MILLERKNOLL, INC.
For the period ended May 30, 2026. Filed Jul 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jul 20, 2026
MLKN$21.49-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-05-31; filed 2025-07-21.
0000066382-25-000069
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-05-30; filed 2026-07-20.
0000066382-26-000092
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 264 previous paragraphs and 259 current paragraphs.
116 unchanged; 58 reworded; 83 added; 85 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (83)
Current report
•Retail Locations - As of May 30, 2026, the Company operated 93 retail stores, including 45 DWR stores, 39 Herman Miller stores, 4 Knoll stores, 1 Muuto store, 1 HAY store, and 3 outlet stores.
Current report
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.
Current report
The following summary provides an overview of the Company’s operating performance and segment results for the year ended May 30, 2026:
Current report
Consolidated Results
Current report
•Gross margin was 38.8% in both fiscal 2026 and fiscal 2025.
Current report
•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.
Current report
◦Operating earnings were $198.3 million in fiscal 2026 compared to $50.5 million in fiscal 2025.
Current report
◦Adjusted operating income was $238.4 million in fiscal 2026 compared to $248.7 million in fiscal 2025.
Current report
Segment Results
Current report
•The International Contract segment reported a net sales increase of 2.1% and an organic sales decrease of 1.2%() year-over-year. Operating margin decreased 150 basis points year-over-year and decreased 250 basis points on an adjusted basis().
Current report
•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.
Current report
•CEO transition costs: Includes expenses consisting primarily of severance, benefits and advisory fees.
Current report
•Price increases, net of discounting, which positively impacted Net sales by approximately $74 million.
Current report
•Favorable foreign currency translation, which increased Net sales by approximately $41 million.
Current report
•Increased sales volume in the North America Contract, Global Retail, and International Contract segments contributed approximately $25 million, $24 million and $8 million respectively.
Current report
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.
Current report
•Favorable channel and product mix and the impact of incremental list price increases, partially offset by contract price discounting, which positively impacted margin.
Current report
•Favorable leverage on fixed costs due to higher sales volumes which positively impacted margin.
Current report
•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.
Current report
•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.
Current report
•Acquisition-related integration charges which totaled approximately $28 million, that occurred in the prior year. These decreases were offset in part by:
Current report
•Increased fixed and variable compensation costs of approximately $33 million.
Current report
•Incremental costs of $15 million associated with the impact from opening new stores.
Current report
•Variable selling costs, including sales-based commissions and royalty expenses, which rose by approximately $14 million.
Current report
•Foreign currency translation also contributed an increase in operating expenses of approximately $10 million.
Current report
•Increase of approximately $5 million in other expenses driven in part by program spend.
Current report
Net other expenses for fiscal 2026 totaled $70 million, compared to $72 million in fiscal 2025. The year-over-year decrease of $2 million was primarily driven by lower interest expense due to reduced debt levels and a reduction in foreign currency losses, partially offset by a loss on extinguishment of debt of approximately $8 million incurred in connection with the refinancing of term loan debt during the current year.
Current report
Net sales increased 4.9%, or 4.8%(*) on an organic basis, from the prior year due to:
Current report
•Price increases, net of discounting positively impacted net sales by approximately $69 million.
Current report
•Increased sales volume within the segment of approximately$25 million.
Current report
•Favorable foreign currency translation increased net sales by approximately $2 million.
Current report
Operating earnings increased $66 million, or 54.2% compared to the same period of the prior year due to:
Current report
◦Price increases, net of discounting resulted in a positive impact to margin.
Current report
◦Favorable product mix and operational efficiency which increased margin.
Current report
◦These increases were partially offset by tariff-related costs, net of pricing actions, incurred in the first half of the year that adversely impacted gross margin.
Current report
◦A reduction in acquisition-related integration charges, which totaled approximately $25 million.
Current report
◦Increased variable selling costs, including sales-based commissions and royalty expenses of approximately $16 million.
Current report
◦Increased compensation and benefits of approximately $13 million.
Current report
◦Increase of approximately $1 million driven primarily by restructuring charges associated with facility consolidation initiatives.
Current report
Net sales increased 2.1%, and decreased 1.2%(*) on an organic basis, from the prior year due to:
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Removed paragraphs (85)
Previous report
•Retail Locations - As of May 31, 2025, the Company operated 75 retail studios (including 38 operating under the DWR brand, 1 under the HAY brand, 30 Herman Miller stores, 3 Muuto stores, 2 Knoll stores and a multi-brand Chicago store). The business also operated 3 outlet studios.
