MILLERKNOLL, INC.
For the period ended Mar 1, 2025. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 1, 2025 · Filed Mar 31, 2025
MLKN$21.49-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-30; filed 2025-01-06.
0000066382-25-000007
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-01; filed 2025-03-31.
0000066382-25-000027
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 184 previous paragraphs and 233 current paragraphs.
51 unchanged; 78 reworded; 90 added; 47 removed; 8 previous and 14 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (90)
Current report
The Company has modified its reporting segments in accordance with changes in the organizational structure effective March 1, 2025, the last day of the third quarter of fiscal year 2025. The Company has aligned internal management reporting to correspond to this new structure, resulting in the following changes to reporting segments.
Current report
•The activities related to the Maharam, Spinneybeck|FilzFelt, Knoll Textiles, and Edelman brands, which were previously reported within the International Contract & Specialty segment, have been moved to the North America Contract segment.
Current report
•The activities related to the Holly Hunt brand, which were previously reported within the International Contract & Specialty segment, have been moved to the Global Retail segment.
Current report
•The activities related to Latin America Contract, which were previously reported within the Americas Contract segment, have been moved to the International Contract segment.
Current report
Following these modifications, the Company's three reportable segments are North America Contract (formerly Americas Contract), International Contract (formerly International Contract & Specialty), and Global Retail.
Current report
•Operating expenses increased by $120.4 million or 40.9% as compared to the same quarter of the prior year. The increase was driven primarily by $130.0 million of indefinite-lived intangible impairment charges in the quarter, offset in part by lower incentive compensation expense as compared to the same quarter of the prior year.
Current report
•MillerKnoll's results in the third quarter of fiscal year 2025 reflect the advantage of our diversified business model, with relative strength in certain markets and channels mitigating softness in others, along with a disciplined focus on our cost structure amidst very dynamic macroeconomic conditions.
Current report
•Impairment charges: Includes non-cash, pre-tax charges for the impairment of the Knoll and Muuto trade names as well as impairment of goodwill attributed to the Global Retail and Holly Hunt reporting units.
Current report
•Decrease of $2 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year.
Current report
•Decreased sales volume within the International Contract segment of approximately $1 million.
Current report
•Decreased sales volume within the North America Contract and Global Retail segments of approximately $30 million and $12 million, respectively.
Current report
•Decrease of $12 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year.
Current report
•Increased commodity costs negatively impacted margin by approximately 40 basis points.
Current report
•Increased commodity costs negatively impacted margin by approximately 20 basis points. These factors were offset in part by:
Current report
•Reduced freight and product distribution costs, net of freight revenue, as compared to the same period of the prior year.
Current report
•Impairment charges of$130 million related to goodwill attributed to the Holly Hunt and Global Retail reporting units as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets in the current year period.
Current report
•Increased restructuring charges related primarily to workforce reduction actions of $3 million as compared to the prior year period. Offset in part by:
Current report
•Incentive compensation which decreased approximately $12 million; and
Current report
•Decreased foreign currency translation, acquisition related integration charges, and variable selling and marketing costs as compared to the prior year period.
Current report
•Impairment charges of$130 million related to goodwill attributed to the Holly Hunt and Global Retail reporting units as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets in the current year period.
Current report
•Selling and marketing costs, which increased by approximately $4 million. These increases were offset in part by:
Current report
•Decreased restructuring charges related to workforce reduction actions taken as compared to the prior year period of approximately $5 million.
Current report
•Reduced net periodic benefit income due to the termination of the Knoll pension plan in the current year.
Current report
•Reduced interest income in the current year. These factors were offset in part by a reduction in foreign currency losses as compared to the same period of the prior year.
Current report
•Reduced net periodic benefit income due to the termination of the Knoll pension plan in the current year. These factors were offset in part by a reduction in foreign currency losses as compared to the same period of the prior year.
Current report
Effective as of March 1, 2025, the last day of the third quarter of fiscal 2025, the Company implemented an organizational change that resulted in a change in the reportable segments. The Company has recast historical results to reflect this change.
