MillerKnoll, Inc. MLKN is set to release its first-quarter fiscal 2025 results on Sept. 19, 2024, after market close.

In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 26.4% and increased 63.4% year over year. Net sales missed the consensus mark by 1.1% and declined 7.1% year over year.

MillerKnoll’s earnings topped the consensus mark in each of the last four quarters, the average surprise being 29.6%.

MLKN’s Estimate Revision Trend

The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings per share has remained unchanged at 42 cents over the past 60 days. The current estimate suggests 13.5% growth from the year-ago quarter’s reported EPS value of 37 cents.

The consensus mark for net sales is $892 million, indicating a 2.8% year-over-year decrease.

Factors to Note For MLKN’s Q1

MillerKnoll’s net sales are expected to have declined year over year in the fiscal first quarter due to a notable decline in sales volume on the back of the soft North American housing market. These ongoing market challenges are particularly evident from the Americas Contract and Global Retail segments’ fiscal fourth-quarter performance.

For the fiscal first quarter, the company also expects net sales between $872 million and $912 million, reflecting a slight year-over-year decline of approximately 2.8% at the midpoint. In the year-ago quarter, the company’s net sales were $917.7 million.

Nonetheless, MillerKnoll has been navigating a challenging market backdrop with improvements in margins and operational efficiency, supported by product innovation and integration synergies from Knoll. The realization of price optimization strategies, improved freight, distribution and inventory management and benefits from its ongoing synergy efforts are likely to have driven margins. MLKN projects an adjusted gross margin within the 39-40% range for the quarter, up from 39% from the previous year.

Adjusted operating expenses are anticipated to be between $291 million and $301 million, down from $302.7 million reported a year ago. The company expects adjusted EPS in the range of 38-44 cents for the quarter, up from 37 cents reported in the year-ago quarter.

What Our Quantitative Model Predicts for MLKN’s Q1

Our proven model does not conclusively predict an earnings beat for MLKN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: MillerKnoll currently carries a Zacks Rank #3.

Peer Releases

Virco Manufacturing Corporation VIRC reported mixed second-quarter fiscal 2024 (ended July 31, 2024) results, wherein earnings surpassed the Zacks Consensus Estimate but sales missed the same.

Going forward, VIRC aims to seek potential acquisition opportunities to expand and strengthen its current business capabilities. Also, along with driving its prospects, Virco expects to add shareholder value through quarterly dividends and share repurchases.

Bassett Furniture Industries, Incorporated BSET reported tepid second-quarter fiscal 2024 (ended June 1, 2024) results, with earnings and net sales missing the Zacks Consensus Estimate and declined year over year.

BSET announced a restructuring plan to better align its cost structure for future growth. This strategy leverages Bassett’s brand quality, design expertise and service. The focus is on driving long-term revenue growth and profitability.

Culp, Inc. CULP reported mixed results in fourth-quarter fiscal 2024 (ended April 28, 2024). Its adjusted loss was narrower than the Zacks Consensus Estimate while net sales marginally missed the same. On a year-over-year basis, net sales declined and the adjusted loss widened.

The quarterly results reflect softness in industry demand for CULP’s reportable businesses due to ongoing macroeconomic headwinds and the timing of orders, due to many larger customers experiencing prolonged conditions beginning in January. Nonetheless, initiatives to lower manufacturing costs and execute operational excellence aided the bottom line to some extent. Culp intends to work on its restructuring plan as it believes this will enable it to grow more efficiently and profitably, with a lower level of fixed costs.

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