MLKN 10-K & 10-Q changes, risk factors and insider trading
Millerknoll, Inc. · Nasdaq · Office Furniture · CIK 66382 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our executive leadership transition may adversely affect our ability to execute our strategy and maintain business momentum.”
New heading “Artificial intelligence and agentic commerce could transform our industry and business model, and our failure to adopt, integrate, and optimize these capabilities could adversely affect our competitive position.”
New heading “We expect changes to U.S. trade policy, including new or increased tariffs, changing import/export regulations, and uncertainty regarding potential tariff refunds, to continue to affect our operating results.”
New heading “Global geopolitical instability could indirectly affect our supply chain, costs, and results of operations.”
New heading “Our indebtedness and related covenants could adversely affect our financial flexibility and ability to operate our business.”
New heading “We are subject to risks associated with self-insurance related to certain liabilities and employee benefits.”
New heading “We are subject to cybersecurity and data security risks that could compromise our systems, data, operations, and reputation.”
Removed heading “In connection with the July 2021 acquisition of Knoll, we incurred significant additional indebtedness, which has increased our interest expense and could adversely affect us, including by decreasing our business flexibility.”
Removed heading “Changes in spending or budgetary policies of the U.S. Federal Government may materially adversely affect our business.”
Removed heading “We expect changes to U.S. trade policy, including new or increased tariffs and changing import/export regulations, to continue to adversely affect our operating results, and the impacts have been material. Although we have implemented a range of cost mitigation actions, there is risk that these actions will not be sufficient to fully mitigate increased costs or that regulations could further increase costs in the future.”
Removed heading “We are subject to risks associated with self-insurance related to health benefits.”
Removed heading “We are subject to risks and costs associated with protecting the integrity and security of our systems and confidential information.”
Largest changes
“Our systems maintain personally identifiable information, including employee data, customer and payment-related information, and other confidential business information. We cannot guarantee that our security measures, monitoring, incident response processes, vendor risk management program, or other controls will prevent or timely detect all unauthorized access, misuse, or disclosure of such information. …”see in full comparison
“Current and potential future geopolitical tensions, including the ongoing conflicts between Russia and Ukraine and the conflicts in the Middle East, have had and could continue to have a broader impact on the global markets in which we do business. An increase in these tensions could adversely affect our business and/or our supply chain, business partners or customers. Continued global conflicts are likely to further increase the cost of various supplies, particularly for petroleum based products. …”see in full comparison
“We expect changes to U.S. trade policy, including new or increased tariffs and changing import/export regulations, to continue to adversely affect our operating results, and the impacts have been material. Although we have implemented a range of cost mitigation actions, there is risk that these actions will not be sufficient to fully mitigate increased costs or that regulations could further increase costs in the future.”see in full comparison
“Current and potential future geopolitical conflicts, including in the Middle East and involving Russia and Ukraine, as well as broader political instability and governmental responses to these events, may affect the global markets in which we do business. …”see in full comparison
“We expect changes to U.S. trade policy, including new or increased tariffs, changing import/export regulations, and uncertainty regarding potential tariff refunds, to continue to affect our operating results.”see in full comparison
“Any person who circumvents our security measures could destroy or steal valuable information or disrupt our operations. Any security breach could cause consumers to lose confidence in the security of our information systems, including our eCommerce websites or retail studios and choose not to purchase from us. Any security breach could also expose us to risks of data loss, litigation, regulatory investigations, and other significant liabilities. …”see in full comparison
Full comparison: every changed paragraph (47)
Our executive leadership transition may adversely affect our ability to execute our strategy and maintain business momentum.
In June 2026, we announced the departure of our President and Chief Executive Officer and the appointment of our Chief Operating Officer as Interim Chief Executive Officer while the Board conducts a search for a permanent successor. Executive leadership transitions and searches can create uncertainty among employees, customers, dealers, suppliers, investors, and other stakeholders, and may disrupt management focus or delay decision-making. If we are unable to complete an effective transition, retain and motivate key leaders and employees, or maintain continuity in the execution of our strategic priorities, our business, results of operations, and financial condition could be adversely affected.
Approximately 36% of the sales within our Global Retail segment are transacted within our retail stores. Additionally, we believe our retail stores have a direct influence on the volume of business transacted through other channels, including our consumer eCommerce and direct-mail catalog platforms, as many customers utilize these physical spaces to view and experience products prior to placing an order online or through the catalog call center. Our ability to open additional stores or close existing stores successfully will depend upon a number of factors beyond our control, including, without limitation:
In connection with the July 2021 acquisition of Knoll, we incurred significant additional indebtedness, which has increased our interest expense and could adversely affect us, including by decreasing our business flexibility.
The consolidated long-term debt of MillerKnoll as of May 31, 2025, was $1.31 billion. As a result of our acquisition of Knoll in July 2021, we substantially increased our indebtedness, which has increased our interest expense and could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions. We have also incurred various costs and expenses associated with such indebtedness. The amount of cash required to pay interest on our increased indebtedness levels and thus the demands on our cash resources are greater than the amount of cash flows previously required to service our indebtedness. The increased levels of indebtedness will also reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes and may create competitive disadvantages for MillerKnoll relative to other companies with lower debt levels.
The indebtedness incurred in connection with the acquisition of Knoll contains various covenants that impose restrictions on us that may affect our ability to operate our business. These include both affirmative and negative covenants that, subject to certain significant exceptions, restrict the ability of us and certain of our subsidiaries to, among other things, incur liens on our property, incur additional indebtedness, enter into sale and lease-back transactions, make loans, advances, or other investments, make non-ordinary course asset sales, declare or pay dividends, engage in share repurchases or make other distributions with respect to equity interests, and/or merge or consolidate with any other person or sell or convey certain assets to any one person. In addition, the definitive documentation governing such indebtedness contains a financial maintenance covenant that requires us to maintain a certain leverage ratio at the end of each fiscal quarter. Our ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations under such indebtedness.
In addition, we may be required to raise substantial additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate requirements. Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. There is no assurance we will be able to obtain such additional financing on terms acceptable to us or at all.
Artificial intelligence and agentic commerce could transform our industry and business model, and our failure to adopt, integrate, and optimize these capabilities could adversely affect our competitive position.
The increasing use of artificial intelligence, including generative AI and autonomous or agentic commerce tools, may materially change how customers identify, evaluate, specify, purchase, and manage furniture and workplace solutions. These technologies could alter customer expectations, affect the role of dealers, designers, and digital channels, and change competitive dynamics in our industry. If competitors, customers, dealers, suppliers, or other market participants adopt AI-enabled tools more quickly or effectively than we do, or if AI-enabled platforms disintermediate existing sales channels or influence purchasing decisions in ways that do not favor our brands, product portfolio, or pricing, our sales, margins, and customer relationships could be adversely affected.
We are investing in technology and digital capabilities, and we may increase our use of AI tools in areas such as customer experience, product specification, operations, supply chain, marketing, data analytics, and other business processes. These initiatives may require significant investment and may not produce the expected benefits. Our use of AI may also increase risks related to inaccurate or biased outputs, insufficient governance, data privacy, cybersecurity, intellectual property, confidentiality, regulatory compliance, employee misuse, third-party tool availability, and reputational harm. If we do not responsibly and effectively adopt, integrate, and optimize AI capabilities, or if our governance and controls do not keep pace with evolving technology, customer expectations, or legal requirements, our business, results of operations, and reputation could be adversely affected.
