MillerKnoll, Inc.

Good evening, and welcome to Miller Knowles 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 Andy 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 Probst, President of Global Retail. We issued our earnings press release for the quarter ended February 28, 2026, after market closed today, and it is available on our investor relations website at millernull.com. A replay of this call will be available on our website within 24 hours. Before I turn the call over to Andy, 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 that, I'll turn the call over to Andy. Thanks, Wendy.

Good evening, everyone, and thank you for joining us. I want to begin our call by expressing my appreciation to our 10,000 associates across the globe for their hard work in delivering our third quarter results. Our team's dedication and focus on our strategy to drive long-term value delivered another solid quarter with continued sales and order growth and discipline execution. Despite ongoing macroeconomic and geopolitical uncertainty, as well as the impact of severe weather during the quarter, we were able to deliver quarterly results within our expectations, and we continue to be optimistic about the impact that our strategic initiatives can deliver. Before I move to segment-specific highlights from the quarter, I want to congratulate the operations team on the 30th anniversary of MKPS, our Miller-Knoll performance system used across our manufacturing footprint. We have successfully worked with Toyota for 30 years and remain a model for efficient and reliable production. MKPS is a significant competitive advantage for Miller-Knoll and enables us to produce all of our products efficiently and at the highest quality. So let's move to the current macro environment. From a tariff perspective, we don't expect the most recent developments to result in any meaningful changes to our approach, and we expect to continue to fully offset tariff costs for the remainder of this fiscal year, as we did in the third quarter. Recognizing that things can develop quickly, however, we are very experienced in navigating tariff changes and continue to monitor both policy and rates closely. With respect to the Middle East, this region remains an important long-term growth opportunity for our international contract business. In the near term, the current conflict is creating disruption, and we do expect some impact to fourth quarter sales and costs. Kevin will provide additional detail on this later in the call. Moving to some highlights and trends in our segments. In North America contract, the power of this business as a cash generation engine was on display this quarter with gross margins and operating income strength building as sales continued to grow year over year. Industry benchmarks continue to show improving trends in Class A leasing, net lease absorption, and return to office. When looking at dynamics by industry sector, we saw order growth in most sectors and are pleased with the resiliency of demand as our customers continue to invest in their spaces and earn commute. With Design Day as our largest industry trade show coming up in early June, we are looking forward to showcasing launches for the workspace and healthcare from Herman Miller, Noel, Geiger, Not One, Hay, Muto, and Meharam. Our marketing, product, insights, and North America contract teams are in full preparation mode, and we are looking forward to welcoming our customers and our dealers to Fulton Market. In international contract, we're advantaged with the most desired product portfolio and continue to be bullish about our ongoing opportunities in faster-growing, under-penetrated markets, as well as expanding our dealer share of wallet across these markets while generating enviable margins. As we've discussed in previous calls, another strength of our international business is our diverse regional footprint and localized production, where strong performance in certain regions can mitigate softness in others. With these varied regional dynamics, we can sometimes see quarter-over-quarter choppiness, and our team is both deliberate and nimble on where and how to target growth. In particular this quarter, we saw sales strength in India, China, Japan, Southern Europe, Germany, and the UK. In global retail, we continue to grow and take market share in the approximately $150 billion global premium home furnishings market. In the third quarter, segment comparable sales increased 5.5%, and in the North America region, we had comparable sales growth of 3.9%. Our comp sales include both sales through e-commerce, as well as stores that have been open for 13 months. While adverse weather conditions across North America during the quarter resulted in lower traffic than normal, as well as store closures, we were pleased to deliver comparable sales growth despite these headwinds. We continue to expand our store footprint in the third quarter, opening new DWI locations in Fort Worth, Texas and Pittsburgh, Pennsylvania, and a Herman Miller store in Phoenix, Arizona. We plan to open three to four more locations before the end of fiscal 2026, ending the year with 14 to 15 new stores in the U.S., executing on our strategy to approximately double our DWR from a Miller Store footprint over the next several years. As a reminder, our North American retail growth is being driven by four strategic levers, new store openings, expanded product assortment, e-commerce acceleration, and increased brand awareness. During the quarter, we executed several high-impact brand campaigns designed to attract new customers and drive store traffic across our Design Within Reach and Herman Miller banners. We launched our very first Herman Miller Seating Campaign with engaging video and targeted marketing in key regions around the world. During Modernism Week in Palm Springs, where our recently opened DWR store continues to perform well, we held an exhibition of modern seating from the Millernal Archives in partnership with the Palm Springs Art Museum. connecting us more deeply with the Palm Springs community and reinforcing our leadership in modern design. And just in the past few weeks, DWR unveiled a collaboration with Tracy Ellis Ross. Our designers worked directly with Tracy to transform her patterned beauty offices. The collaboration was covered in Vanity Fair, Forbes, Essence, and How It's Beautiful, and has generated more than 200 million media impressions. In summary, I'm proud of our solid performance in the third quarter and continue to be optimistic about both our contract and retail businesses. Regardless of the macroeconomic and geopolitical landscapes, our team will continue to execute on our targeted initiatives, new product launches, and growing retail footprint. As Kevin will discuss, we made meaningful progress strengthening our balance sheet during the quarter, and we remain well positioned for profitable growth. We are focused on creating long-term value across our powerful collective of brands through our balanced strategy of sustained revenue growth, margin expansion, cash generation, and shareholder returns. Finally, I want to welcome Claire Spofford to our Board of Directors. Claire most recently served as President and Chief Executive Officer of JGL, and she brings a powerful combination of consumer insight, retail strategy, and governance experience that will enhance our board as we continue to grow our global collective of brands and drive long-term value creation. With that, Kevin will discuss our financial results in more detail and share our outlook for the fiscal fourth quarter.