Current report
Below is a description of each reportable segment.
Current report
The North America Contract segment includes the operations associated with the design, sourcing, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout the United States and Canada as well as the global operations of the Spinneybeck|FilzFelt, Maharam, Edelman, and Knoll Textile brands.
Current report
The International Contract segment includes the operations associated with the design, sourcing, manufacture and sale of furniture products, indirectly or directly through an independent dealership network in Europe, the Middle East, Africa, Asia-Pacific and Latin America.
Current report
The Global Retail segment includes global operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, and physical retail stores, along with the global operations of the Holly Hunt brand.
Current report
North America Contract
Current report
For the three month comparative period, Net sales increased 1.4%, or 1.7%(*) on an organic basis, over the prior year period due to:
Current report
•Price increases, net of incremental discounting of approximately $20 million.
Current report
For the three month comparative period, operating earnings decreased $8.5 million, or 33.3%, over the prior year period due to:
Current report
•Decreased Gross margin of $2.0 million and a decrease in gross margin percentage of 90 basis points. The decrease in gross margin percentage was due primarily to:
Current report
◦Increased commodity costs negatively impacted margin by approximately 30 basis points; and
Current report
◦Loss of leverage of fixed costs which had a negative impact on margin of approximately 60 basis points.
Current report
•Increased Operating expenses of $6.5 million driven primarily by:
Current report
◦Increased impairment and restructuring charges in the quarter offset in part by reduced incentive compensation as compared to the prior year period.
Current report
For the nine month comparative period, operating earnings decreased $23.9 million, or 22.4%, over the prior year period due to:
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Removed paragraphs (47)
Previous report
•Operating expenses increased by $2.9 million or 0.9% as compared to the same quarter of the prior year. The increase was driven primarily by increased marketing spend, higher variable expense and higher compensation and benefit costs.
Previous report
•MillerKnoll finished the second quarter of fiscal year 2025 in line with our expectations. Although most of our market segments continue to experience broad-based macroeconomic pressures, several areas of our business are showing signs of growth and the business has maintained the gross margin improvement that occurred in fiscal year 2024.
Previous report
•Foreign currency translation increased Net sales by approximately $2 million. Offset in part by:
Previous report
•Decreased sales volume within the Global Retail segment of approximately $13 million, driven primarily by a shift in the timing of the holiday cyber promotional period, which fell across both the second and third quarters of the current year.
Previous report
•Decrease of $5 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year.
Previous report
•Decreased sales volume within the Americas Contract, Global Retail and International Contract & Specialty segments of approximately $24 million, $9 million and $4 million, respectively.
Previous report
•Decrease of $10 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year.
Previous report
•Leverage on higher sales volumes and increased production levels positively impacted margin by approximately 40 basis points.
Previous report
•Variable selling and marketing costs increased by approximately $6 million driven by increased net sales as compared to the prior year period;
Previous report
•Compensation and benefit costs, which increased approximately $4 million;
Previous report
•Foreign currency translation increased Operating expenses by approximately $2 million. Offset in part by:
Previous report
•Acquisition related integration charges contributed a decrease in Operating expenses as compared to the same period of the prior year of approximately $7 million; and
Previous report
•Restructuring charges related to reductions in the Company's workforce in the prior year of approximately $2 million that did not occur in the current year.
Previous report
•Foreign currency translation increased Operating expenses by approximately $2 million;
Previous report
•Compensation and benefit costs increased approximately $1 million. These increases were offset in part by:
Previous report
•Restructuring charges related to reductions in the Company's workforce in the prior year of approximately $7 million that did not occur in the current year.