Current and potential future geopolitical tensions, including the ongoing conflicts between Russia and Ukraine and the conflicts in the Middle East, have had and could continue to have a broader impact on the global markets in which we do business. An increase in these tensions could adversely affect our business and/or our supply chain, business partners or customers. Continued global conflicts are likely to further increase the cost of various supplies, particularly for petroleum based products. The impact from these conflicts, as well as any actual or potential associated international sanctions, cannot be predicted or anticipated with any reasonable degree of certainty, including the impact on the Company.
A sustained downturn in the economy has and could adversely impact our access to capital.
ThePrevious disruptions in the global economic and financial markets during 2007 to 2009have adversely impacted the broader financial and credit markets, at times reducing the availability of debt and equity capital for the market as a whole. Conditions such as these could re-emerge in the future. Accordingly, our ability to access the capital markets could be restricted at a time when we would like, or need, to access those markets, which could have an adverse impact on our flexibility to react to changing economic and business conditions. The resulting lack of available credit, increased volatility in the financial markets and reduced business activity could materially and adversely affect our business, financial condition, results of operations, our ability to take advantage of market opportunities and our ability to obtain and manage our liquidity. In addition, the cost of debt financing and the proceeds of equity financing may be materially and adversely impacted by these market conditions. The extent of any impact would depend on several factors, including our operating cash flows, the duration of tight credit conditions and volatile equity markets, our credit capacity, the cost of financing, and other general economic and business conditions. Our credit agreements contain performance covenants, such as a limit on the ratio of debt to earnings before interest, taxes, depreciation and amortization, and limits on subsidiary debt and incurrence of liens. Although we believe none of these covenants is currently restrictive to our operations, our ability to meet the financial covenants can be affected by events beyond our control.
Changes in spending or budgetary policies of the U.S. Federal Government may materially adversely affect our business.
Sales to the U.S. federal government represented approximately 4% of total Company net sales in fiscal year 2025. On January 20, 2025, President Trump signed an executive order creating an advisory commission, the “Department of Government Efficiency,” to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities and spending levels, have adversely affected and could continue to affect staffing levels and funding for government agencies that purchase our products.
We expect changes to U.S. trade policy, including new or increased tariffs, changing import/export regulations, and uncertainty regarding potential tariff refunds, to continue to affect our operating results.
We expect changes to U.S. trade policy, including new or increased tariffs and changing import/export regulations, to continue to adversely affect our operating results, and the impacts have been material. Although we have implemented a range of cost mitigation actions, there is risk that these actions will not be sufficient to fully mitigate increased costs or that regulations could further increase costs in the future.
Changes in U.S. or international social, political, regulatoryregulatory, or economic conditionsconditions, or inincluding laws and policies governing foreign trade, tariffs, customs, and import/export regulations, and any potential negative sentiment toward the U.S. as a result of such changes, have,have affected and could continue to materially and adversely affect our business. The U.S. has instituted certain changes,instituted, and hasmay proposedcontinue additionalto changes,institute inor modify, trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S. and other countries (such as Canada, Mexico, China, and the European Union) where we conduct our business. Global trade disruption, significant introductions of trade barriers andbarriers, bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, have, and couldrelated furtheruncertainty may materially and adversely affect our supply chain, customer demand, financial performance.performance, and results of operations.
Tariffs and tariff-related uncertainty have affected, and may continue to affect, the cost and availability of steel, plastic, aluminum components, particleboard, and other raw materials, components, and finished goods that we use or source. Tariff-related costs, net of pricing actions taken to help offset costs, adversely impacted gross margin during the first half of fiscal 2026. Although we have implemented mitigation actions, including pricing actions and tariff surcharges, these actions may not fully offset increased costs, may reduce customer demand, may be delayed by contractual limitations or competitive pressures, and may not protect us from additional or retaliatory trade measures.
During fiscal 2026, court rulings created the potential for importers to seek refunds of certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA), and we have submitted, and/or intend to submit, claims for refunds on substantially all IEEPA tariffs paid that may be eligible for recovery. However, uncertainty remains regarding the ultimate resolution of the related legal proceedings, including the U.S. government’s appeal, and the amount and timing of any refunds that may be realized remain uncertain. Even if we ultimately recognize refunds, the tariff environment may remain volatile, and new, modified, or retaliatory tariffs or other trade measures could continue to adversely affect our business, financial condition, and results of operations.
Global geopolitical instability could indirectly affect our supply chain, costs, and results of operations.
Current and potential future geopolitical conflicts, including in the Middle East and involving Russia and Ukraine, as well as broader political instability and governmental responses to these events, may affect the global markets in which we do business. Although our direct sales exposure in currently affected regions may not be material, these events can indirectly affect our operations and financial results through disruption to global supply chains, volatility in energy prices, increased freight and logistics costs, constraints on petroleum-based products and other raw materials, inflationary pressure, changes in customer demand, foreign currency volatility, and increased cybersecurity threats.
The duration, severity, and ultimate impact of geopolitical instability cannot be predicted with any reasonable degree of certainty. If these conditions persist, broaden, or intensify, they could adversely affect our supply chain, cost structure, ability to produce and distribute products, business strategies, financial condition, results of operations, and cash flows.
The tariffs on imports, most notably imports from China, have impacted the cost of steel, a key commodity that we consume in producing products. Given the significance of steel costs to our direct materials costs, we closely monitor trade tensions between the U.S. and China. The potential impact to our direct material costs due to tariffs on Chinese imports is somewhat limited, however, as purchases of direct materials (mainly component parts and products manufactured by third parties) from China represented an estimated 3% of our consolidated cost of sales for fiscal 2025.
As a result of policy changes and government proposals, there may be greater restrictions and economic disincentives on international trade. The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing trade sanctions on U.S. goods. Such changes both have had and have the potential to continue to adversely impact the U.S. economy, our industry and the global demand for our products, and as a result, have had a negative impact on our business, financial condition and results of operations. We have taken actions to mitigate these cost increases, including price increases and tariff surcharges. There is risk that these actions will not sufficiently offset the cost of tariffs and other trade policy actions.
Our indebtedness and related covenants could adversely affect our financial flexibility and ability to operate our business.
The consolidated long-term debt of MillerKnoll as of May 30, 2026, was $1.26 billion. Our level of indebtedness increases demands on cash resources, may reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes, and may reduce our flexibility to respond to changing business and economic conditions. The agreements governing our indebtedness also contain covenants that, subject to exceptions, restrict our ability and the ability of certain subsidiaries to take specified actions, including incurring liens or additional indebtedness, entering into sale and lease-back transactions, making certain investments or asset sales, declaring or paying dividends, engaging in share repurchases or other equity distributions, merging or consolidating, or selling or conveying certain assets. If we fail to comply with these covenants, and any default is not cured or waived, our repayment obligations could be accelerated. We may also need additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate requirements, and there can be no assurance that such financing will be available on acceptable terms or at all.
We are subject to risks associated with self-insurance related to health benefits.
