MillerKnoll's FY25 Sales Up, Profitability Dips Amid Strategic Expansion

Ticker: MLKN · Form: DEF 14A · Filed: Aug 29, 2025 · CIK: 66382

Sentiment: mixed

Topics: Furniture, Retail Expansion, Profitability Decline, Strategic Growth, Corporate Governance, Executive Compensation, Shareholder Meeting

Related Tickers: MLKN

TL;DR

**MLKN is betting big on retail expansion and new markets, but declining margins and a loss per share mean investors should be cautious despite sales growth.**

AI Summary

MillerKnoll, Inc. (MLKN) concluded fiscal year 2025 with a diversified business model, achieving a 1.1% increase in reported net sales and a 1.6% increase on an organic basis. Despite sales growth, the company experienced a decline in profitability, with reported operating margin decreasing by 320 basis points to 1.4% and adjusted operating margin falling by 40 basis points to 6.8%. Net income saw a significant drop, resulting in a reported loss per share of $(0.54) compared to earnings per share of $1.11 in fiscal 2024. Adjusted earnings per share also decreased to $1.95 from $2.08. The gross margin declined by 30 basis points to 38.8% due to tariff actions and unfavorable product mix. MillerKnoll invested in strategic growth initiatives, opening new flagship showrooms in Chicago, London, and New York, and four new retail stores in the U.S. The company also expanded its product offerings in resilient sectors like healthcare and higher education, introducing the Gemma Collection for healthcare environments. For fiscal 2026, MillerKnoll plans to open an additional 10 to 15 new stores in the U.S. and increase eCommerce penetration, aiming to more than double its DWR and Herman Miller store footprint in North America.

Why It Matters

MillerKnoll's mixed fiscal 2025 results, with sales growth but declining profitability, signal a challenging environment for investors. The company's aggressive retail expansion, including 10-15 new stores planned for fiscal 2026, indicates a strong belief in future market recovery, particularly in the housing sector. For employees, the focus on new showrooms and product innovation in healthcare and higher education suggests job stability and growth opportunities in specialized design. Customers will benefit from enhanced retail experiences and a broader product portfolio, while competitors like Steelcase and Haworth will face increased pressure from MillerKnoll's expanded physical footprint and diversified offerings.

Risk Assessment

Risk Level: medium — MillerKnoll's reported operating margin declined by 320 basis points to 1.4% and reported loss per share was $(0.54) in fiscal 2025, a significant drop from $1.11 earnings per share in fiscal 2024. This indicates substantial pressure on profitability despite a 1.1% increase in net sales, suggesting that growth initiatives are not yet translating to bottom-line improvements and could be capital intensive.

Analyst Insight

Investors should closely monitor MillerKnoll's fiscal 2026 performance, particularly the impact of the planned 10-15 new store openings on both sales and profitability. Evaluate whether the strategic investments in retail expansion and new product categories like healthcare can reverse the trend of declining margins and return the company to positive reported earnings per share.

Financial Highlights

debt To Equity
N/A
revenue
N/A
operating Margin
1.4%
total Assets
N/A
total Debt
N/A
net Income
N/A
eps
$(0.54)
gross Margin
38.8%
cash Position
N/A
revenue Growth
+1.1%

Executive Compensation

NameTitleTotal Compensation
N/AN/AN/A

Key Numbers

Key Players & Entities

FAQ

What were MillerKnoll's net sales and profitability in fiscal year 2025?

MillerKnoll's reported net sales increased by 1.1% in fiscal year 2025. However, the company reported a loss per share of $(0.54), a significant decline from earnings per share of $1.11 in fiscal 2024. Reported operating margin also decreased by 320 basis points to 1.4%.

What strategic initiatives did MillerKnoll undertake in fiscal 2025 to drive growth?

In fiscal 2025, MillerKnoll opened new flagship showrooms in Chicago, London, and New York, and four new retail stores in the U.S. The company also expanded its product offerings in resilient sectors like healthcare with the Gemma Collection and higher education, and increased new retail product launches by 50%.