Previous report
Challenges Ahead
Previous report
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.
Previous report
The following is a summary of the significant events and items impacting the Company's operations for the year ended May 31, 2025:
Previous report
•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.
Previous report
•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.
Previous report
The following summary includes the Company's view on the economic environment in which it operates:
Previous report
•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.
Previous report
•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.
Previous report
•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
Previous report
•Increased sales volume within the International Contract and North America Contract segments of approximately $28 million and $25 million, respectively.
Previous report
•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:
Previous report
•A $12 million reduction due to the strategic closure of the HAY eCommerce channel in North America that occurred in the prior year.
Previous report
•Decreased sales volume within the Global Retail segment of approximately $7 million.
Previous report
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:
Previous report
•Tariff-related costs negatively impacted gross margin by 30 basis points in the year.
Previous report
•Unfavorable channel and product mix negatively impacted gross margin by approximately 30 basis points. These factors were offset in part by:
Previous report
•Effective pricing strategies, net of incremental discounting, which contributed approximately 30 basis points of margin improvement.
Previous report
•An increase of $113 million in non-cash intangible impairment charges;
Previous report
•Selling and marketing expenses increased by $10 million, primarily due to higher selling and marketing costs within the Global Retail segment;
Previous report
•Variable selling costs, which include sales-based commission and royalty expense, increased approximately $7 million;
Previous report
•Increased acquisition-related integration costs as compared to the prior year, totaling approximately $4 million. These increases were partially offset by:
Previous report
•A $16 million reduction in restructuring charges as compared to the prior year.
Previous report
Net other expenses for fiscal 2025 totaled $72.4 million, compared to $67.5 million in fiscal 2024. The year-over-year increase of $4.9 million was primarily attributable to the following factors:
Previous report
•A $2.3 million reduction in net periodic benefit income, resulting from the termination of the Knoll pension plan during the current fiscal year.
Previous report
•A $3.1 million increase in foreign currency losses compared to the prior year, reflecting greater volatility in exchange rates.
Previous report
Effective as of March 1, 2025, the last day of the third quarter of fiscal 2025, the Company implemented an organizational change that resulted in a change in the reportable segments. The Company has recast historical results to reflect this change.
Previous report
Net sales increased 2.2%, or 2.4%(*) on an organic basis, from the prior year due to:
Previous report
•Increased sales volume within the segment of approximately $25 million; and
Previous report
◦A decrease of approximately $16 million in restructuring charges related to reductions in the Company's workforce; and
Previous report
◦A decrease of approximately $8 million in annual incentive compensation. These decreases were offset in part by:
Previous report
◦An increase of $12 million in non-cash intangible impairment charges as compared to the prior year; and
Previous report
•Gross margin increased by $4.5 million, primarily driven by the higher sales volume discussed above. This increase was offset by a 60 basis point decline in gross margin percentage, which was mainly attributable to the following factors:
Previous report
◦Unfavorable product mix reduced margin by approximately 40 basis points; and
Previous report
◦Higher tariff-related costs led to a 30 basis point decline in gross margin; and
Previous report
◦Increased commodity and product distribution costs further reduced margin by 30 basis points; and
Previous report
◦Higher labor costs and loss of fixed cost leverage due to reduced production volumes in the first part of the year contributed an additional 30 basis point decrease in gross margin. These negative impacts were partially offset by:
Previous report
◦Incremental list price increases, net of contract price discounting, which improved gross margin by approximately 70 basis points.
Previous report
Net sales increased 2.2%, or 2.7%(*) on an organic basis, from the prior year due to:
Previous report
•Increased sales volume within the segment of approximately $28 million; offset in part by
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Reworded paragraphs (58)
Previous wording
You should read the issues discussed in Management's Discussion and Analysis 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.
Current wording
This 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.
Previous wording
•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, Geiger, HAY, Holly Hunt, Maharam, Muuto, 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.
Current wording
•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, Design Within Reach, Edelman, FilzFelt, Geiger, HAY, Holly Hunt, Maharam, Muuto, NaughtOne and Spinneybeck 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.
Previous wording
•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 concepts 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.
Current wording
•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 concept 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.
Previous wording
In retail, we are working to evolve and enhance the Design Within Reach 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 customers making it easier for them to incorporate our products in their client projects.
Current wording
In retail, we are working to evolve and enhance the DWR experience. We are expanding the retail footprint of both our DWR 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 customers, making it easier for them to incorporate our products in their client projects.
