MillerKnoll Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gregory Burns - Sidoti & Company - Analyst : I appreciate that the tariff question or issue is kind of still up in the air. No one knows exactly how that's going to shape up. But when you look at your business, can you maybe just give us a little bit more color on where you might have the most exposure, whether it's specific product lines or with maybe manufacturing that's coming out of Mexico? Or just any additional color you might give us on how we should think about the potential impact on the business and the business' profitability going forward?

Question: Gregory Burns - Sidoti & Company - Analyst : Okay. Great. And then in terms of maybe the slower order development you saw on the Americas or maybe more broadly, maybe it was elsewhere also. But can you just talk about that a little bit more. I think on the last call, you mentioned that kind of book to ship times were extending, maybe there's longer sales cycles. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:00PM, MLKN.OQ - Q2 2025 MillerKnoll Inc Earnings Call Is that part of maybe what you're still seeing this quarter?

Question: Gregory Burns - Sidoti & Company - Analyst : Okay. And then internationally, the orders, I guess, were down a little bit more than we were expecting. Can you just talk about the demand dynamics there? It sounds like it's different across different markets. But also, I just was wondering in terms of maybe some of the integration in terms of Knoll and the dealer network and some of the growth investments you've been making internationally. Where are you at with those? And how are those impacting the business right now?

Question: Reuben Garner - The Benchmark Company LLC - Analyst : Thank you. Good evening, everybody. Let's see. So our dealer survey the last few months has been pretty positive, especially the two readings post the election. I was wondering if you could kind of comment on any feedback you've gotten from your customers? I know you said it was softer before the election and maybe started to pick up since then, but any kind of feedback on what things are looking like as we get closer to 2025.

Question: Reuben Garner - The Benchmark Company LLC - Analyst : Okay. Great. And then Jeff, some clarifications on the guidance. I think that if I'm doing the math right, the third quarter kind of implies a little bit more of the same that we saw in the first half in terms of year-over-year, a little bit of margin -- or flattish to maybe a little bit of margin pressure at the operating incline. The fourth quarter, depending on what your revenue number assumes, it looks like it implies a pretty big surge in margins. Am I doing that right? Is there something that's going to drive that? Or is that another kind of expectation that this acceleration is going to come in the form of a big move in the top line in the fourth quarter?

Question: Reuben Garner - The Benchmark Company LLC - Analyst : And can you tell us what that top line assumption is so that if we think it's trending differently than that, we can adjust? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:00PM, MLKN.OQ - Q2 2025 MillerKnoll Inc Earnings Call

Question: Reuben Garner - The Benchmark Company LLC - Analyst : Okay. And just to clarify, you said the fourth quarter gross margin would be modestly better than what -- I think you said second quarter, but I don't think that's what you meant.

Question: Reuben Garner - The Benchmark Company LLC - Analyst : Got it. Okay. All right. I'll jump back in queue. Thank you, guys.

Question: Brian Gordon - Water Tower Research LLC - Analyst : In your discussions with customers and partners. Have there been any kind of meaningful directional trends in terms of what you're hearing in terms of like work from home or hybrid policies? And how are you thinking that could potentially affect the business over the next couple of quarters?

Question: Brian Gordon - Water Tower Research LLC - Analyst : That definitely makes sense. And I was actually going to follow up with that question. Last quarter, you guys had noted that those larger orders, the greater than $5 million category was up quite strongly. I was wondering if you could kind of give us a little bit of color on how that segment of the business has been performing over the last quarter.

Question: Brian Gordon - Water Tower Research LLC - Analyst : Great. Excellent. Thank you very much

Question: Alex Fuhrman - Craig Hallum - Analyst : It was nice to see that orders for retail were up during the really important Thanksgiving weekend and beyond period. I'm curious how we should think about that given that the retail business has been down year-over-year for a little while now. Is this potentially the beginning of turning a corner and starting to get retail back to growth? Or was this just a matter of a well-executed promotional strategy around Thanksgiving?

Question: Alex Fuhrman - Craig Hallum - Analyst : Okay, that's really helpful. Thank you very much