We are self-insured for our health benefits and maintain per employee stop loss coverage; however, we retain the insurable risk at an aggregate level. Therefore unforeseen or catastrophic losses in excess of our insured limits could have a material adverse effect on the Company’s financial condition and operating results. See Note 1 of the Consolidated Financial Statements for information regarding the Company’s retention level.
Although no impairment was recognized in fiscal 2026, the current-year quantitative goodwill impairment assessment indicated limited cushion for certain reporting units, including International Contract, Global Retail, and Coverings, whose fair values exceeded carrying values by 3.1%, 1.1%, and 8.5%, respectively. Certain indefinite-lived trade name assets also had limited cushion, including the Knoll and Muuto trade name assets, whose fair values exceeded carrying values by 6.8% and 2.1%, respectively. As a result, relatively modest adverse changes in projected revenue growth, operating margins, royalty rates, discount rates, or other valuation assumptions could result in material impairment charges.
We are subject to risks associated with self-insurance related to certain liabilities and employee benefits.
We are partially self-insured for general liability, workers’ compensation, and certain employee health and dental benefits under insurance arrangements that provide for third-party coverage of claims exceeding our loss retention levels, and our health benefit and auto liability retention levels do not include an aggregate stop loss policy. Unforeseen or catastrophic losses, changes in medical costs, legal actions, payment lag times or actual claims experience could cause our self-insurance estimates to change and could have a material adverse effect on our financial condition and operating results.
We are subject to risks and costs associated with protecting the integrity and security of our systems and confidential information.
We collect certain customer-specific data, including credit card information, in connection with orders placed through our eCommerce websites, direct-mail catalog marketing program, and retail studios. For these sales channels to function and develop successfully, we and other parties involved in processing customer transactions must be able to transmit confidential information, including credit card information and other personal information regarding our customers, securely over public and private networks. Third parties may have or develop the technology or knowledge to breach, disable, disrupt or interfere with our systems or processes or those of our vendors. While we believe we take reasonable steps to protect the security and confidentiality of the information we collect, we cannot guarantee that our security measures will effectively prevent others from obtaining unauthorized access to our information and our customers’ information. The techniques used to obtain unauthorized access to systems change frequently and are not often recognized until after they have been launched.
Any person who circumvents our security measures could destroy or steal valuable information or disrupt our operations. Any security breach could cause consumers to lose confidence in the security of our information systems, including our eCommerce websites or retail studios and choose not to purchase from us. Any security breach could also expose us to risks of data loss, litigation, regulatory investigations, and other significant liabilities. Such a breach could also seriously disrupt, slow or hinder our operations and harm our reputation and customer relationships, any of which could damage our business.
A security breach includes a third party wrongfully gaining unauthorized access to our systems for the purpose of misappropriating assets or sensitive information, loading corrupting data, or causing operational disruption. These actions may lead to a significant disruption of the Company’s IT systems and/or cause the loss of business and business information resulting in an adverse business impact, including: (1) an adverse impact on future financial results due to theft, destruction, loss misappropriation, or release of confidential data or intellectual property; (2) operational or business delays resulting from the disruption of IT systems, and subsequent clean-up and mitigation activities; and (3) negative publicity resulting in reputation or brand damage with customers, partners or industry peers.
The United States federal and state governments are increasingly enacting laws and regulations to protect consumers against identity theft. Also, as our business expands globally, we are subject to data privacy and other similar laws in various foreign jurisdictions. If we are the target of a cybersecurity attack resulting in unauthorized disclosure of our customer data, we may be required to undertake costly notification procedures. Compliance with these laws will likely increase the costs of doing business. If we fail to implement appropriate safeguards or to detect and provide prompt notice of unauthorized access as required by some of these laws, we could be subject to potential fines, claims for damages and other remedies, which could harm our business.
Due to the political uncertainty and military actions involving Russia, Ukraine, and surrounding regions, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware, or other cyber-attacks, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products.
We are subject to risks and potential costs associated with disruption to our technology systems as well asand our ability to adequately maintain and update those systems to support growth initiatives and increasing business complexity.
Our business is increasingly dependent on complex information technology systems, including our ERP systems, order entry, manufacturing scheduling, production, eCommerce, financial reporting, human resources, supplier connectivity, and other systems that support our operations and growth initiatives. These systems may be disrupted by system failures, implementation difficulties, integration issues, power or telecommunications outages, natural disasters, human error, third-party service provider failures, cybersecurity events, or other causes. If we experience difficulties maintaining or operating existing systems or implementing new systems, or if we are unable to successfully modernize legacy systems in a coordinated manner across internal and external stakeholders, we could experience business interruption, operational delays, manufacturing or distribution disruption, financial reporting or internal control issues, increased costs, reputational harm, and other adverse impacts.
We also rely on information technology systems and processes to collect, process, store, and transmit business, supplier, customer, employee, and other data. If our systems, processes, or controls are not adequate to protect or appropriately manage such data, including data received from or relating to suppliers and other third parties, we could be subject to operational disruption, contractual claims, regulatory inquiries, litigation, remediation costs, reputational harm, or loss of confidence by customers, suppliers, dealers, employees, and other stakeholders.
We are subject to cybersecurity and data security risks that could compromise our systems, data, operations, and reputation.
We, our vendors, and other third parties on which we rely are subject to evolving and increasingly sophisticated cybersecurity threats, including threats from criminal hackers, ransomware operators, phishing and social engineering schemes, insiders, hacktivists, and nation-state or state-sponsored actors, including actors associated with areas of geopolitical instability such as Iran. These actors may attempt to gain unauthorized access to our systems or data; misappropriate assets, confidential information, intellectual property, or personal information; introduce malware or corrupt data; extort payments; disrupt our operations, supply chain, eCommerce websites, retail studios, manufacturing, distribution, or financial reporting processes; or compromise third-party systems connected to our operations.
Our systems maintain personally identifiable information, including employee data, customer and payment-related information, and other confidential business information. We cannot guarantee that our security measures, monitoring, incident response processes, vendor risk management program, or other controls will prevent or timely detect all unauthorized access, misuse, or disclosure of such information. A cybersecurity incident could result in operational disruption, loss of business information, litigation, regulatory investigations, notification obligations, fines, claims for damages, remediation costs, increased compliance costs, negative publicity, reputational harm, and loss of confidence by customers, dealers, suppliers, employees, and other stakeholders, any of which could adversely affect our business, financial condition, and results of operations.
Our business is increasingly dependent on information technology systems that are complex and relied on extensively throughout our business operations. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputational risk. We have invested, and expect to continue to invest, in maintaining and updating our technology systems, however implementing changes increases the risk of system disruption.
Approximately 35% of the sales within our Global Retail segment are transacted within our retail stores. Additionally, we believe our retail stores have a direct influence on the volume of business transacted through other channels, including our consumer eCommerce and direct-mail catalog platforms, as many customers utilize these physical spaces to view and experience products prior to placing an order online or through the catalog call center. Our ability to open additional stores or close existing stores successfully will depend upon a number of factors beyond our control, including, without limitation:
Additionally, increasedcontinued focus by the U.S. and other governmental authorities on climate change and other environmental matters has led to enhanced regulation in these areas, which is expected to result in increased compliance costs and could subject us to additional potential liabilities. The extent of these costs and risks is difficult to predict and will depend in large part on the extent of final regulations and the ways in which those regulations are enforced. We operate and have manufacturing facilities in multiple regions across the globe, and the impact of additional regulations in this area is likely to vary by region. It is expected the costs we incur to comply with any such final regulations and execute on our own sustainability goals could be material.