Previous wording
Our collective of dynamic brands are united in their commitment to our purpose, design for the good of humankind, and they offer 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.
Current wording
Our collective of dynamic brands is united in its commitment to our purpose - design for the good of humankind - and offers 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.
Previous wording
•Net sales were $3,669.9 million, representing an increase of 1.1% when compared to the prior year. Growth was primarily driven by increased sales volumes in the North America Contract and International Contract segments, along with the positive impact of pricing actions. These drivers more than offset sales declines due to unfavorable foreign currency translation, the strategic closure of the HAY eCommerce channel in North America and sales volume declines in the Global Retail segment. On an organic basis, net sales were $3,676.1 million(*), representing an increase of 1.6% when compared to the prior year.
Current wording
•Net sales were $3,841.7 million, representing an increase of 4.7% when compared to the prior year. Growth was primarily driven by increased sales volumes across all segments, along with the positive impact of pricing actions and favorable foreign currency translation. On an organic basis, net sales were $3,800.4 million(*), representing an increase of 3.6% when compared to the prior year.
Previous wording
•The effective tax rate was negative 53.1% for fiscal 2025 compared to 14.8% for the prior year.
Current wording
•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.
Previous wording
•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.
Current wording
•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.
Previous wording
•The International Contract segment reported a net sales increase of 2.2% and an organic sales increase of 2.7%() year-over-year. Operating margin increased 10 basis points year-over-year and decreased 10 basis points on an adjusted basis().
Current wording
•The North America Contract segment reported a net sales increase of 4.9% and an organic sales increase of 4.8%() year-over-year. Operating margin increased 280 basis points year-over year and 60 basis points on an adjusted basis().
Previous wording
•The Global Retail segment reported a net sales decrease of 1.5% and an organic sales decrease of 0.3%() year-over-year. Operating margin decreased 1,110 basis points year-over year and 110 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.
Current wording
•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.
Previous wording
This presentation 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.
Current wording
This report 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.
Previous wording
The non-GAAP financial measures referenced within this presentation include: Adjusted Earnings per Share, Adjusted Operating Earnings (Loss), Adjusted Operating Margin and Organic Growth (Decline).
Current wording
The non-GAAP financial measures referenced within this report include: Adjusted Earnings per Share - Diluted, Adjusted Operating Earnings (Loss), Adjusted Operating Margin and Organic Growth (Decline).
Previous wording
Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, impairment charges, Knoll pension plan termination charges and the related tax effect of these adjustments. These adjustments are described further below.
Current wording
Adjusted Earnings per Share - 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 charges, CEO transition costs, and the related tax effect of these adjustments.
Previous wording
Adjusted Operating Earnings (Loss) represents reported operating earnings plus integration charges, amortization of Knoll purchased intangibles, restructuring expenses, impairment charges and Knoll pension plan termination charges. These adjustments are described further below.
Current wording
Adjusted Operating Earnings (Loss) represents reported operating earnings less integration charges, amortization of Knoll purchased intangibles, restructuring expenses, impairment charges, Knoll pension plan termination charges, and CEO transition costs.
Previous wording
Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects and the impact of the closure of the North America HAY eCommerce channel in the Global Retail segment.
Current wording
Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects.
Previous wording
•Restructuring charges: Includes costs associated with actions involving targeted workforce reductions.
Current wording
•Restructuring charges: Includes costs associated with actions involving targeted workforce reductions, facility consolidation charges, and accelerated depreciation of fixed assets.
Previous wording
•Impairment charges: Includes non-cash, pre-tax charges for the impairment of the Knoll and Muuto trade names as well as impairment of goodwill attributed to the Global Retail and Holly Hunt reporting units.
Current wording
•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.
Previous wording
•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.
Current wording
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.
Previous wording
The following table reconciles Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment for the years ended as indicated below (in millions):
Current wording
The following table reconciles Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment and on a consolidated basis for MillerKnoll, Inc. for the periods ended as indicated below (in millions):
Previous wording
Net sales for fiscal 2025 increased $42 million, or 1.1% compared to the prior year. This increase was primarily driven by the following factors:
Current wording
Net sales for fiscal 2026 increased $172 million, or 4.7% compared to the prior year. This increase was primarily driven by the following factors:
Previous wording
Operating expenses increased by $120 million or 9.6% compared to the prior year fiscal period. The current period reflects the following key changes compared to the prior year:
Current wording
Operating expenses decreased by $82 million or 5.9% compared to the prior year fiscal period. The following factors contributed to the change:
Previous wording
The business is comprised of various operating segments as defined by U.S. GAAP. These operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions.