Previous report
Americas Contract
Previous report
For the three month comparative period, Net sales increased 5.9%, or 6.2%(*) on an organic basis, over the prior year period due to:
Previous report
•Price increases, net of incremental discounting of $4 million; offset in part by
Previous report
•Price increases, net of incremental discounting of $19 million; and
Previous report
For the three month comparative period, operating earnings increased $12.4 million, or 35.3%, over the prior year period due to:
Previous report
◦The impact of incremental list price increases, net of contract price discounting which provided an approximately 50 basis point improvement over the prior year; as well as
Previous report
•Decreased Operating expenses of $1.9 million driven primarily by:
Previous report
◦Increase of $4 million related to costs associated with distribution channel and technology initiatives.
Previous report
For the six month comparative period, operating earnings decreased $11.9 million, or 15.6%, over the prior year period due to:
Previous report
•Increased Operating expenses of $2 million. The following factors contributed to the change:
Previous report
◦Decreased variable selling and marketing costs of $7 million;
Previous report
◦A decrease of approximately $4 million in compensation and benefit costs.
Previous report
International Contract & Specialty
Previous report
For the three month comparative period, Net sales increased 2.1%, or 1.1%(*) on an organic basis, over the prior year period due to:
Previous report
•Increase in sales volume of approximately $6 million, which was driven by sales growth within the APMEA and Europe regions; and
Previous report
For the six month comparative period, Net sales decreased 2.1%, or 2.5%(*) on an organic basis, over the prior year period due to:
Previous report
•Decreased sales volume of approximately $4 million, driven by lower sales volume within the textiles and Holly Hunt businesses, which more than offset volume increases in Europe and APMEA; offset in part by
Previous report
•Increased Operating expenses of $0.8 million. The following factors contributed to the change:
Previous report
◦Decreased variable compensation and benefit costs and benefits from cost synergies achieved through the acquisition of Knoll.
Previous report
For the six month comparative period, operating earnings decreased $2.1 million, or 6.0%, over the prior year period due to:
Previous report
•Increased Operating expenses of $1 million which was largely due to an increase in integration related charges in the current year of $4 million. This increase was offset in part by a decrease of $3 million in variable compensation and benefit costs and cost synergies achieved through the acquisition of Knoll.
Previous report
For the three month comparative period, Net sales decreased 5.3%, and 4.0%(*)on an organic basis, over the prior year period due to:
Previous report
For the six month comparative period, Net sales decreased 4.2%, and 2.0%(*)on an organic basis, over the prior year period due to:
Previous report
•A decrease in sales volume of approximately $9 million, driven in part by theshift in timing for how the cyber week promotional period fell within our fiscal quarters; offset in part by
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Reworded paragraphs (78)
Previous wording
The Company researches, designs, manufactures, sells, and distributes interior furnishings for use in various environments including residential, office, healthcare, and educational settings and provides related services that support organizations and individuals all over the world. The Company's products are sold primarily through independent contract office furniture dealers, direct customer sales, owned and independent retailers and the Company’s eCommerce platforms. The following is a summary of results for the three months ended November 30, 2024:
Current wording
The Company researches, designs, manufactures, sells, and distributes interior furnishings for use in various environments including residential, office, healthcare, and educational settings and provides related services that support organizations and individuals all over the world. The Company's products are sold primarily through independent contract office furniture dealers, direct customer sales, owned and independent retailers and the Company’s eCommerce platforms.
Previous wording
•Net sales were $970.4 million and orders were $921.9 million, representing an increase of 2.2% and decrease of 2.3%, respectively, when compared to the same quarter of the prior year. This increase in sales for the current quarter marked the first period of year-over-year sales growth in two years. On an organic basis, which excludes the impact of foreign currency translation and the impact of the closure of the HAY eCommerce channel in North America, Net sales were $968.1 million()and orders were $921.5 million(), representing an organic increase of 2.4%() and decrease of 1.9%(), respectively, when compared to the same quarter of the prior year.
Current wording
•Net sales were $876.2 million and orders were $853.1 million, representing an increase of 0.4% and 2.7%, respectively, when compared to the same quarter of the prior year. On an organic basis, which excludes the impact of foreign currency translation and the impact of the closure of the North American HAY eCommerce channel within the Global Retail segment, Net sales were $885.8 million()and orders were $862.2 million(), representing an organic increase of 1.8%() and 4.1%(), respectively, when compared to the same quarter of the prior year.
