MillerKnoll Inc

MillerKnoll reported its first quarter results on September 22, with consolidated orders climbing 3.2% to $913.9 million even as net sales fell 3.4% year over year to $923.4 million. International contract orders jumped 17.3% to $181.2 million on a large project win in South Korea, and North America retail orders rose 7.5% for an eighth straight quarter of growth, while North America contract revenue, the company's largest segment, fell 5.3% to $505.6 million and consolidated backlog slipped 3.1% to $669.2 million. Adjusted gross margin rose 330 basis points to 41.8%, operating cash flow jumped to $49.1 million from $9.4 million a year earlier, and net debt to EBITDA eased to 2.75 times from 2.8 times, with liquidity at $580.4 million. New U.S.-Canada trade friction is expected to cost $0.07 per share for the rest of the fiscal year, helping push full-year revenue guidance down to a range of $3.88 billion to $4.03 billion, and the quarter carried $13.4 million in special charges including $6.0 million tied to restructuring as the company closes its third manufacturing facility in West Michigan. The stock trades at a forward P/E of 10.09 as of September 24, with short interest at 8.12% of float and hedge fund ownership up from 19 funds to 21.

AutoZone reported fourth-quarter fiscal 2026 earnings of $56.05 per share, beating the Zacks Consensus Estimate of $54.54, sending its shares up 3.3%. THOR Industries posted fourth-quarter fiscal 2026 revenues of $2.31 billion, surpassing the Zacks Consensus Estimate of $2.15 billion, and its shares jumped 5.6%. MillerKnoll reported first-quarter fiscal 2027 revenues of $923.4 million, missing the Zacks Consensus Estimate of $942.7 million, and its shares slipped 0.2%. Vicor revised its third-quarter outlook for sequential revenue growth to more than 20% from an earlier projection of nearly 10%, driving its shares up 19.9%.

Shares of MillerKnoll, Interface, and Robert Half fell sharply after President Trump declared the Iran ceasefire over and threatened fresh strikes, sending oil prices soaring and triggering a broad risk-off move. Brent crude jumped 7.5% to $79.65, reviving inflation fears and pushing global bond yields higher, which raised the discount rate on future cash flows for business services firms. The sector, which includes staffing, consulting, and outsourcing companies, is sensitive to economic growth expectations and tends to decline when geopolitical uncertainty clouds the outlook. MillerKnoll dropped 5.3%, Interface fell 5.1%, and Robert Half lost 4.9% in the morning session.

StockStory identified Dell Technologies as a business services stock to target this week, while recommending investors avoid MillerKnoll and Cogent Communications. Dell posted 22.2% annual revenue growth over the past two years and 38.8% annual earnings per share growth, driven by share buybacks and expanding returns on capital. MillerKnoll saw just 2.9% annual revenue growth and an 11% annual decline in earnings per share due to share dilution and lack of free cash flow. Cogent experienced a 4.1% annual revenue decline, shrinking returns on capital, and depleting cash reserves that could lead to shareholder dilution.

MillerKnoll is set to announce its fiscal second-quarter earnings this Wednesday after market hours. Last quarter, the office furniture manufacturer reported revenues of $926.6 million, up 5.8% year on year, but missed analysts' revenue expectations and significantly missed EPS estimates. For the upcoming quarter, the market expects revenue growth of 1.3% year on year, a slowdown from the 8.2% increase recorded in the same quarter last year. Analysts have largely maintained their estimates over the past 30 days, and the company has missed Wall Street's revenue estimates multiple times over the last two years. MillerKnoll's stock price was unchanged over the last month, in line with the flat performance of the broader business services and supplies segment.

MillerKnoll reported first-quarter revenues of $926.6 million, up 5.8% year on year but missing analyst expectations by 1.6%, making it the weakest performer in a group of 20 tracked business services and supplies stocks. The company also significantly missed earnings per share estimates and provided the weakest guidance update of the entire group. In contrast, Brady delivered the strongest results with revenues of $435.2 million, a 13.8% increase that beat expectations by 7.2%, while CECO Environmental posted a 16.5% revenue gain to $205.9 million and raised its full-year outlook. Overall, the sector saw revenues beat consensus estimates by 2.4% and share prices rise an average of 10.6% since the latest earnings reports.

RB Global reported first-quarter revenues of $1.23 billion, an 11.4% year-on-year increase that exceeded analysts' expectations by 6.9%. The company also beat earnings per share estimates, capping what was described as a very strong quarter. Among the 20 business services and supplies stocks tracked, the group overall posted revenues 2.4% above consensus and saw average share prices rise 10.6% since their latest earnings. Brady delivered the best performance of the group with a 13.8% revenue jump and a 20.2% stock gain, while MillerKnoll was the weakest, missing revenue and EPS estimates and seeing its stock fall 14.8%.

MillerKnoll shares have fallen 10.4% over the past six months to $15.72, underperforming the S&P 500's 12.4% gain, as the company faces slowing revenue growth, declining earnings per share, and weak free cash flow margins. Annualized revenue growth over the last two years was just 1.4%, well below its five-year trend, while EPS declined 7.9% annually over five years despite revenue growing 10.4%. The company's free cash flow margin averaged 2.4% over the past five years, limiting reinvestment potential. The stock now trades at 8 times forward price-to-earnings, which appears optically cheap but carries downside risk given shaky fundamentals.