Current wording
The business is composed of various operating segments as defined by generally accepted accounting principles in the United States. These operating segments are determined on the basis of how the Company internally reports and how the chief operating decision maker ("CODM") evaluates financial information used to make operating decisions.
Previous wording
•Increased gross margin of $7.7 million due to the increase in sales explained above and an increase in gross margin percentage of 40 basis points. The increase in gross margin percentage was due primarily to:
Current wording
•Increased Gross margin of $51 million, driven by the higher sales volumes discussed above and an increase in gross margin percentage of 80 basis points. The increase in gross margin percentage was due primarily to:
Previous wording
•Decreased operating expenses of $9.7 million. The following factors contributed to the change:
Current wording
•Decreased operating expenses of $15 million. The following factors contributed to the change:
Previous wording
•Price increases, net of incremental discounting, of approximately $20 million. These increases were offset in part by:
Current wording
◦Decreased non-cash intangible impairment charges of approximately $20 million. These decreases were partially offset by:
Previous wording
Operating earnings increased $14.2 million, or 13.3% compared to the same period of the prior year due to:
Current wording
Operating earnings decreased $8 million, or 13.3%, compared to the prior year due to:
Previous wording
•Unfavorable foreign currency impact of approximately $6 million.
Current wording
◦Increased fixed and variable compensation costs of approximately $6 million.
Previous wording
•Decreased gross margin of $9.1 million due to the decrease in sales explained above and a decrease in gross margin percentage of 20 basis points. The decrease in gross margin percentage was due primarily to:
Current wording
•Increased gross margin of $2 million driven by the higher sales volumes explained above, partially offset by a decline in gross margin percentage of 50 basis points. The decrease in gross margin percentage was due primarily to:
Previous wording
•Unfavorable foreign currency translation of approximately $2 million.
Current wording
◦Foreign currency translation which contributed an unfavorable impact of approximately $2 million compared to the prior year.
Previous wording
Corporate unallocated expenses totaled $67.7 million for fiscal 2025, an increase of $15.6 million from fiscal 2024. The increase primarily related to higher stock based compensation expense.
Current wording
Corporate unallocated expenses totaled $68 million for fiscal 2026, an increase of $1 million from fiscal 2025. The increase primarily related to higher stock-based compensation expense.
Previous wording
The principal source of our operating cash flow is net earnings, meaning cash receipts from the sale of our products, net of costs to manufacture, distribute, and market our products. Net cash provided by operating activities for the twelve months ended May 31, 2025, totaled $209.3 million compared to $352.3 million in the twelve months ended June 1, 2024. The decrease in cash inflow is due primarily to a net increase in working capital. Our working capital consists primarily of receivables from customers, inventory, prepaid expenses, accounts payable, accrued compensation, and accrued other expenses. The following all affect these account balances:
Current wording
The principal source of our operating cash flow is net earnings, meaning cash receipts from the sale of our products, net of costs to manufacture, distribute, and market our products. Net cash provided by operating activities for the twelve months ended May 30, 2026, totaled $199.9 million compared to $209.3 million in the twelve months ended May 31, 2025. Working capital remained a use of cash in the current year and increased compared to the prior year. Our working capital consists primarily of receivables from customers, inventory, prepaid expenses, accounts payable, accrued compensation, and accrued other expenses. The following all affect these account balances:
Previous wording
Cash used in investing activities for the twelve months ended May 31, 2025, was $100.9 million, as compared to $86.3 million in the twelve months ended June 1, 2024. The increase in cash outflow in the current year was primarily due to:
Current wording
Cash used in investing activities for the twelve months ended May 30, 2026, was $115.6 million, as compared to $100.9 million in the twelve months ended May 31, 2025, primarily reflecting increased capital expenditures in the current year. Cash used in the prior year included $6.0 million of offsetting proceeds from the sale of a manufacturing facility located in Wisconsin.
Previous wording
Capital expenditures for the current year were $107.6 million as compared to $78.4 million in the prior year. At the end of the fiscal 2025, there were outstanding commitments for capital purchases of $69.2 million. The Company plans to fund these commitments with cash on hand and/or cash generated from operations. The Company expects capital spending in fiscal 2026 to be between $120 million and $130 million, which will be primarily related to investments in the Company's facilities, (including manufacturing, showrooms, and retail stores) and equipment as well as investments associated with achieving the Company's sustainability goals.