What are MillerKnoll's plans for retail expansion in fiscal 2026?

MillerKnoll plans to open an additional 10 to 15 new stores across the U.S. in fiscal 2026. This is part of a broader goal to more than double the footprint of its DWR and Herman Miller stores in North America over the next several years.

How did MillerKnoll's operating expenses change in fiscal 2025?

Reported operating expenses for MillerKnoll in fiscal 2025 were $1.37 billion, which was $119.8 million above the prior year. On an adjusted basis, operating expenses were $1.17 billion, $17.1 million below the prior year.

What factors contributed to the decline in MillerKnoll's gross margin?

MillerKnoll's gross margin declined by 30 basis points to 38.8% in fiscal 2025. This decline was primarily driven by the impact of tariff actions and unfavorable product and channel mix, which more than offset favorable margin impact from incremental pricing actions.

Who are the directors nominated for re-election at MillerKnoll's 2025 Annual Meeting?

The Board of Directors has nominated Lisa A. Kro, John T. Maeda, and Michael C. Smith for re-election to serve 3-year terms. These nominations were approved following the recommendation of the Governance and Corporate Responsibility Committee.

What proposals will shareholders vote on at the MillerKnoll Annual Meeting on October 13, 2025?

Shareholders will vote on four proposals: the election of three directors, an advisory vote to approve Named Executive Officer compensation, the ratification of KPMG LLP as the independent registered public accounting firm for fiscal 2026, and the approval of the MillerKnoll, Inc. 2025 Long-Term Incentive Plan.

How does MillerKnoll address corporate social responsibility?

MillerKnoll published its 2024 Better World Report, tracking performance in supporting its people, planet, and community. The company was recognized as one of the most community-minded companies in the U.S. through The Civic 50 by Points of Light, reflecting initiatives like its company-wide Day of Purpose, which inspired nearly 400 volunteer events in 2025.

What is the MillerKnoll 2025 Long-Term Incentive Plan?

The MillerKnoll, Inc. 2025 Long-Term Incentive Plan is an amendment and restatement of the existing 2023 plan, adopted by the Board and subject to shareholder approval. It is designed to provide incentives for long-term performance.

What is MillerKnoll's cash position and capital allocation in fiscal 2025?

MillerKnoll ended fiscal 2025 with a cash position of $193.7 million. The company reported a net operating cash inflow of $209.3 million, made capital expenditures totaling $107.6 million, and paid $51.7 million in dividends.

Industry Context

MillerKnoll operates in the office furniture and furnishings industry, which has seen shifts due to hybrid work models. The company is focusing on expanding its retail footprint and eCommerce penetration, particularly in resilient sectors like healthcare and higher education, to adapt to evolving market demands.

Regulatory Implications

As a publicly traded company, MillerKnoll is subject to SEC regulations, including the requirement to file proxy statements like the DEF 14A. Compliance with these regulations ensures transparency in executive compensation and corporate governance matters presented to shareholders.

What Investors Should Do

  1. Review Executive Compensation Details
  2. Evaluate Long-Term Incentive Plan
  3. Consider Audit Firm Ratification

Glossary

DEF 14A
A filing required by the U.S. Securities and Exchange Commission (SEC) by companies that are required to file with the SEC. It contains information about executive compensation, corporate governance, and other matters presented to shareholders for a vote. (This document provides the detailed information about MillerKnoll's executive compensation, proposals for shareholder votes, and other corporate governance aspects.)
CD&A
Compensation Discussion and Analysis. A section within proxy statements that explains a company's executive compensation philosophy, decisions, and how compensation is determined for its named executive officers. (This section (starting on page 20) details the rationale and structure behind MillerKnoll's executive compensation for fiscal year 2025.)
Basis points
A unit of measure used in finance to denote one-hundredth of one percent (0.01%). (Used to describe the magnitude of changes in margins, such as the 320 basis point decrease in operating margin and 30 basis point decrease in gross margin.)

