0000066382-26-000092
SEC filingMillerKnoll's FY2026 revenue grew 4.7% to $3.84B, operating earnings surged to $198.3M, driven by price increases and volume growth.
MillerKnoll presents itself as a collective of dynamic design brands, researching, designing, manufacturing, and distributing interior furnishings for residential, office, healthcare, and educational settings worldwide. The company is a global leader in design, with a history spanning over 100 years, and emphasizes its commitment to creating positive impact through design.
The company operates through three reportable segments: North America Contract, International Contract, and Global Retail. The North America Contract segment serves contract customers in the United States and Canada. International Contract covers contract markets outside North America. Global Retail encompasses sales through owned retail stores (including Herman Miller, Design Within Reach, HAY, Knoll, and Muuto locations), independent retailers, and eCommerce platforms. No revenue share percentages are disclosed in this section.
MillerKnoll's product portfolio spans seating, furniture systems, freestanding furniture, textiles, leather, felt, and related services. Key brands include Herman Miller, Knoll, Maharam, Geiger, Design Within Reach, HAY, Muuto, and others. Notable products and trademarks include the Aeron, Mirra, Embody, and Cosm chairs, as well as the Eames Lounge Chair and Ottoman and the Barcelona chair. The company holds numerous patents and trademarks to protect its intellectual property.
Products are marketed through multiple channels: independent contract furniture dealers, direct sales, owned and independent retailers, direct-mail catalogs, and eCommerce platforms. Independent dealers accounted for approximately 53.6% of fiscal 2026 sales. Customer concentration is low, with no single independent dealer exceeding 2% of net sales. The largest customer represented 5% of net sales (about $196.8 million), and the ten largest customers aggregated 16%. The company also sells to the U.S. government via GSA schedules and competitive bids.
The contract furniture market is highly competitive, with Haworth and HNI Corporation identified as the most significant competitors. In home furnishings, competitors include Arhaus, Crate & Barrel, RH, Room & Board, Wayfair, and Williams-Sonoma. Competition centers on design, product and service quality, speed of delivery, and pricing.
Strategic priorities include research and development of innovative products, a strong focus on sustainability and reducing environmental impact, and leveraging customer-centered technologies to enhance reliability and efficiency. The company also emphasizes community and belonging, aiming to create an inclusive workplace and support diversity.
As of May 30, 2026, MillerKnoll employed approximately 10,544 people. About 2% are covered by collective bargaining agreements, primarily in the United Kingdom, Italy, and Brazil. The company has a history of no work stoppages or labor disputes and considers its employees a competitive strength. Compensation and benefits are benchmarked to retain talent.
MillerKnoll's fiscal 2026 results reflected a recovery in demand and operational discipline. Net sales increased 4.7% to $3,841.7 million, driven by price increases (net $74 million), favorable foreign currency ($41 million), and volume improvements across all segments. Gross margin held at 38.8% as pricing and mix gains offset tariff-related costs. Operating expenses declined $81.6 million (5.9%) due to the absence of prior year's $130 million impairment charges, partially offset by higher compensation and new store costs. Consequently, operating earnings surged to $198.3 million from $50.5 million, and diluted EPS improved to $1.32 from a loss of $(0.54). Adjusted EPS decreased slightly to $1.86 from $1.95, reflecting restructuring and debt extinguishment costs.
Management expects fiscal 2027 capital expenditures of $125-$135 million, focused on facility and retail investments. The company highlighted sensitivity in goodwill and indefinite-lived intangibles, noting that International Contract, Global Retail, and Coverings reporting units have limited fair value cushions. No specific revenue or earnings guidance was provided, but the strategic priorities include driving customer demand, fostering associate engagement, and delivering shareholder value through organic growth and operational efficiency.
Cash and equivalents decreased to $167.7M from $193.7M, while total debt fell to $1,294.6M from $1,337.0M, net reduction of $42.4M. The company maintains a revolver capacity of $725.0M with $404.0M available after borrowings and letters of credit. New accounts receivable securitization facility added $42.9M in borrowings. Shareholders' equity improved to $1,342.6M from $1,275.8M, driven by net earnings and OCI.