Management's Discussion & Analysis (MD&A)
New heading “Consolidated Results”
New heading “Segment Results”
New heading “Material Cash Requirements”
Removed heading “Challenges Ahead”
Removed heading “Contractual Obligations”
Removed heading “Business Combinations”
Largest changes
“During the third quarter of fiscal 2025, management identified impairment triggering events resulting from lower-than-expected operating performance and, accordingly, performed a quantitative goodwill impairment assessment for each reporting unit. As a result, the Company recognized non-cash goodwill impairment charges of $30.1 million and $62.2 million related to the Global Retail and Holly Hunt reporting units, respectively. This impairment was driven primarily by reduced sales and profitability projections, as well as higher discount rates. …”see in full comparison
“As a result of the third quarter fiscal year 2025 goodwill impairment test, the Company recognized a total non-cash impairment charge of $30.1 million and $62.2 million in its Global Retail and Holly Hunt reporting units, respectively. The goodwill impairment charges were primarily caused by reduced sales and profitability projections as well as an increase in the discount rate. …”see in full comparison
“Additionally, in the third quarter of fiscal year 2025 the Company implemented an organizational change that resulted in a change in the reportable segments and reporting units. As a result, the Company performed the required impairment assessments directly before and immediately after the change in reporting units. As a result of this change, $26.1 million of goodwill was reassigned from the Americas Contract reporting unit to the International Contract reporting unit, based on the relative fair value approach. …”see in full comparison
“Each of the reporting units was reviewed for impairment using a qualitative assessment as of March 31, 2025. The Company elected to test each reporting unit qualitatively, as is permitted under ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. Through the performance of this qualitative assessment we determined that there were no indicators of impairment.”see in full comparison
“Each indefinite-lived intangible asset was reviewed for impairment using a qualitative assessment as of March 31, 2025. The Company elected to test each asset qualitatively, as is permitted under ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. Through the performance of this qualitative assessment we determined that there were no indicators of impairment.”see in full comparison
“•The effects of the ongoing conflict and broader geopolitical instability in the Middle East, including with respect to negative impacts on our supply chain, decreased sales within the region or beyond due to supply chain constraints, and broader inflationary and macroeconomic effects;”see in full comparison
Full comparison: every changed paragraph (213)
You should read the issues discussed inThis Management's Discussion and Analysis should be read in conjunction with the Company's Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Refer also to the information provided under the heading "Forward-Looking Statements" in this Annual Report on Form 10-K.
•North America Contract — 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|Spinneybeck, FilzFelt, Maharam, Edelman, and Knoll Textile brands.
•Product Portfolio and Brand Collective - MillerKnoll is a collective of globally recognized design brands known for working with some of the most well-known and respected designers in the world. Combined, the Company represents over 100 years of design research and exploration in service of humanity. Within the industries in which the Company operates, Herman Miller and Knoll, along with Colebrook Bosson Saunders, DatesWeiser, Design Within Reach, Edelman, FilzFelt, Geiger, HAY, Holly Hunt, Maharam, Muuto, NaughtOne,NaughtOne and Spinneybeck|FilzFelt are acknowledged as leading brands that inspire architects and designers to create their best design solutions. This portfolio has enabled MillerKnoll to connect with new audiences, channels, geographies, and product categories. Leveraging the collective brand equity of MillerKnoll across the lines of business is an important element of the Company's business strategy.
•Unique Business Model - The Company has built a multi-channel distribution capability that it considers unique. Through contract furniture dealers, direct customer sales, retail stores and studios, eCommerce, wholesalers, and independent retailers, the Company serves contract and residential customers across a range of channels and geographies. As it pertains to its operations, the Company was among the first in the industry to embrace the conceptsconcept of lean manufacturing. MKPS provides the foundation for all the Company's manufacturing operations. The Company is committed to continuously improving both product quality and production and operational efficiency. The Company believes these concepts hold significant promise for further gains in reliability, quality, and efficiency.
•Retail Locations - As of May 31,30, 2025,2026, the Company operated 7593 retail studiosstores, (including 38 operating under the45 DWR brand,stores, 1 under the HAY brand, 3039 Herman Miller stores, 34 Knoll stores, 1 Muuto stores,store, 21 KnollHAY storesstore, and a multi-brand Chicago store). The business also operated 3 outlet studios.stores.
Challenges Ahead
Like all businesses, the Company is faced with a host of challenges and risks. The Company believes its core strengths and values, which provide the foundation for its strategic direction, have prepared the Company to respond to the inevitable challenges it will face in the future. While the Company is confident in its direction, it acknowledges the risks specific to our business and industry. Refer to Item 1A for discussion of certain of these risk factors and Item 7A for disclosures of market risk.
We are prioritizing programs to deliver world class experiences with every client interaction. We have a global, go-to-market framework for contract sellers, Design With Impact, that is organized around well-being, connection and change, and we are investing in MillerKnoll showrooms that bring our brands closer together to show the breadth of our offerings. As part of this work, we are enhancing and opening MillerKnoll showrooms in select marketsmarkets, including, Atlanta, Chicago, Dallas, London, Los Angeles, New York, Toronto and San Francisco. In additionaddition, we will continue to leverage the wide reach of our dealers’ showrooms around the globe.
In retail, we are working to evolve and enhance the Design Within ReachDWR experience. We are expanding the retail footprint of both our DWR studios and Herman Miller stores into new geographic markets, with a primary focus on growth within the United States. We are testing new store formats, expanding our product assortment and offering design services both in store and online to enhance the customer experience, attract new customers and grow existing customers. In addition, we continue to launch new online tools to support our trade customerscustomers, making it easier for them to incorporate our products in their client projects.
The Company believes that engagement and education are critical to enabling Associates to deliver extraordinary performance. The Company conducts annual engagement surveys across its global associate population to gather feedback on its human capital practices and measure employee engagement. The results help identify areas for improvement and guide action plans that support continued associate engagement and development.
Our collective of dynamic brands areis united in theirits commitment to our purpose,purpose - design for the good of humankind,humankind - and they offeroffers a complementary set of design solutions. By leveraging our global operations footprint, we are able to fuel our brands and build solutions in market closer to our customers, and we are creating centers of excellence in our operations facilities to support all brands in each region.
The following issummary aprovides summaryan overview of the significantCompany’s eventsoperating performance and itemssegment impacting the Company's operationsresults for the year ended May 31,30, 20252026:
Consolidated Results
•Net sales were $3,669.9$3,841.7 million, representing an increase of 1.1%4.7% when compared to the prior year. Growth was primarily driven by increased sales volumes inacross the North America Contract and International Contractall segments, along with the positive impact of pricing actions.actions Theseand drivers more than offset sales declines due to unfavorablefavorable foreign currency translation, the strategic closure of the HAY eCommerce channel in North America and sales volume declines in the Global Retail segment.translation. On an organic basis, net sales were $3,676.1$3,800.4 million(*), representing an increase of 1.6%3.6% when compared to the prior year.