Previous wording
•Gross margin in the second quarter was 38.8%, a decrease of 40 basis points when compared to the same quarter of the prior year, related primarily to unfavorable channel and product mix.
Current wording
•Gross margin in the third quarter was 37.9%, a decrease of 70 basis points when compared to the same quarter of the prior year, related primarily to unfavorable channel and product mix, lower fixed cost leverage, and higher commodity costs.
Previous wording
•The effective tax rate was 21.8% compared to 21.4% for the same quarter of the prior year. The change as compared to the prior year resulted primarily by a change in the mix of earnings within various tax jurisdictions.
Current wording
•The effective tax rate was 88.3% compared to 16.0% for the same quarter of the prior year. The change as compared to the prior year resulted primarily from the impact of the estimated annual effective tax rate on the current quarter pre-tax loss driven by the impairment of indefinite-lived intangible assets during the quarter.
Previous wording
•Diluted earnings per share was $0.49 as compared to diluted earnings per share of $0.45 in the prior year. Adjusted diluted earnings per share was $0.55(), a 6.8%() decrease as compared to prior year adjusted diluted earnings per share.
Current wording
•Diluted loss per share was $0.19 as compared to diluted earnings per share of $0.30 in the prior year. Adjusted diluted earnings per share was $0.44(), a 2.2%() decrease as compared to the prior year quarter adjusted diluted earnings per share.
Previous wording
•The Americas Contract segment in the second quarter reported Net sales totaling $504.2 million, up 5.9% compared to the prior year period on a reported basis and up 6.2%() organically. Americas Contract had new orders of $456.8 million, which was an increase of 4.4% from the prior year and and increase of 4.9%() on an organic basis. This quarter marked our third consecutive period of order growth in the Americas Contract segment.
Current wording
•The North America Contract segment in the third quarter reported Net sales totaling $468.2 million, up 1.4% compared to the prior year period on a reported basis and up 1.7%() organically. North America Contract had new orders of $434.0 million, which was a decrease of 1.8% from the prior year and a decrease of 1.5%() on an organic basis.
Previous wording
•The International Contract & Specialty segment delivered Net sales in the second quarter of $246.3 million, an increase of 2.1% from the year-ago period on a reported basis and an increase of 1.1%() organically. New orders in this segment totaled $218.7 million, representing a year-over-year decrease of 6.5% on a reported basis and a decrease of 7.2%() organically.
Current wording
•The International Contract segment delivered Net sales in the third quarter of $145.5 million, a decrease of 5.0% from the year-ago period on a reported basis and a decrease of 1.5%() organically. New orders in this segment totaled $159.2 million, representing a year-over-year decrease of 1.6% on a reported basis and an increase of 1.4%() organically.
Previous wording
•Net sales in the second quarter for the Global Retail segment totaled $219.9 million, a decrease of 5.3% over the same quarter last year on a reported basis and an decrease of 4.0%() organically. Orders in the quarter totaled $246.4 million, down 9.6% compared to the same period last year on a reported basis and down 8.4%() organically. Both sales and orders were impacted by a shift in timing of the cyber week holiday promotion period, which fell into both the second and third quarters of fiscal year 2025 and fell entirely within the second quarter last fiscal year. The timing of this cyber week holiday promotion period shifted approximately $12 million in Net sales, and $27 million in orders from our fiscal second quarter into the third quarter.
Current wording
•Net sales in the third quarter for the Global Retail segment totaled $262.5 million, an increase of 1.9% over the same quarter last year on a reported basis and an increase of 3.9%() organically. Orders in the quarter totaled $259.9 million, up 14.7% compared to the same period last year on a reported basis and up 16.9%() organically. Both sales and orders were positively impacted by a shift in timing of the cyber week holiday promotion period, which fell into both the second and third quarters of fiscal year 2025 and fell entirely within the second quarter last fiscal year. Although sales and orders in the quarter benefited from the shift in the timing of this year's holiday/cyber promotional period versus the prior year, orders were up over 4% in the segment and up 14% in the North America region, even after adjusting for this timing difference.
