What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-03-30 compared with 2026-01-05 · 220 added, 205 removed, 256 unchanged (62% of the section changed)

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The Company's products are sold primarily through independent contract office furniture dealers, direct customer sales, owned and independent retailers and the Company’s eCommerce platforms.

The following is a summary of results for the three months ended November 29, 2025:

• Net sales were $955.2 million and orders were $972.5 million, representing a decrease of 1.6% and an increase of 5.5%, respectively, when compared to the same quarter of the prior year.

On an organic basis, which excludes the impact of foreign currency translation, Net sales were $946.5 million (*) and orders were $963.4 million (*) , representing an organic decrease of 2.5% (*) and an organic increase of 4.5% (*) , respectively, when compared to the same quarter of the prior year.

• Gross margin in the second quarter was 39.0%, an increase of 20 basis points when compared to the same quarter of the prior year, related primarily to the impact of favorable product and channel mix as well as the benefit from price increase actions, which more than offset cost pressures from tariffs and unfavorable leverage of fixed operations costs on lower sales volume.

• Operating expenses increased $9.2 million or 2.9% as compared to the same quarter of the prior year.

The increase was driven primarily from costs associated with the expansion of the retail store footprint in North America and increased fixed and variable compensation costs.

The following is a summary of results for the three months ended February 28, 2026:

• Net sales were $926.6 million and orders were $931.6 million, representing an increase of 5.8% and an increase of 9.2%, respectively, when compared to the same quarter of the prior year.

On an organic* basis, which excludes the impact of foreign currency translation, Net sales were $909.4 million and orders were $914.8 million, representing an organic* increase of 3.8% and an organic* increase of 7.2%, respectively, when compared to the same quarter of the prior year.

• Gross margin in the third quarter was 38.1%, an increase of 20 basis points when compared to the same quarter of the prior year, related primarily to the impact of favorable leverage on fixed costs on higher sales volumes as well as favorable channel and product mix.

• Operating expenses decreased $106.6 million or 25.7% as compared to the same quarter of the prior year.

The decrease was driven primarily from the impact of non-cash impairment charges in the prior year.

This decrease was partially offset by an increase in fixed and variable compensation costs and incremental costs related to the expanded retail store footprint.

• The effective tax rate was 19.2% compared to 88.3% for the same quarter of the prior year.

The change as compared to the prior year resulted primarily from the level of net income or net loss in the periods as well as the impact of discrete items in each of the periods.

• Diluted earnings per share in the quarter was $0.35 as compared to $0.49 in the prior year.

Adjusted diluted earnings per share was $0.43 (*) , a 21.8% (*) decrease as compared to the prior year quarter.

The change compared to the prior year relates primarily to the discrete tax impacts of the impairments recorded in the prior year.

• Diluted earnings per share in the quarter was $0.34 compared to a loss of $0.19 in the prior year.

Adjusted diluted earnings per share* was $0.43, a 2.3% decrease compared to the prior year quarter.

(*) Non-GAAP measurements;

see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures."

A comparison of Net sales and orders during the second quarter to the prior year quarter by segment is as follows:

• The North America Contract segment in the second quarter reported Net sales totaling $508.5 million, down 3.1% compared to the prior year period on a reported and organic basis.

North America Contract had new orders of $506.8 million, which represents an increase of 4.8% from the prior year on both a reported and organic basis.

• The International Contract segment delivered Net sales in the second quarter of $170.9 million, a decrease of 6.3% from the year-ago period on a reported basis and a decrease of 9.2% (*) organically.

New orders in this segment totaled $162.0 million, representing a year-over-year increase of 6.6% on a reported basis and an increase of 3.4% (*) organically.

• Net sales in the second quarter for the Global Retail segment totaled $275.8 million, an increase of 4.7% over the same quarter last year on a reported basis and an increase of 3.4% (*) organically.

A comparison of Net sales and orders during the third quarter to the prior year quarter by segment is as follows:

• The North America Contract segment in the third quarter reported Net sales totaling $488.6 million, an increase of 4.4% compared to the prior year period on a reported basis and 4.1% on an organic* basis.

North America Contract had orders of $490.9 million, which represents an increase of 13.1% from the prior year on a reported basis and 12.8% on an organic* basis.

