0000066382-26-000050
SEC filingRevenue rose 5.8% to $926.6M with gross margin up 20bps, but adjusted EPS fell 2.3% to $0.43 amid prior year impairment comparisons.
In the third quarter of fiscal 2026, MillerKnoll reported net sales of $926.6 million, a 5.8% increase from $876.2 million in the prior-year quarter. Growth was primarily driven by price increases net of discounting ($23 million) and favorable foreign currency translation ($17 million), with modest volume contributions across segments. Gross margin improved 20 basis points to 38.1% as favorable fixed cost leverage from higher volumes offset tariff-related costs experienced earlier in the year. Operating expenses decreased sharply by 25.7% to $308.0 million, largely because the prior year included $130 million in non-cash impairment charges. Excluding impairments, expenses rose due to higher compensation and store expansion costs. Operating income swung to $44.9 million from a loss of $82.2 million. Net income attributable to MillerKnoll was $23.5 million ($0.34 diluted EPS), compared to a net loss of $12.7 million ($0.19 loss per share) in the prior year. Adjusted diluted EPS of $0.43 declined 2.3% from $0.44, reflecting higher operating costs and a lower benefit from adjustments.
Management did not provide quantitative revenue or earnings guidance but indicated full-year capital purchases of $120–$130 million, up from $107.6 million in fiscal 2025, reflecting investments in facilities, retail stores, and sustainability. The company expects to fund these through cash on hand and operations. The MD&A highlights ongoing tariff uncertainty and geopolitical risks but emphasizes a well-positioned balance sheet with $594.0 million in total liquidity. Key strategic priorities include retail store expansion and leveraging operational efficiencies to offset cost pressures.
As of February 28, 2026, MillerKnoll reported cash and cash equivalents of $174.6M, down from $193.7M at May 31, 2025. Total debt (carrying value) stood at $1,310.1M, a decrease of $26.9M, primarily driven by principal payments on Term Loan A and B and net repayments on the revolver, partially offset by $70.2M drawn on the new accounts receivable securitization facility. Shareholders' equity increased to $1,335.6M from $1,275.8M, aided by net earnings of $70.8M and favorable foreign currency translation. The company had $419.4M available under its $725M revolving credit facility, net of letters of credit. Inventories increased to $491.8M from $447.5M, reflecting higher finished goods.
The notes disclose no material purchase commitments or contractual obligations beyond normal warranty reserves ($70.4M), performance bonds ($15.2M), and standby letters of credit ($12.1M). The company's restructuring liabilities are minimal ($0.7M total for 2024-2026 plans). There are no supply or capacity commitments reported.
During the nine months ended February 28, 2026, MillerKnoll allocated $38.3M to dividends ($0.1875 per quarter) and $12.3M to share repurchases, including tax withholdings. Capital expenditures totaled $83.4M, or 2.94% of sales, up from $68.1M in the prior year period. Net debt decreased by $26.9M, with the company refinancing Term Loan B in August 2025 and entering a new $90M securitization facility in September 2025. Interest expense fell to $53.5M from $59.4M.
The company reports three segments: North America Contract (52.7% of sales), International Contract (16.9%), and Global Retail (30.3%). Adjusted operating earnings for Q3 fiscal 2026 were $47.8M (9.8% margin), $12.8M (8.2%), and $8.0M (2.8%), respectively. Year-over-year revenue growth was strongest in International Contract and Global Retail at +7.8% and +7.1%, while North America Contract grew 4.4%. Geographic mix: United States 71.5% of sales, International 28.5%.
For the nine months ended February 28, 2026, MillerKnoll generated $135.1M in operating cash flow, a slight decline of 2.4% from $138.4M in the prior year period. Net earnings were $70.8M, up significantly from $23.0M, reflecting a large impairment in the prior year. Depreciation and amortization of $110.1M and stock-based compensation of $21.0M were major non-cash add-backs. Working capital changes consumed $78.2M (increase in current assets of $24.5M, decrease in current liabilities of $53.7M), compared to a $150.9M use in the prior year due to large asset increases. Restructuring expense added $4.2M. Overall, cash flow from operations remains solid.
Capital expenditures increased to $83.4M from $68.1M, resulting in an implied free cash flow (CFO minus capex) of $51.7M, down from $70.3M. The company returned $50.6M to shareholders via dividends ($38.3M) and share repurchases ($12.3M), partially funded by FCF. Financing activities included significant debt activity: net repayments of long-term debt and credit facilities totaled $164.7M, while proceeds from issuance and securitization netted $572.0M, leading to a net financing cash outflow of $83.8M. The net decrease in cash was $19.1M, leaving $174.6M at period end. Despite higher capex, operating cash flow remains adequate to cover capital returns, though the debt restructuring warrants monitoring.