Previous wording
The remaining sections within Item 2 include additional analysis of the three and six months ended November 30, 2024, including discussion of significant variances compared to the prior year periods.
Current wording
The remaining sections within Item 2 include additional analysis of the three and nine months ended March 1, 2025, including discussion of significant variances compared to the prior year periods.
Previous wording
Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, Knoll pension plan termination charges and the related tax effect of these adjustments. These adjustments are described further below.
Current wording
Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, impairment charges, Knoll pension plan termination charges and the related tax effect of these adjustments. These adjustments are described further below.
Previous wording
Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects and the impact of the closure of the HAY eCommerce channel in North America.
Current wording
Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects and the impact of the closure of the North America HAY eCommerce channel in the Global Retail segment.
Previous wording
The following table presents certain key highlights from the results of operations for the three and six months ended:
Current wording
The following table presents certain key highlights from the results of operations for the three and nine months ended:
Previous wording
The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive (Loss) Income as a percentage of Net sales, for the three and six months ended:
Current wording
The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive (Loss) Income as a percentage of Net sales, for the three and nine months ended:
Previous wording
The following chart presents graphically the primary drivers of the year-over-year change in Net sales for the three and six months ended November 30, 2024. The amounts presented in the graph are expressed in millions and have been rounded.
Current wording
The following chart presents graphically the primary drivers of the year-over-year change in Net sales for the three and nine months ended March 1, 2025. The amounts presented in the graph are expressed in millions and have been rounded.
Previous wording
Net sales increased $20.9 million or 2.2% in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. The following items contributed to the change:
Current wording
Net sales increased $3.9 million or 0.4% in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The following items contributed to the change:
Previous wording
•Increased sales volume within the Americas Contract and International Contract & Specialty segments of approximately $26 million and $6 million, respectively; and
Current wording
•Increased sales volume within the Global Retail and North America Contract segments of approximately $9 million and $7 million, respectively; and
Previous wording
•Price increases, net of incremental discounting, which drove an increase in Net sales of approximately $4 million; and
Current wording
•Price increases, net of incremental discounting, which drove an increase in Net sales of approximately $1 million. Offset in part by:
Previous wording
Net sales decreased $35.3 million or 1.9% in the first six months of fiscal 2025 compared to the first six months of fiscal 2024. The following items contributed to the change:
Current wording
Net sales decreased $31.4 million or 1.1% in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024. The following items contributed to the change:
Previous wording
•Foreign currency translation decreased Net sales by approximately $1 million. Offset in part by:
Current wording
•Foreign currency translation decreased Net sales by approximately $10 million. Offset in part by:
Previous wording
•Price increases, net of incremental discounting, which drove an increase in Net sales of approximately $13 million.
Current wording
•Price increases, net of incremental discounting, which drove an increase in Net sales of approximately $14 million.
Previous wording
Gross margin was 38.8% in the second quarter of fiscal 2025 as compared to 39.2% in the second quarter of fiscal 2024. The following factors summarize the major drivers of the year-over-year change in gross margin percentage:
Current wording
Gross margin was 37.9% in the third quarter of fiscal 2025 as compared to 38.6% in the third quarter of fiscal 2024. The following factors summarize the major drivers of the year-over-year change in gross margin percentage:
Previous wording
•Unfavorable channel and product mix negatively impacted margin by approximately 40 basis points. These factors were offset in part by:
Current wording
•Unfavorable channel and product mix negatively impacted margin by approximately 30 basis points.
Previous wording
•Reduced freight and product distribution costs, as compared to the same period of the prior year, which increased gross margin by approximately 40 basis points.
Current wording
•Reduced freight and product distribution costs, net of freight revenue, as compared to the same period of the prior year which increased gross margin by approximately 30 basis points.
