MillerKnoll Inc. Reports First Quarter 2026 Fiscal Results

September 24, 2025  by Karen Parrish in Business Strategy, Industry   

First Quarter

- Net sales of $955.7 million, up 10.9% as reported and up 10.0% organically, year-over-year

- Orders of $885.4 million, down 5.4% as reported and down 6.2% organically, year-over-year, primarily as a result of order pull-forward in the fourth quarter of fiscal 2025 in the North America Contract segment

- Gross margin decreased 50 basis points, primarily from approximately $8.0 million of net tariff-related impact in the quarter, partially offset by the benefit of leverage on higher net sales

- Consolidated operating expenses decreased to $314.6 million

- Consolidated adjusted operating expenses increased to $308.0 million, driven primarily by higher fixed and variable compensation and increased variable expense from the higher sales volume

- Operating expense special charges of $6.6 million:

- $0.5 million of restructuring charges related to a facility consolidation

- $6.1 million of purchase accounting amortization

Debt extinguishment charges of $7.8 million related to the refinancing of our Term Loan B, which were recorded under Other expenses, net

Operating margin of 5.6%, compared to 1.8% in the prior year

Adjusted operating margin of 6.3%, compared to 5.8% in the prior year

First Quarter 2026 Cash Flow, Debt, and Liquidity

- Liquidity, as of August 30, 2025, of $480.5 million reflected cash on hand and Revolving Credit Facility availability

- Issued $550 million Term Loan B during the quarter, replacing our existing Term Loan B and extending the maturity date by four years to 2032

- Cash flow from operations of $9.4 million

- Net debt-to-EBITDA ratio, as defined by our Credit Facility, of 2.92x

- Near term scheduled debt maturities:

- $12.4 million in fiscal 2026

- $23.3 million in fiscal 2027

- $25.8 million in fiscal 2028

"We are pleased with our strong start to fiscal 2026, exceeding our expectations, and reflecting strong execution by our teams, improving conditions in several key markets, and continued progress on our strategic growth initiatives. Our first quarter performance demonstrates the ability of our business model to deliver revenue and earnings growth while maintaining balance sheet strength and navigating dynamic external pressures. As we look to the balance of our year, we are excited for the recently announced leadership changes on our Board of Directors and Executive team and the growth opportunities we have ahead," said Andi Owen, president and CEO. 

Second Quarter 2026 Outlook
The information below presents our expectations for the second quarter of fiscal 2026 financial operating results:

Q2 FY2026
Net Sales............................................... $926 million to $966 million
Gross margin %..................................... 37.6% to 38.6%
Adjusted operating expenses............... $300 million to $310 million
Interest and other expense, net............ $16.2 million to $17.2 million
Adjusted effective tax rate.................... 22.0% to 24.0%
Adjusted earnings per share – diluted... $0.38 to $0.44

- Above guidance ranges include estimated incremental costs related to tariffs (net of expected mitigation efforts) on our expected second quarter results, ranging between $2 million to $4 million before tax, and between $0.02 to $0.04 of net earnings per share.

- Our operating expense outlook reflects costs related to four new retail store openings in the second quarter of fiscal 2026.

- These estimates reflect the latest available information known to us as of the date of this release, including all known active tariffs.

Webcast and Conference Call Information

An online archive of the webcast will also be available on the Company's investor relations website. Additional links to materials supporting the release will be available at https://www.millerknoll.com/investor-relations.