•Gross margin was 38.8% as compared to 39.1% in the prior year. The decline in gross margin was driven by increases in material costs, some of which are related to increases in tariffs during the year, as well as from unfavorable channel and product mix. These pressures were offset in part by gross margin benefit from favorable net pricing.
•Operating expenses increased by $119.8 million or 9.6% as compared to the prior year. The increase was primarily related to an increase in non-cash intangible impairment charges of $113.2 million.
•The effective tax rate was negative 53.1% for fiscal 2025 compared to 14.8% for the prior year.
•Diluted loss per share for the full year totaled $0.54 compared to earnings per share of $1.11 in the prior year. On an adjusted basis(*), diluted earnings per share totaled $1.95 in fiscal 2025 compared to $2.08 in fiscal 2024.
•TheGross Companymargin declaredwas cash dividends of $0.75 per share38.8% in both fiscal 20252026 and fiscal 2024.2025.
•Operating expenses decreased by $81.6 million or 5.9% as compared to the prior year. The decrease was driven primarily from the impact of non-cash intangible impairment charges in the prior year, partially offset by an increase in fixed and variable compensation costs and incremental costs related to the expanded retail store footprint.
◦Operating earnings were $198.3 million in fiscal 2026 compared to $50.5 million in fiscal 2025.
◦Adjusted operating income was $238.4 million in fiscal 2026 compared to $248.7 million in fiscal 2025.
•The effective tax rate was 25.3% compared to negative 53.1% for the prior year. The fiscal 2025 tax rate was impacted by non-deductible goodwill impairment charges that did not occur in fiscal 2026.
•Diluted earnings per share for the full year totaled $1.32 compared to loss per share of $0.54 in the prior year. Adjusted diluted earnings per share(*) totaled $1.86 in fiscal 2026 compared to $1.95 in fiscal 2025.
•The Company declared cash dividends of $0.75 per share in both fiscal 2026 and fiscal 2025.
Segment Results
The following summary includes the Company's view on the economic environment in which it operates:
•The current global macroeconomic environment — which reflects higher interest rates, tepid housing-related demand trends, relatively low CEO and consumer confidence levels, as well as geopolitical and global trade uncertainty — continues to pose challenges for the industry. While these factors are expected to continue in the near term, we are focused on prudent cost management and investment in targeted growth opportunities. These opportunities include growth within the Global Retail segment through expansion of our North American store footprint and product assortment. Within our North America Contract and International Contract segments, our strategy is focused on targeting economically resilient customer sectors, continued investment in product design and innovation leadership and expansion into geographies with opportunity to grow our market share.
•The Company's financial performance is sensitive to changes in material costs including changes related to tariffs or commodity cost changes. During fiscal year 2025 there were changes in trade policies that have resulted and are expected to continue to result in added cost pressures. The Company has implemented pricing actions together with other mitigation strategies that, over time, are expected to offset the net impact of tariff costs on the financial results.
•The North America Contract segment reported a net sales increase of 2.2% and an organic sales increase of 2.4%(*) year-over-year. Operating margin increased 60 basis points year-over year and 50 basis points on an adjusted basis(*). The increase was primarily driven by a reduction in restructuring charges as compared to the prior period
•The InternationalNorth America Contract segment reported a net sales increase of 2.2%4.9% and an organic sales increase of 2.7%4.8%(*) year-over-year. Operating margin increased 10280 basis points year-over-yearyear-over year and decreased 1060 basis points on an adjusted basis(*).
•The GlobalInternational RetailContract segment reported a net sales decreaseincrease of 1.5%2.1% and an organic sales decrease of 0.3%1.2%(*) year-over-year. Operating margin decreased 1,110150 basis points year-over yearyear-over-year and 110decreased 250 basis points on an adjusted basis(*). The decrease on a reported basis was primarily driven by non-cash intangible asset impairment charges recorded in the current year.
•The Global Retail segment reported a net sales increase of 5.9% and an organic sales increase of 4.3%(*) year-over-year. Operating margin increased 860 basis points year-over year and decreased 200 basis points on an adjusted basis(*). The increase on a reported basis was primarily driven by non-cash intangible asset impairment charges recorded in the prior year.
The remaining sections of Item 7 include additional analysis of the fiscal year ended May 31,30, 2025,2026, including discussion of significant variances compared to the prior year period. A detailed review of our fiscal 20242025 performance compared to our fiscal 20232024 performance is set forth in Part II, Item 7 of our Form 10-K for the fiscal year ended JuneMay 1,31, 2024.2025.
This presentationreport contains non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. These non-GAAP financial measures are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included within this presentation. The Company believes these non-GAAP measures are useful for investors as they provide financial information on a more comparative basis for the periods presented. Certain non-GAAP measures, including adjusted operating earnings, are used by the Company in its executive compensation program.
The non-GAAP financial measures referenced within this presentationreport include: Adjusted Earnings per Share,Share - Diluted, Adjusted Operating Earnings (Loss), Adjusted Operating Margin and Organic Growth (Decline).
Adjusted Earnings per Share - Diluted 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 chargescharges, debt extinguishment charges, CEO transition costs, and the related tax effect of these adjustments. These adjustments are described further below.
Adjusted Operating Earnings (Loss) represents reported operating earnings plusless integration charges, amortization of Knoll purchased intangibles, restructuring expenses, impairment charges andcharges, Knoll pension plan termination charges.charges, Theseand adjustmentsCEO aretransition described further below.costs.
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.effects.
•Restructuring charges: Includes costs associated with actions involving targeted workforce reductions.reductions, facility consolidation charges, and accelerated depreciation of fixed assets.
•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.
•Debt extinguishment charges: Includes expenses associated with the extinguishment of debt. We excluded these items from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance.
•Impairment charges: Includes non-cash 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.
•CEO transition costs: Includes expenses consisting primarily of severance, benefits and advisory fees.
•Tax related items: We excluded the income tax benefit/provision effect of the tax related items from our non-GAAP measures because they are not associated with the tax expense on our ongoing operating results.
The following table reconciles Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment and on a consolidated basis for MillerKnoll, Inc. for the yearsperiods ended as indicated below (in millions):
•Price increases, net of discounting, which positively impacted Net sales by approximately $74 million.
•Increased sales volume within the International Contract and North America Contract segments of approximately $28 million and $25 million, respectively.
•Net price increases, which contributed approximately $14 million to Net sales, reflecting our ability to maintain pricing discipline in a competitive environment. Offset in part by:
•A $12 million reduction due to the strategic closure of the HAY eCommerce channel in North America that occurred in the prior year.
•Decreased sales volume within the Global Retail segment of approximately $7 million.
•UnfavorableFavorable foreign currency impacttranslation, ofwhich increased Net sales by approximately $6$41 million.
•Increased sales volume in the North America Contract, Global Retail, and International Contract segments contributed approximately $25 million, $24 million and $8 million respectively.
Gross margin for fiscal 2026 and fiscal 2025 was 38.8%. Gross margin was stable year over year, reflecting offsetting favorable and unfavorable impacts as described below.
•Favorable channel and product mix and the impact of incremental list price increases, partially offset by contract price discounting, which positively impacted margin.
•Favorable leverage on fixed costs due to higher sales volumes which positively impacted margin.