• The International Contract segment delivered Net sales in the third quarter of $156.9 million, an increase of 7.8% compared to the prior year period on a reported basis and an increase of 1.9% organically*.

Orders in the segment totaled $160.3 million, representing a year-over-year increase of 0.7% on a reported basis and a decrease of 4.3% organically*.

• Net sales in the third quarter for the Global Retail segment totaled $281.1 million, an increase of 7.1% over the same quarter last year on a reported basis and an increase of 4.4% organically*.

Orders in the quarter totaled $280.4 million, up 7.9% compared to the same period last year on a reported basis and up 5.1% organically*.

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The fiscal year ending May 30, 2026 ("fiscal 2026") and the fiscal year ended May 31, 2025 ("fiscal 2025") both contain 52 weeks.

The remaining sections within Item 2 include additional analysis of the three and six months ended November 29, 2025, including discussion of significant variances compared to the prior year periods.

The remaining sections within Item 2 include additional analysis of the three and nine months ended February 28, 2026, including discussion of significant variances compared to the prior year periods.

Reconciliation of Non-GAAP Financial Measures

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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.

The Company's presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items.

The Company compensates 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 report.

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The non-GAAP financial measures referenced within this report include:

Adjusted Earnings per Share and Organic Growth (Decline).

Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, Knoll pension plan termination charges, debt extinguishment charges and the related tax effect of these adjustments.

Adjusted Earnings per Share - Diluted and Organic Growth (Decline).

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 and the related tax effect of these adjustments.

These adjustments are described further below.

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• Integration charges:

Knoll integration-related costs include severance, asset impairment charges associated with lease and operations facility consolidation activity, and expenses related to synergy realization efforts and reorganization initiatives.

Includes Knoll integration-related costs which include severance, asset impairment charges associated with lease and operations facility consolidation activity, and expenses related to synergy realization efforts and reorganization initiatives.

• Restructuring charges:

Includes costs associated with actions involving targeted workforce reductions, facility consolidation charges, and accelerated depreciation of fixed assets.

• 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.

• Knoll pension plan termination charges:

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• 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.

Includes 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.

The following tables reconcile Net sales to Net sales, organic for the periods ended as indicated below:

Three Months Ended

November 29, 2025

February 28, 2026

North America Contract International Contract Global Retail Total

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Net sales, organic $ 487.2 $ 148.2 $ 274.0 $ 909.4

% change from PY (3.1) % (9.2) % 3.4 % (2.5) %

Organic Growth 4.1 % 1.9 % 4.4 % 3.8 %

Three Months Ended

November 30, 2024

March 1, 2025

North America Contract International Contract Global Retail Total

Net sales, as reported $ 468.2 $ 145.5 $ 262.5 $ 876.2

(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period.

Six Months Ended

November 29, 2025

(1) Currency translation effects represent the estimated net impact of translating current period sales using the average exchange rates applicable to the comparable prior year period.

Nine Months Ended

February 28, 2026

North America Contract International Contract Global Retail Total

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Net sales, organic $ 1,529.5 $ 476.8 $ 797.0 $ 2,803.3

% change from PY 4.1 % (0.1) % 4.1 % 3.4 %

Six Months Ended

November 30, 2024

Organic Growth 4.1 % 0.5 % 4.2 % 3.5 %

Nine Months Ended

March 1, 2025

North America Contract International Contract Global Retail Total

Net sales, as reported $ 1,469.1 $ 474.3 $ 764.7 $ 2,708.1

(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period

(1) Currency translation effects represent the estimated net impact of translating current period sales and using the average exchange rates applicable to the comparable prior year period

The following tables reconcile orders as reported to organic orders for the periods ended as indicated below:

Three Months Ended

November 29, 2025

February 28, 2026

North America Contract International Contract Global Retail Total

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Orders, organic $ 489.4 $ 152.3 $ 273.1 $ 914.8

% change from PY 4.8 % 3.4 % 4.5 % 4.5 %

Organic Growth (Decline) 12.8 % (4.3) % 5.1 % 7.2 %

Three Months Ended

November 30, 2024

March 1, 2025

North America Contract International Contract Global Retail Total

Orders, as reported $ 434.0 $ 159.2 $ 259.9 $ 853.1

(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period.