Previous wording
Gross margin was 38.9% in the six months ended November 30, 2024, as compared to 39.1% for the same period in the prior fiscal year. The following factors summarize the major drivers of the year-over-year change in gross margin percentage:
Current wording
Gross margin was 38.6% in the nine months ended March 1, 2025, as compared to 39.0% for the same period in the prior fiscal year. The following factors summarize the major drivers of the year-over-year change in gross margin percentage:
Previous wording
•Unfavorable product mix negatively impacted margin by approximately 140 basis points. Offset in part by:
Current wording
•Unfavorable channel and product mix negatively impacted margin by approximately 20 basis points.
Previous wording
•Price increases, net of incremental discounting, contributed to margin improvement of approximately 20 basis points.
Current wording
•Price increases, net of incremental discounting, contributed to margin improvement of approximately 30 basis points.
Previous wording
The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses for the three and six months ended November 30, 2024. The amounts presented in the graphs are expressed in millions and have been rounded.
Current wording
The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses for the three and nine months ended March 1, 2025. The amounts presented in the graphs are expressed in millions and have been rounded.
Previous wording
Operating expenses increased by $2.9 million or 0.9% in the second quarter of fiscal 2025 compared to the prior year period. The following factors contributed to the change:
Current wording
Operating expenses increased by $120.4 million or 40.9% in the third quarter of fiscal 2025 compared to the prior year period. The following factors contributed to the change:
Previous wording
Operating expenses increased by $6.2 million or 1.0% in the first six months of fiscal 2025 compared to the first six months of fiscal 2024. The following factors contributed to the change:
Current wording
Operating expenses increased by $126.6 million or 13.7% in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024. The following factors contributed to the change:
Previous wording
•Acquisition related integration charges contributed an increase in Operating expenses as compared to the same period of the prior year of approximately $18 million;
Current wording
•Knoll acquisition related integration charges contributed an increase in Operating expenses as compared to the same period of the prior year of approximately $10 million.
Previous wording
•Variable selling and marketing costs, which decreased by approximately $7 million driven by variability on lower net sales and the impact of cost synergies achieved through the acquisition of Knoll; and
Current wording
•Incentive compensation which decreased by approximately $12 million.
Previous wording
During the three months ended November 30, 2024, net Other expense was $17.6 million, representing an increase of $1.5 million compared to the same period in the prior year, driven primarily by increased foreign currency losses.
Current wording
During the three months ended March 1, 2025, net Other expense was $18.6 million, representing an increase of $3.3 million compared to the same period in the prior year. The change is driven primarily by:
Previous wording
During the six months ended November 30, 2024, net Other expense was $34.5 million, representing a decrease of $0.8 million compared to the same period in the prior year. This change is driven primarily by increased interest income in the current year offset in part by increased interest expense as compared to the same period of the prior year.
Current wording
During the nine months ended March 1, 2025, net Other expense was $53.1 million, representing an increase of $2.5 million compared to the same period in the prior year. This change is driven primarily by:
Previous wording
The business is comprised of various operating segments as defined by generally accepted accounting principles in the United States. These operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions. The segments identified by the Company are Americas Contract, International Contract & Specialty, and Global Retail. Unallocated expenses are reported within the Corporate category. For descriptions of each segment, refer to Note 14 of the Condensed Consolidated Financial Statements.
Current wording
The business is comprised of various operating segments as defined by generally accepted accounting principles in the United States. These operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions.
Previous wording
The charts below present the relative mix of Net sales and Operating earnings across each of the Company's segments during the three and six month periods ended November 30, 2024. This is followed by a discussion of the Company's results, by reportable segment. The amounts presented in the charts are in millions and have been rounded.
Current wording
The charts below present the relative mix of Net sales and Operating earnings across each of the Company's segments during the three and nine month periods ended March 1, 2025. This is followed by a discussion of the Company's results, by reportable segment. The amounts presented in the charts are in millions and have been rounded.
