue to suggest an improving demand picture.</li></ul>

MLKN posted 2QFY25 adjusted EPS of $0.55 on better-than- expected revenue (+$15 million versus our estimate), with Americas Contract and Global Retail both showing strength despite industry headwinds, while the normally ‘lumpier’ International Contract was affected by uneven demand across regions.We reviewed the quarterly results in our summary note.In the critical Americas Contract segment, leading indicators continue to suggest an improving demand picture.

MillerKnoll, Inc: Revised Revenue, EPS Estimates

<ul><li>MLKN bettered our expectations for revenue (+$15 million versus our estimate) and adjusted EPS (+$0.03 versus our estimate) even as industry conditions remained challenged.</li><li>Gross margin, down 33 bps to 38.8%, was affected by product mix, while the 81-bp decline in operating margin to 7.1% was due to higher variable and compensation expenses andthe need to ‘preload’ marketing expense in Global Retail even as the calendar split the critical holiday/cyber promotional period between 2Q and 3Q.</li><li><p>Americas Contract and Global Retail posted solid quarters amid industry headwinds, while International Contract demand (typically more variable) was down.</p></li></ul>

MLKN bettered our expectations for revenue (+$15 million versus our estimate) and adjusted EPS (+$0.03 versus our estimate) even as industry conditions remained challenged.Gross margin, down 33 bps to 38.8%, was affected by product mix, while the 81-bp decline in operating margin to 7.1% was due to higher variable and compensation expenses andthe need to ‘preload’ marketing expense in Global Retail even as the calendar split the critical holiday/cyber promotional period between 2Q and 3Q.Americas Contract and Global Retail posted solid quarters amid industry headwinds, while International Contract demand (typically more variable) was down.

<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

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: 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

MillerKnoll, Inc: Revised Revenue, EPS Estimates

Leading demand indicators, like additions to the 12-month funnel and space mock-ups, were also up strongly, continuing the trends seen in prior...

Water Tower Research

MillerKnoll, Inc - 2QFY25 Adj. EPS $0.55

MLKN bettered our expectations for revenue (+$15 million versus our estimate) and adjusted EPS (+$0.03 versus our estimate) even as industry...

Water Tower Research

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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