•These increases were offset by tariff-related costs, partially offset by pricing actions, incurred in the first half of the year which adversely impacted gross margin.
Gross margin for fiscal 2025 was 38.8%, compared to 39.1% in fiscal 2024. The 30 basis point decline was primarily driven by the following factors:
•Tariff-related costs negatively impacted gross margin by 30 basis points in the year.
•Unfavorable channel and product mix negatively impacted gross margin by approximately 30 basis points. These factors were offset in part by:
What changed in the latest 10-Q
Risk Factors
There have been no material changes in the Company's risk factors from those set forth in the Company's Annual Report on Form 10-K for the year ended May 30, 2026.
Removed heading “Our business is exposed to risks related to the current and potential future conflicts in the Middle East”
Largest changes
“Our business is exposed to risks related to the current and potential future conflicts in the Middle East”see in full comparison
“Current and potential future developments related to the conflicts in the Middle East have had, and could continue to have, a broader impact on the global markets in which we do business. These conflicts are expected to cause decreased sales within the region, disruptions in our supply chain, and broader inflationary and macroeconomic effects.”see in full comparison
“In particular, continued or intensifying conflicts in the Middle East are expected to limit our ability to serve customers within the broader region, cause disruption to global supply chains, increase volatility in energy prices, and create constraint on the availability of petroleum based products, which may increase costs of raw materials, including manufacturing, transportation, and distribution inputs.”see in full comparison
“The duration, severity, and ultimate impact of these conflicts, as well as any resulting geopolitical instability, cannot be predicted with any reasonable degree of certainty. Accordingly, the extent to which these events may continue to affect our business, financial condition, results of operations, cash flows, and operational strategies remain uncertain, and such effects could be material.”see in full comparison
see in full comparisonOther than the risk factor noted below, thereThere have been no material changes in the Company's risk factors from those set forth in the Company's Annual Report on Form 10-K for the year ended May31,30,2025.2026.
Full comparison: every changed paragraph (5)
Other than the risk factor noted below, thereThere have been no material changes in the Company's risk factors from those set forth in the Company's Annual Report on Form 10-K for the year ended May 31,30, 2025.2026.
Our business is exposed to risks related to the current and potential future conflicts in the Middle East
Current and potential future developments related to the conflicts in the Middle East have had, and could continue to have, a broader impact on the global markets in which we do business. These conflicts are expected to cause decreased sales within the region, disruptions in our supply chain, and broader inflationary and macroeconomic effects.
In particular, continued or intensifying conflicts in the Middle East are expected to limit our ability to serve customers within the broader region, cause disruption to global supply chains, increase volatility in energy prices, and create constraint on the availability of petroleum based products, which may increase costs of raw materials, including manufacturing, transportation, and distribution inputs.
The duration, severity, and ultimate impact of these conflicts, as well as any resulting geopolitical instability, cannot be predicted with any reasonable degree of certainty. Accordingly, the extent to which these events may continue to affect our business, financial condition, results of operations, cash flows, and operational strategies remain uncertain, and such effects could be material.
Management's Discussion & Analysis (MD&A)
Largest changes
•Operating expensessee in full comparisondecreasedincreased$106.6$18.9 million or25.7%6.0% as compared to the same quarter of the prior year. Thedecreaseincrease was driven primarilyfrom the impact of non-cash impairment charges in the prior year. This decrease was partially offsetbyan increase inhigher fixed and variable compensationcostscosts, increased restructuring charges associated with facility consolidation and workforce reduction initiatives, and incremental costs related tothe expanded retailnew storefootprint.openings. These increases were partially offset by savings generated through cost management initiatives implemented across the business.
“Operating expenses increased $18.9 million, or 6.0%, in the first quarter of fiscal 2027 compared to the prior year period. The increase was primarily driven by approximately $13 million of higher fixed and variable compensation costs, approximately $6 million of restructuring charges associated with facility consolidation and workforce reduction initiatives, and approximately $5 million of incremental costs related to new store openings. These increases were partially offset by savings generated through cost management initiatives implemented across the business.”see in full comparison
“•Impairment charges of $130 million related to goodwill attributed to the Global Retail and Holly Hunt reporting units, as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets that occurred in the prior year period. This decrease was offset in part by:”see in full comparison
“◦Foreign currency translation which contributed an unfavorable impact of approximately $2 million compared to the prior year. These increases were offset in part by decreased restructuring charges and impairment charges as compared to the prior year period.”see in full comparison
“•Impairment charges of $130 million related to goodwill attributed to the Global Retail and Holly Hunt reporting units, as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets that occurred in the prior year period.”see in full comparison
“•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.”see in full comparison
Full comparison: every changed paragraph (201)
Business Overview and Quarterly Highlights
The following is a summary of results for the three months ended FebruaryAugust 28,29, 2026:
•Net sales were $926.6$923.4 million and orders were $931.6$913.9 million, representing ana increasedecrease of 5.8%3.4% and an increase of 9.2%,3.2%, respectively, when compared to the same quarter of the prior year. On an organic* basis, which excludes the impact of foreign currency translation, Netnet sales were $909.4$924.5 million and orders were $914.8$916.2 million, representing an organic* increasedecrease of 3.8%3.3% and an organic* increase of 7.2%,3.5%, respectively, when compared to the same quarter of the prior year.
•Gross margin in the thirdfirst quarter was 38.1%,41.7%, an increase of 20320 basis points when compared to the same quarter of the prior year, related primarily to incremental pricing and the favorable impact of favorablerefunds leveragetotaling on$16.5 fixedmillion costsfrom ontariffs higherpreviously salesimposed volumesby asthe wellU.S. asgovernment favorableunder channelthe andInternational productEmergency mix.Economic Powers Act ("IEEPA").
•Operating expenses decreasedincreased $106.6$18.9 million or 25.7%6.0% as compared to the same quarter of the prior year. The decreaseincrease was driven primarily from the impact of non-cash impairment charges in the prior year. This decrease was partially offset by an increase inhigher fixed and variable compensation costscosts, increased restructuring charges associated with facility consolidation and workforce reduction initiatives, and incremental costs related to the expanded retailnew store footprint.openings. These increases were partially offset by savings generated through cost management initiatives implemented across the business.
•The effective tax rate was 19.2%21.5% compared to 88.3%26.5% for the same quarter of the prior year. The change compared to the prior year relates primarily to thefavorable discreteimpacts from lower non-deductible officers' compensation, higher export tax impactsincentives, ofand thean impairments recordedincrease in theforeign priortax year.credits.
•Diluted earnings per share in the quarter was $0.34$0.38 compared to a loss of $0.19$0.29 in the prior year. Adjusted diluted earnings per share* was $0.43,$0.53, a 2.3%17.8% decreaseincrease compared to the prior year quarter.quarter, which includes the $0.11 impact of net IEEPA tariff refunds.
A comparison of Netnet sales and orders during the thirdfirst quarter compared to the prior year quarterperiod by segment is as follows:
•The North America Contract segment inreported the thirdfirst quarter reported Netnet sales totalingof $488.6$505.6 million, anrepresenting increasea decrease of 4.4%5.3% on a reported basis and 5.2% on an organic* basis compared to the prior year periodperiod. Orders totaled $483.7 million, a decrease of 1.7% on a reported basis and 4.1%1.6% on an organic* basis. North America Contract had orders of $490.9 million, which represents an increase of 13.1% from the prior year on a reported basis and 12.8% on an organic* basis.