Six Months Ended

November 29, 2025

(1) Currency translation effects represent the estimated net impact of translating current period orders using the average exchange rates applicable to the comparable prior year period.

Nine Months Ended

February 28, 2026

North America Contract International Contract Global Retail Total

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Orders, organic $ 1,488.3 $ 459.4 $ 808.0 $ 2,755.7

% change from PY (2.0) % (3.2) % 2.6 % (0.9) %

Six Months Ended

November 30, 2024

Organic Growth (Decline) 2.4 % (3.6) % 3.4 % 1.7 %

Nine Months Ended

March 1, 2025

North America Contract International Contract Global Retail Total

Orders, as reported $ 1,453.4 $ 476.4 $ 781.1 $ 2,710.9

(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period.

(1) Currency translation effects represent the estimated net impact of translating current period orders using the average exchange rates applicable to the comparable prior year period.

The following table reconciles earnings per share - diluted to adjusted earnings per share - diluted for the periods ended as indicated below:

Three Months Ended Six Months Ended

November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024

Earnings per share - diluted $ 0.35 $ 0.49 $ 0.64 $ 0.47

Three Months Ended Nine Months Ended

February 28, 2026 March 1, 2025 February 28, 2026 March 1, 2025

Earnings (loss) per share - diluted $ 0.34 $ (0.19) $ 0.98 $ 0.29

Amortization of Knoll purchased intangibles 0.09 0.09 0.26 0.25

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Restructuring charges 0.03 0.06 0.06 0.06

Impairment charges — 1.91 — 1.85

Debt extinguishment charges — — 0.12 —

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Key Highlights

The following table presents certain key highlights from the results of operations for the three and six months ended:

Three Months Ended Six Months Ended

(In millions, except share data) November 29, 2025 November 30, 2024 % Change November 29, 2025 November 30, 2024 % Change

The following table presents certain key highlights from the results of operations for the three and nine months ended:

Three Months Ended Nine Months Ended

(In millions, except share data)

February 28, 2026 March 1, 2025 % Change February 28, 2026 March 1, 2025 % Change

Net sales $ 926.6 $ 876.2 5.8 % $ 2,837.5 $ 2,708.1 4.8 %

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Operating expenses 308.0 414.6 (25.7) % 946.3 1,050.2 (9.9) %

Operating earnings 48.5 62.5 (22.4) % 102.0 77.7 31.3 %

Operating earnings (loss) 44.9 (82.2) 154.6 % 146.9 (4.5) 3,364.4 %

Other expenses, net 15.7 18.6 (15.6) % 56.5 53.1 6.4 %

Earnings before income taxes and equity income 32.5 44.9 (27.6) % 61.2 43.2 41.7 %

Income tax expense 7.3 9.8 (25.5) % 14.9 8.7 71.3 %

Equity earnings (loss) from nonconsolidated affiliates, net of tax — 0.1 (100.0) % — 0.2 (100.0) %

Net earnings 25.2 35.2 (28.4) % 46.3 34.7 33.4 %

Earnings (loss) before income taxes and equity income 29.2 (100.8) 129.0 % 90.4 (57.6) 256.9 %

Income tax expense (benefit) 5.6 (89.0) 106.3 % 20.5 (80.3) 125.5 %

Equity earnings from nonconsolidated affiliates, net of tax 0.9 0.1 800.0 % 0.9 0.3 200.0 %

Net earnings (loss) 24.5 (11.7) 309.4 % 70.8 23.0 207.8 %

Net earnings attributable to redeemable noncontrolling interests 1.0 1.0 — % 2.9 2.8 3.6 %

Net earnings attributable to MillerKnoll, Inc.

Net earnings (loss) attributable to MillerKnoll, Inc.