Year-Over-Year Comparison

MillerKnoll reported a 1.1% increase in reported net sales for fiscal year 2025 compared to the prior year. However, profitability declined significantly, with reported operating margin decreasing by 320 basis points to 1.4% and reported net income resulting in a loss per share of $(0.54), a sharp contrast to the $1.11 earnings per share in fiscal 2024. Gross margin also saw a slight decrease of 30 basis points to 38.8%.

Filing Stats: 4,569 words · 18 min read · ~15 pages · Grade level 11.8 · Accepted 2025-08-29 16:05:31

Key Financial Figures

Filing Documents

Executive Compensation

Executive Compensation P PROPOSAL 2 - ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION 19 Compensation Discussion and Analysis 20 Executive Summary 20 Executive Officers Covered by this CD&A 20 Key Governance and Compensation Best Practices 21 Compensation Philosophy and Executive Compensation Program Overview 22 Role of Market Data and Compensation Peer Group 23 Roles and Responsibilities in Setting Executive Officer Compensation 24 Fiscal 202 5 Compensation Program 25 Compensation Program Changes for Fiscal 202 6 28 Associate Benefit Plans 28 Other Executive Plans and Perquisites 28 Stock Ownership Guidelines and Stock Retention Requirements 30 Anti-Hedging and Anti-Pledging Policy 30 Severance Policy and Change in Control Agreements 30 Deductibility of Compensation 31 Compensation Committee Report 32 Compensation Tables 33 Summary Compensation Table 33 Grants of Plan-Based Awards 34 Outstanding Equity Awards at Fiscal Year-End 35 Option Exercises and Stock Vested 37 Nonqualified Deferred Compensation 37 Potential Payments Upon Termination, Death, Disability, Retirement, or Change in Control 38 CEO Pay Ratio 41 Pay Versus Performance 42 Equity Compensation Plan Information 47 Audit Matters P PROPOSAL 3 - RATIFICATION OF AUDIT COMMITTEE ' S SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 48 Report of the Audit Committee 49 Other Corporate Governance P PROPOSAL 4 - APPROVE THE MILLERKNOLL, INC. 2025 LONG-TERM INCENTIVE PLAN 50 Certain Relationships and Related Party Transactions 55 Delinquent Section 16(A) Reports 55 General Information

Security Ownership

Security Ownership 56 Information About t he Annual Meeting and Voting 58 Shareholder Proposals for the 202 6 Annual Meeting 62 Other Matters 63 Appendices Appendix A: Reconciliation of Non-GAAP Financial Measures 64 Appendix B : MillerKnoll, Inc. 2025 Long-Term Incentive Plan 67 MillerKnoll Table of Contents BUSINESS OVERVIEW As a global leader of design, MillerKnoll and our collective of dynamic brands have led conversations on design for over 100 years, and we continue to drive our industry forward with visionary thinking and a purposeful approach. From the spaces we make that help us live and work better, to how we manufacture our products, to the ways we solve challenges facing our customers and global community, design is our tool for creating positive impact. Our optimism leads us as we redefine modern for the 21st century, and design a future that is more sustainable, caring, and beautiful for all people and our planet. 2025 Proxy Statement 1 Table of Contents FINANCIAL HIGHLIGHTS FROM FISCAL 2025 During fiscal year 2025, MillerKnoll focused on investing in opportunities to grow market share, and leveraging our design leadership to grow sales amid a dynamic macroeconomic environment. In 2025, MillerKnoll net sales increased 1.1% and 1.6% (1) on a reported and organic basis, respectively. Operating margin declined by 320 basis points and 40 basis points (1) on a reported and adjusted basis, respectively. Net sales within the North America Contract segment increased by 2.2% on a reported basis and 2.4% (1) on an organic basis. Our Global Retail segment saw a 1.5% reported and a 0.3% (1) organic net sales decline over the prior year. The International Contract segment net sales increased by 2.2% on a reported basis and 2.7% (1) organically. Gross margin of 38.8% represented a decline over the prior year of 30 basis points. Gross margin decline in the year was driven primarily by the impact of tariff actions and unfavorable pr

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