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The call showed multiple clear strengths — solid top-line growth, strong order momentum, gross margin expansion, healthy cash generation, debt reduction, and continued retail expansion — alongside notable near-term headwinds: weather-driven retail softness, margin pressure in Retail and International, and an explicit short-term impact from the Middle East conflict (including ~$12M of unshipped orders and an $8–9M quarterly profit drag). Management emphasized disciplined execution, scenario planning, and the capacity to offset some tariff/transport impacts, and provided guidance that incorporates current geopolitical risks.
For fiscal Q4 the company guided net sales of $955 million to $995 million (midpoint $975M, +1.4% y/y at midpoint), gross margin of 37.5%–38.5%, adjusted operating expense of $311.5 million to $321.5 million, and adjusted diluted EPS of $0.49–$0.55. Management said it expects to ship only a minimal amount—roughly $12 million—of Middle East‑related orders in the quarter and anticipates higher logistics costs from elevated oil prices; they estimate the direct impact of the Middle East conflict at $8–$9 million (about $0.09–$0.10 per share). The outlook also assumes approximately $3.5–$4.5 million of incremental year‑over‑year operating expense for new stores and global initiatives and reflects headwinds from increased compensation, variable selling expense and foreign exchange.
Consolidated net sales of $927 million, up 5.8% year-over-year (3.8% organic). Consolidated orders of $932 million, up 9.2% year-over-year (7.2% organic). Consolidated backlog of $712 million, up 3.7% year-over-year.
Third-quarter consolidated gross margin increased 20 basis points to 38.1%, driven primarily by strength in North America Contract.
NAC net sales $489 million, up 4.4% reported (4.1% organic). Orders $491 million, up 13.1% reported (12.8% organic). Operating margin 8.6%; adjusted operating margin 9.8%, up 70 basis points year-over-year driven by gross margin expansion and operating efficiency.
Global Retail net sales $281 million, up 7.1% reported (4.4% organic). Segment comparable sales increased 5.5%; North America comparable sales up 3.9%. Orders $280 million, up 7.9% reported (5.1% organic). Expanded store footprint with three new stores in Q3 and plan for 14–15 new US stores in fiscal year.
International Contract saw sales strength in India, China, Japan, Southern Europe, Germany, and the UK, supporting margins and growth in underpenetrated markets despite regional choppiness.
Generated $61 million in cash flow from operations in the quarter, reduced debt by $41 million, lowering net debt to EBITDA to 2.75x (progress toward 2.0–2.5x target). Finished the quarter with $594 million in liquidity.
Board declared quarterly cash dividend of $0.1875 per share (annual indicated $0.75 per share), representing a 3.9% yield based on the recent closing price; maintained focus on balancing growth investments with debt reduction and dividends.
Celebrated 30th anniversary of MKPS (MillerKnoll Performance System) in manufacturing, a key competitive advantage enabling efficient, high-quality production across the footprint.
Good evening, and welcome to MillerKnoll, Inc. Quarterly Earnings Conference Call. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Wendy Watson, Vice President of Investor Relations. Please go ahead. Good evening.
And welcome to our third quarter fiscal 2026 conference call. On with me are Andi Owen, Chief Executive Officer, and Kevin Veltman, Chief Financial Officer. Joining them for the Q&A session are John Michael, President of North America Contract, and Debbie Propst, President of Global Retail. We issued our earnings press release for the quarter ended February 28, 2026 after market close today, and it is available on our Investor Relations website at investors.millerknoll.com. A replay of this call will be available on our website within 24 hours. Before I turn the call over to Andi, please remember our safe harbor disclosure regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors which are detailed in today's press release.
The forward-looking statements are made as of today's date and, except as may be required by law, we assume no obligation to update or supplement these statements. We also refer to certain non-GAAP financial metrics and our press release includes the relevant non-GAAP reconciliations. With tha...