•The International Contract segment deliveredreported Netnet sales in the thirdfirst quarter of $156.9$156.8 million, anrepresenting increasea decrease of 7.8%6.4% on a reported basis and 6.2% on an organic* basis compared to the prior year periodperiod. Orders totaled $181.2 million, an increase of 17.3% on a reported basis and an increase of 1.9% organically*. Orders in the segment totaled $160.3 million, representing a year-over-year increase of 0.7%17.9% on aan reportedorganic* basis and a decrease of 4.3% organically*.basis.
•The Global Retail segment reported first quarter net sales of $261.0 million, representing an increase of 2.6% on a reported basis and 2.8% on an organic* basis compared to the prior year period. Orders totaled $249.0 million, an increase of 4.3% on a reported basis and 4.7% on an organic* basis.
•Net sales in the third quarter for the Global Retail segment totaled $281.1 million, an increase of 7.1% over the same quarter last year on a reported basis and an increase of 4.4% organically*. Orders in the quarter totaled $280.4 million, up 7.9% compared to the same period last year on a reported basis and up 5.1% organically*.
The remaining sections within Item 2 include additional analysis of the three and nine months ended FebruaryAugust 28,29, 2026, including discussion of significant variances compared to the prior year periods.
The following table presents certain quarterly highlights from the results of operations for the three months ended:
The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive Income as a percentage of Net sales, for the three months ended:
Adjusted Earnings per Share - Diluted 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, debt extinguishment chargescharges, CEO transition costs and the related tax effect of these adjustments. These adjustments are described further below.
The adjustments made to arrive at these non-GAAP financial measures are as followsfollows. We exclude these items from our non-GAAP measures because they are not reflective of our ongoing financial performance:
•Integration charges: Includes Knoll integration-related costs which include severance, asset impairment charges associated with lease and operations facility consolidation activity, and expenses related to synergy realization efforts and reorganization initiatives.
•Restructuring charges: Includes costs associated with actions involving targeted workforce reductions, facility consolidation charges,consolidations, and accelerated depreciation of fixed assets.
•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.
•Knoll pension plan termination charges: Includes expenses incurred associated with the termination of the Knoll pension plan which was completed in the second quarter of fiscal year 2025.
•Debt extinguishment charges: Includes expenses associated with the extinguishment of debt. We excluded these items from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance.
•CEO transition costs: Includes one‑time expenses consisting primarily of severance, benefits and advisory fees.
The following tables reconcile Netnet salessales, as reported to Netnet sales, organic for the periods ended as indicated below:
The following tables reconcile ordersorders, as reported to orders, organic orders for the periods ended as indicated below:
Key Highlights
The following table presents certain key highlights from the results of operations for the three and nine months ended:
The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) as a percentage of Net sales, for the three and nine months ended:
The following chart presents graphically the primary drivers of the year-over-year change in Netnet sales for the three and nine months ended FebruaryAugust 28,29, 2026. The amounts presented in the graph are expressed in millions and have been rounded.
Net sales decreased $32.3 million, or 3.4%, in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026. The decrease was primarily driven by lower sales volumes in the North America Contract and International Contract segments, which reduced net sales by approximately $48 million and $7 million, respectively, as well as unfavorable foreign currency translation of $1 million. These decreases were partially offset by the favorable impact of price realization, net of discounting, which contributed approximately $23 million to net sales.
Net sales increased $50.4 million or 5.8% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025. The increase was primarily driven by:
•Price increases, net of discounting, which positively impacted net sales by approximately $23 million.
•Favorable foreign currency translation, which increased net sales by approximately $17 million.
•Increased sales volumes in the Global Retail, International Contract, and North America Contract segments contributed approximately $5 million, $4 million, and $2 million, respectively.
Net sales increased $129.4 million or 4.8% in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025. The following items contributed to the change:
•Price increases, net of discounting, which positively impacted net sales by approximately $42 million.
•Favorable foreign currency translation, which increased net sales by approximately $34 million.
•Increased sales volumes in the Global Retail, North America Contract and International Contract segments contributed approximately $23 million, $23 million and $8 million, respectively.
Gross margin wasincreased 38.1%to 41.7% in the thirdfirst quarter of fiscal 2026,2027 comparedfrom to 37.9%38.5% in the thirdfirst quarter of fiscal 2025.2026. The year-over-year change in gross margin percentageincrease was primarily driven by:
•Favorable leverage on fixed costs due to higher sales volumes and operational efficiency which positively impacted margin.
Gross margin was 38.5% in the nine months ended February 28, 2026, compared to 38.6% 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:
•Favorable channelpricing, and product mix andreflecting the impact of incremental list price increases, netpartially ofoffset by contract price discounting which positively impacted margin.discounting.
•The favorable impact of refunds received from the U.S. government related to previously incurred IEEPA tariffs, which contributed approximately $16.5 million to gross margin.
These favorable impacts were partially offset by inflationary cost pressures and unfavorable leverage of fixed manufacturing costs resulting from lower sales volumes.
•Favorable leverage on fixed costs due to higher sales volumes which positively impacted margin.
•These increases were more than offset by tariff-related costs, net of pricing actions taken to help offset costs, incurred in the first half of the year that adversely impacted gross margin.
The following chart presents graphically the primary drivers of the year-over-year change in Operatingoperating expenses for the three and nine months ended FebruaryAugust 28,29, 2026. The amounts presented in the graphs are expressed in millions and have been rounded.
Operating expenses increased $18.9 million, or 6.0%, in the first quarter of fiscal 2027 compared to the prior year period. The increase was primarily driven by approximately $13 million of higher fixed and variable compensation costs, approximately $6 million of restructuring charges associated with facility consolidation and workforce reduction initiatives, and approximately $5 million of incremental costs related to new store openings. These increases were partially offset by savings generated through cost management initiatives implemented across the business.
Operating expenses decreased by $106.6 million or 25.7% in the third quarter of fiscal 2026 compared to the prior year period. The following factors contributed to the change:
•Impairment charges of $130 million related to goodwill attributed to the Global Retail and Holly Hunt reporting units, as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets that occurred in the prior year period. This decrease was offset in part by:
•Increased fixed and variable compensation costs of approximately $14 million.
•Incremental costs of $4 million associated with the impact from opening new stores.
•Unfavorable foreign currency translation of $4 million as compared to the prior year period.
•Variable selling costs which rose by approximately $1 million compared to the prior year period.
Operating expenses decreased by $103.9 million or 9.9% in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025. The following factors contributed to the change:
•Impairment charges of $130 million related to goodwill attributed to the Global Retail and Holly Hunt reporting units, as well as related to the Knoll and Muuto indefinite-lived trade name intangible assets that occurred in the prior year period.
•Acquisition-related integration charges which totaled approximately $28 million that occurred in the prior year. These decreases were offset in part by:
◦Increased fixed and variable compensation costs of approximately $27 million.
◦Incremental costs of $11 million associated with the impact from opening new stores.
◦Variable selling costs, including sales-based commissions and royalty expenses which rose by approximately $10 million compared to the prior year period.