Total outstanding commitments as of May 30, 2026 include $82.1M for future capital purchases (from Note 1) and $61.4M for other purchase obligations (from Note 12), aggregating $143.5M. Additionally, operating lease liabilities total $515.8M present value, with $621.6M undiscounted payments through 2042. No supply chain purchase commitments beyond normal procurement.
Share repurchases totaled $16.3M (0.97M shares) in fiscal 2026, down from $85.6M in fiscal 2025. Remaining authorization is $164.9M under a plan originally $250.0M increased by $200.0M in July 2024. Dividends totaled $51.1M at $0.75 per share annually (quarterly $0.1875), slightly down from $51.7M. Debt net decrease of $42.4M reflects $561.8M issued (including Term Loan A amendment) and $631.3M repaid. Capex rose to $122.3M from $107.6M, representing 3.2% of sales.
Three segments: North America Contract ($2,061.2M, +4.9%), International Contract ($674.0M, +2.1%), Global Retail ($1,106.5M, +5.9%). Adjusted operating margins: North America 10.3% (up from 9.7%), International 8.7% (down from 11.1%), Global Retail 3.0% (down from 5.0%). Corporate unallocated costs $65.7M. Geographic net sales: US $2,751.8M, International $1,089.9M. Long-lived assets: US $744.6M, International $212.6M. Revenue by product category: Workplace $1,510.2M, Performance Seating $849.0M, Lifestyle $1,264.0M, Other $218.5M.
MillerKnoll's growth strategy faces execution risk from new products, acquisitions, and expansion into adjacent markets. The CEO departure in June 2026 adds uncertainty, with an interim CEO leading during a search for a permanent successor. This could disrupt decision-making and stakeholder confidence.
Consumer spending on furnishings depends on economic factors like employment, housing, and inflation. The highly competitive furniture market includes pricing pressure and the emerging threat of AI-driven commerce. The company is investing in AI but faces risks from rapid adoption by competitors and governance challenges.
Tariffs and trade policy changes, particularly U.S. tariffs on imports from Canada, Mexico, China, and the EU, have adversely impacted gross margins. The company submitted refund claims for IEEPA tariffs but faces uncertainty. Geopolitical conflicts (Middle East, Russia/Ukraine) indirectly affect supply chains, energy prices, and cybersecurity.
Reliance on single-source suppliers exposes the company to disruptions in raw materials like steel, aluminum, and plastics. Labor shortages could increase costs and reduce production capacity. The dealer network, while critical, poses financial risk if dealers face difficulties.
Indebtedness of $1.26 billion restricts financial flexibility. Goodwill and intangible asset impairment risks are highlighted by narrow fair value cushions: International Contract (3.1%), Global Retail (1.1%), Coverings (8.5%), and Knoll (6.8%) and Muuto (2.8%) trade names. Self-insurance for liabilities and employee benefits could lead to higher costs.
IT system disruptions or failures could impact operations. Cybersecurity threats from various actors are evolving; while no material incidents have occurred, the company remains vulnerable. Climate change regulations and sustainability goals may increase compliance costs and expose the company to reputational harm if targets are not met.
CFO of $199.9M exceeded net income of $95.7M, reflecting strong non-cash add-backs (depreciation $110.3M, amortization $38.0M, stock-based comp $26.0M). However, CFO declined 4.5% YoY from $209.3M, primarily due to inventory build ($37.5M use) and lower accrued liabilities. Capex rose 13.7% to $122.3M, representing 61% of CFO, indicating moderate capital intensity. Free cash flow (CFO less capex) was $77.6M, covering dividends ($51.1M) and share repurchases ($16.3M) 1.2x. The company generated sufficient cash to fund capital returns despite lower operating cash flow. Notable anomalies include a $130.0M impairment charge in FY2025 (none in FY2026) and a $8.0M loss on debt extinguishment in FY2026. Working capital changes consumed $62.5M, driven by inventory and prepaids. Overall, cash generation remains solid but pressured by rising capex and working capital needs.
Dividends and buybacks totaled $67.4M, down from $136.6M in FY2025, as the company prioritized debt reduction (net debt repayments of $194.9M). The dividend payout ratio based on FCF was 66%, sustainable given the cash flow profile.