Previous wording
•Increased sales volumes within the segment of approximately $26 million; and
Current wording
•Increased sales volumes within the segment of approximately $7 million; offset in part by
Previous wording
For the six month comparative period, Net sales decreased 0.8%, or 0.5%(*) on an organic basis, over the prior year period due to:
Current wording
For the nine month comparative period, Net sales decreased 0.8%, or 0.7%(*) on an organic basis, over the prior year period due to:
Previous wording
•Decreased volumes within the segment of approximately $24 million; and
Current wording
•Decreased volumes within the segment of approximately $30 million; and
Previous wording
•Decreased Gross margin of $10.2 million due to the decrease in sales discussed above and a decrease in gross margin percentage of 70 basis points. The decrease in gross margin percentage was due primarily to:
Current wording
•Decreased Gross margin of $17.0 million due to the decrease in sales discussed above and a decrease in gross margin percentage of 80 basis points. The decrease in gross margin percentage was due primarily to:
Previous wording
◦Loss of leverage of fixed costs due to reduced production volumes as well as unfavorable product mixwhich had a negative impact on margin of approximately 170 basis points; and
Current wording
◦Loss of leverage of fixed costs due to reduced production volumes as well as unfavorable product mixwhich had a negative impact on margin of approximately 120 basis points.
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Current report — wording carried from elsewhere
The following is a summary of results for the three months ended March 1, 2025:
Current report — wording carried from elsewhere
•Foreign currency translation decreased Net sales by approximately $10 million.
Current report — wording carried from elsewhere
•Increased sales volume within the International Contract segment of approximately $18 million.
Current report — wording carried from elsewhere
•Loss of leverage on lower sales volumes negatively impacted margin by approximately 30 basis points. These factors were offset in part by:
Current report — wording carried from elsewhere
•Increased interest expense in the current year as compared to the prior year; and
Current report — wording carried from elsewhere
Unallocated expenses are reported within the Corporate category. For descriptions of each segment, refer to Note 14 of the Condensed Consolidated Financial Statements.
Current report — wording carried from elsewhere
•Unfavorable foreign currency translation of approximately $2 million; offset in part by
Current report — wording carried from elsewhere
◦Decreased selling and marketing costs of approximately $6 million.
Current report — wording carried from elsewhere
•Decrease in sales volume of approximately $1 million.
Current report — wording carried from elsewhere
•Unfavorable foreign currency translation of approximately $5 million.
Current report — wording carried from elsewhere
•Unfavorable foreign currency translation of approximately $3 million; and
Current report — wording carried from elsewhere
•Decreased Gross margin of $9.3 million due to the decrease in net sales discussed above. Gross margin percentage was flat to the prior year. Summarized below are factors that most significantly impacted Gross margin percentage during the period:
Current report — wording carried from elsewhere
•Increased capital expenditures in the current year.
Current report — wording carried from elsewhere
Company's Annual Report on Form 10-K for the year ended June 1, 2024. There have been no material changes in such obligations since that date.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
•Price increases, net of incremental discounting, contributed to margin improvement of approximately 50 basis points.
Previous report — wording carried elsewhere
•Reduced freight and product distribution costs, as compared to the same period of the prior year which increased gross margin by approximately 10 basis points.
Previous report — wording carried elsewhere
◦Unfavorable product mix which had a negative impact on margin of approximately 100 basis points.
Previous report — wording carried elsewhere
◦Increase in acquisition related integration costs of approximately $13 million in the current period. Offset in part by:
Previous report — wording carried elsewhere
•Favorable foreign currency translation of approximately $2 million.
Previous report — wording carried elsewhere
•Decrease of approximately $5 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year; offset in part by:
Previous report — wording carried elsewhere
•Favorable foreign currency translation of approximately $1 million.
Previous report — wording carried elsewhere
•Decrease of approximately $10 million related to the closure of the HAY eCommerce channel in North America that occurred in the prior year; and