Current wording
Capital expenditures for the current year were $122.3 million as compared to $107.6 million in the prior year. At the end of fiscal 2026, there were outstanding commitments for capital purchases of $82.1 million. The Company plans to fund these commitments through a combination of cash on hand and cash generated from operations. The Company expects capital spending in fiscal 2027 to be between $125.0 million and $135.0 million, which will be primarily related to investments in the Company's facilities, (including manufacturing, showrooms, and retail stores) and equipment.
Previous wording
Cash used in financing activities for the twelve months ended May 31, 2025 was $150.3 million, compared to $258.8 million in the twelve months ended June 1, 2024. The decrease in cash used in the current year, compared to the prior year, was primarily due to:
Current wording
Cash used in financing activities for the twelve months ended May 30, 2026 was $117.0 million, compared to $150.3 million in the twelve months ended May 31, 2025. The decrease in cash used in the current year, compared to the prior year, was primarily due to:
Previous wording
•The Company repurchased 3,291,176 shares at a cost of $84.9 million in the current year as compared to 6,022,646 share repurchases totaling $138.2 million in the prior year; and
Current wording
•The Company repurchased 965,907 shares at a cost of $16.3 million in the current year as compared to 3,291,176 share repurchases totaling $84.9 million in the prior year.
Previous wording
•Net payments on the credit agreement of $61.7 million in the current year compared to net payments of $36.7 million in the prior year.
Current wording
•Net payments on the credit facility of $21.6 million in the current period compared to $61.7 million in the same period of the prior year.
Previous wording
The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors.
Current wording
The Company is closely managing spending levels, capital investments, and working capital. The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors.
Previous wording
Of the cash and cash equivalents noted above at the end of fiscal 2025, the Company had $182.7 million of cash and cash equivalents held outside the United States.
Current wording
Of the cash and cash equivalents noted above at the end of fiscal 2026, the Company had $161.7 million of cash and cash equivalents held outside the United States.
Previous wording
As of May 31, 2025, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $330.8 million with available borrowings against this facility of $382.2 million.
Current wording
As of May 30, 2026, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $309.2 million with available borrowings against this facility of $404.0 million.
Previous wording
The Company intends to repatriate $137.3 million of undistributed foreign earnings, all of which is held in cash in certain foreign jurisdictions. The Company has recorded a $3.5 million deferred tax liability related to foreign withholding taxes on these future dividends received in the U.S. from foreign subsidiaries. A significant portion of the $137.3 million of undistributed foreign earnings was previously taxed under the U.S. Tax Cut and Jobs Act (TCJA). The Company intends to remain indefinitely reinvested in the remaining undistributed earnings outside the U.S. which is estimated to be approximately $382.9 million on May 31, 2025.
Current wording
The Company intends to repatriate $119.9 million of undistributed foreign earnings, all of which is held in cash in certain foreign jurisdictions. The Company has recorded a $1.4 million deferred tax liability related to foreign withholding taxes on these future dividends received in the U.S. from foreign subsidiaries. A significant portion of the $119.9 million of undistributed foreign earnings was previously taxed under the U.S. Tax Cut and Jobs Act (TCJA). The Company intends to remain indefinitely reinvested in the remaining undistributed earnings outside the U.S. which is estimated to be approximately $377.8 million on May 30, 2026.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We continually review our accounting policies and financial information disclosures. These policies and disclosures are reviewed at least annually with the Audit Committee of the Board of Directors.
Current report — wording carried from elsewhere
In fiscal 2025, the Company performed quantitative assessments in testing the Knoll product brand and Muuto brand indefinite-lived intangible assets for impairment, which resulted in the carrying values of the trade names exceeding their fair values by $37.7 million, resulting in impairment charges.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
◦Increased acquisition related integration costs of approximately $2 million.
Previous report — wording carried elsewhere
•Increased capital expenditures in the current year; Offset in part by:
Previous report — wording carried elsewhere
•Cash proceeds of $6.0 million in the current period related to the sale of a manufacturing facility located in Wisconsin; and
Previous report — wording carried elsewhere
The Company has taken actions to safeguard its capital position in the current environment. The Company is closely managing spending levels, capital investments, and working capital.
Previous report — wording carried elsewhere
•assumed royalty rates that could be payable if we did not own the trademarks, and