ZEELAND, Mich. — MillerKnoll, a global leader in office furniture manufacturing, reported a mixed first quarter for fiscal year 2025, with consolidated orders rising by 2.4% to $936 million, driven by strong performance in the Americas Contract segment. Despite the increase in orders, net sales saw a 6.1% decline to $862 million, attributed to longer order-to-shipment times.

"First quarter order growth was largely driven by the Americas Contract segment where orders gained momentum throughout the quarter," said Andi Owen, company CEO. "Importantly, customers are placing large orders and the indicators that we discussed last quarter, such as project funnel additions, customer mock-up requests and new contract activations, continue to be up year-over-year, all of which underscore an improving demand picture. 

"While this is encouraging, customers have also increased the time between their order entry a"nd requested shipment times. This has pushed revenue into subsequent quarters, and we are carefully managing operating expenses to align with sales levels."

Longer lead times have resulted in a significant backlog, which has grown by 9.2% from the previous year to $758 million. The company has maintained its full-year adjusted earnings guidance at $2.20 per share, with an optimistic outlook for the latter half of the fiscal year, expecting improved economic conditions to benefit all business segments.

"Now that interest rates have dropped slightly," Owen added, "we anticipate that customers and trade partners will start placing the orders they've paused. We've invested in marketing to capture their attention and to support the upcoming cyber and holiday season."

Key takeaways

• Orders increased by 2.4% year-over-year, reaching $936 million, with the Americas Contract segment orders growing by 5.7% to nearly $513 million.
• Net sales declined by 6.1% to $862 million due to elongated order-to-shipment times, leading to a backlog of $758 million.
• Full-year adjusted earnings guidance remains unchanged at $2.20 per share.
• Q2 net sales are projected between $950 million and $990 million, with adjusted earnings per share expected between $0.51 and $0.57.
• Expansion initiatives continue with new flagship locations and product launches, alongside recent Board additions to enhance governance.
• Retail segment operating margin improved to 2.3% from 1.1% a year ago, despite a 4.7% decline in net sales.
   

Company outlook

• Management expects improved demand in the second half of the fiscal year, supported by positive trends in global contract demand and an increased backlog.
• Optimism surrounds retail demand with anticipated improved consumer confidence following a recent interest rate cut.
  Increased order activity noted in contract business sectors like financial services and healthcare.
• Gross margins have stabilized in the 38.5% to 39.5% range over recent quarters. 

MillerKnoll ranks #2 on the FDMC 300 list of top North American wood products manufacturers.