MLKN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-01 | Veltman Kevin J. |
Grant/award | 233 | — | — |
| 2026-08-01 | Veltman Kevin J. |
Shares withheld for tax | 254 | $22.52 | $5.7K |
| 2026-08-01 | Veltman Kevin J. |
Grant/award | 582 | — | — |
| 2026-08-01 | Veltman Kevin J. |
Shares withheld for tax | 569 | $22.52 | $12.8K |
| 2026-08-01 | Veltman Kevin J. |
Option exercise | 1,172 | — | — |
| 2026-08-01 | Veltman Kevin J. |
Shares withheld for tax | 218 | $22.52 | $4.9K |
| 2026-08-01 | Veltman Kevin J. |
Shares withheld for tax | 102 | $22.52 | $2.3K |
| 2026-08-01 | Veltman Kevin J. |
Grant/award | 499 | — | — |
| 2026-08-01 | Watson Bruce Benedict |
Shares withheld for tax | 3,949 | $22.52 | $88.9K |
| 2026-08-01 | Watson Bruce Benedict |
Option exercise | 8,138 | — | — |
| 2026-08-01 | Watson Bruce Benedict |
Shares withheld for tax | 1,511 | $22.52 | $34.0K |
| 2026-08-01 | Watson Bruce Benedict |
Shares withheld for tax | 707 | $22.52 | $15.9K |
| 2026-08-01 | Watson Bruce Benedict |
Grant/award | 3,466 | — | — |
| 2026-08-01 | Watson Bruce Benedict |
Grant/award | 4,041 | — | — |
| 2026-08-01 | Watson Bruce Benedict |
Shares withheld for tax | 1,762 | $22.52 | $39.7K |
| 2026-08-01 | Watson Bruce Benedict |
Grant/award | 1,621 | — | — |
| 2026-08-01 | Michael John P |
Option exercise | 10,783 | — | — |
| 2026-08-01 | Michael John P |
Shares withheld for tax | 5,214 | $22.52 | $117.4K |
| 2026-08-01 | Michael John P |
Grant/award | 5,355 | — | — |
| 2026-08-01 | Michael John P |
Shares withheld for tax | 2,326 | $22.52 | $52.4K |
| 2026-08-01 | Michael John P |
Grant/award | 2,148 | — | — |
| 2026-08-01 | Michael John P |
Shares withheld for tax | 933 | $22.52 | $21.0K |
| 2026-08-01 | Michael John P |
Grant/award | 4,592 | — | — |
| 2026-08-01 | Michael John P |
Shares withheld for tax | 1,995 | $22.52 | $44.9K |
| 2026-08-01 | Propst Debbie F |
Shares withheld for tax | 2,482 | $22.52 | $55.9K |
| 2026-08-01 | Propst Debbie F |
Grant/award | 5,355 | — | — |
| 2026-08-01 | Propst Debbie F |
Shares withheld for tax | 995 | $22.52 | $22.4K |
| 2026-08-01 | Propst Debbie F |
Option exercise | 10,783 | — | — |
| 2026-08-01 | Propst Debbie F |
Grant/award | 2,148 | — | — |
| 2026-08-01 | Propst Debbie F |
Shares withheld for tax | 2,128 | $22.52 | $47.9K |
| 2026-08-01 | Propst Debbie F |
Grant/award | 4,592 | — | — |
| 2026-08-01 | Propst Debbie F |
Shares withheld for tax | 5,562 | $22.52 | $125.2K |
| 2026-08-01 | Jacqueline Hourigan Rice |
Shares withheld for tax | 1,284 | $22.52 | $28.9K |
| 2026-08-01 | Jacqueline Hourigan Rice |
Grant/award | 3,435 | — | — |
| 2026-08-01 | Jacqueline Hourigan Rice |
Option exercise | 6,917 | — | — |
| 2026-08-01 | Jacqueline Hourigan Rice |
Shares withheld for tax | 1,498 | $22.52 | $33.7K |
| 2026-08-01 | Jacqueline Hourigan Rice |
Grant/award | 1,378 | — | — |
| 2026-08-01 | Jacqueline Hourigan Rice |
Shares withheld for tax | 601 | $22.52 | $13.5K |
| 2026-08-01 | Jacqueline Hourigan Rice |
Grant/award | 2,946 | — | — |
| 2026-08-01 | Jacqueline Hourigan Rice |
Shares withheld for tax | 3,357 | $22.52 | $75.6K |
| 2026-08-01 | Stutz Jeffrey M |
Shares withheld for tax | 5,233 | $22.52 | $117.8K |
| 2026-08-01 | Stutz Jeffrey M |
Grant/award | 5,355 | — | — |
| 2026-08-01 | Stutz Jeffrey M |
Shares withheld for tax | 2,335 | $22.52 | $52.6K |
| 2026-08-01 | Stutz Jeffrey M |
Shares withheld for tax | 937 | $22.52 | $21.1K |
| 2026-08-01 | Stutz Jeffrey M |
Grant/award | 2,148 | — | — |
| 2026-08-01 | Stutz Jeffrey M |
Shares withheld for tax | 2,002 | $22.52 | $45.1K |
| 2026-08-01 | Stutz Jeffrey M |
Option exercise | 10,783 | — | — |
| 2026-08-01 | Stutz Jeffrey M |
Grant/award | 4,592 | — | — |
| 2026-07-22 | Veltman Kevin J. |
Option exercise | 2,604 | — | — |
| 2026-07-22 | Veltman Kevin J. |
Shares withheld for tax | 351 | $21.90 | $7.7K |
| 2026-07-22 | Veltman Kevin J. |
Option exercise | 744 | — | — |
| 2026-07-22 | Veltman Kevin J. |
Shares withheld for tax | 1,183 | $21.90 | $25.9K |
| 2026-07-22 | Watson Bruce Benedict |
Option exercise | 9,162 | — | — |
| 2026-07-22 | Watson Bruce Benedict |
Option exercise | 5,245 | — | — |
| 2026-07-22 | Watson Bruce Benedict |
Shares withheld for tax | 4,162 | $21.90 | $91.1K |
| 2026-07-22 | Watson Bruce Benedict |
Shares withheld for tax | 2,473 | $21.90 | $54.2K |
| 2026-07-22 | Michael John P |
Shares withheld for tax | 2,815 | $21.90 | $61.7K |
| 2026-07-22 | Michael John P |
Shares withheld for tax | 4,716 | $21.90 | $103.3K |
| 2026-07-22 | Michael John P |
Option exercise | 5,994 | — | — |
| 2026-07-22 | Michael John P |
Option exercise | 10,421 | — | — |
Well-known investors holding MLKN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 694,383 | $14.2M | 0.02% | Added 273% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 425,311 | $8.6M | 0.0% | Added 5% |
| D. E. Shaw & Co. | 2026-06-30 | 389,348 | $8.0M | 0.0% | Added 1696% |
| Millennium Management (Israel Englander) | 2026-06-30 | 263,835 | $5.4M | 0.0% | Added 138% |
| Two Sigma Investments | 2026-06-30 | 172,108 | $3.5M | 0.0% | Reduced 31% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 126,112 | $2.6M | 0.0% | Added 9% |
| Polen Capital Management | 2026-06-30 | 12,466 | $255.1K | 0.0% | Reduced 53% |