$ 23.5 $ (12.7) 285.0 % $ 67.9 $ 20.2 236.1 %

Earnings per share - basic $ 0.35 $ 0.49 (28.6) % $ 0.65 $ 0.47 38.3 %

Earnings (loss) per share - basic $ 0.34 $ (0.19) 278.9 % $ 0.99 $ 0.29 241.4 %

Earnings (loss) per share - diluted

$ 0.34 $ (0.19) 278.9 % $ 0.98 $ 0.29 237.9 %

Orders $ 931.6 $ 853.1 9.2 % $ 2,789.5 $ 2,710.9 2.9 %

Backlog $ 711.6 $ 686.4 3.7 %

The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) as a percentage of Net sales, for the three and six months ended:

Three Months Ended Six Months Ended

November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024

Net sales 100.0 % 100.0 % 100.0 % 100.0 %

The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) as a percentage of Net sales, for the three and nine months ended:

Three Months Ended

Nine Months Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Cost of sales

Gross margin 39.0 % 38.8 % 38.7 % 38.9 %

Operating expenses

Operating earnings 5.1 % 6.4 % 5.3 % 4.2 %

Operating earnings (loss)

Other expenses, net

Earnings before income taxes and equity income 3.4 % 4.6 % 3.2 % 2.4 %

Income tax expense 0.8 % 1.0 % 0.8 % 0.5 %

Equity earnings (loss) from nonconsolidated affiliates, net of tax — % — % — % — %

Net earnings 2.6 % 3.6 % 2.4 % 1.9 %

Earnings (loss) before income taxes and equity income

Income tax expense (benefit)

Equity earnings from nonconsolidated affiliates, net of tax

Net earnings (loss)

Net earnings attributable to redeemable noncontrolling interests

Net earnings attributable to MillerKnoll, Inc.

2.5 % 3.5 % 2.3 % 1.8 %

The following chart presents graphically the primary drivers of the year-over-year change in Net sales for the three and six months ended November 29, 2025.

Net earnings (loss) attributable to MillerKnoll, Inc.

The following chart presents graphically the primary drivers of the year-over-year change in Net sales for the three and nine months ended February 28, 2026.

The amounts presented in the graph are expressed in millions and have been rounded.

Net sales decreased $15.2 million or 1.6% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025.

The decrease was primarily driven by:

• Decreased sales volumes in the North America Contract and International Contract segments contributed approximately $37 million and $13 million, respectively.

These decreases were partially offset by:

Net sales increased $50.4 million or 5.8% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025.

The increase was primarily driven by:

• Price increases, net of discounting, which positively impacted net sales by approximately $23 million.

This includes the favorable impact of pricing actions taken to help offset tariff cost pressures.

• Favorable foreign currency translation, which increased net sales by approximately $17 million.

• Increased sales volumes in the Global Retail segment increased net sales by $7 million.

Net sales increased $79.0 million or 4.3% in the first six months of fiscal 2026 compared to the first six months of fiscal 2025.

• Increased sales volumes in the Global Retail, International Contract, and North America Contract segments contributed approximately $5 million, $4 million, and $2 million, respectively.

Net sales increased $129.4 million or 4.8% in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025.

The following items contributed to the change:

• Price increases, net of discounting, which positively impacted net sales by approximately $42 million.

This includes the favorable impact of pricing actions taken to help offset tariff cost pressures.

• Increased sales volumes in the North America Contract, Global Retail and International Contract segments contributed approximately $17 million, $15 million and $9 million, respectively.

• Favorable foreign currency translation, which increased net sales by approximately $34 million.

Gross margin was 39.0% in the second quarter of fiscal 2026 as compared to 38.8% in the second quarter of fiscal 2025.

The year-over-year change in gross margin percentage was primarily driven by the following factors:

• Favorable channel and product mix positively impacted margin by approximately 90 basis points.

• The impact of incremental list price increases, net of contract price discounting, and excluding tariff-based pricing actions, increased gross margin percentage by 50 basis points.

These increases were partially offset by:

• Tariff-related costs, net of pricing actions taken to help offset costs, adversely impacted gross margin by approximately 70 basis points.

• Unfavorable leverage on fixed costs due to lower sales volumes negatively impacted margin by 50 basis points.

Gross margin was 38.7% in the six months ended November 29, 2025, as compared to 38.9% for the same period in the prior fiscal year.

• Increased sales volumes in the Global Retail, North America Contract and International Contract segments contributed approximately $23 million, $23 million and $8 million, respectively.

Gross margin was 38.1% in the third quarter of fiscal 2026, compared to 37.9% in the third quarter of fiscal 2025.

The year-over-year change in gross margin percentage was primarily driven by:

• Favorable leverage on fixed costs due to higher sales volumes and operational efficiency which positively impacted margin.

Gross margin was 38.5% in the nine months ended February 28, 2026, compared to 38.6% for the same period in the prior fiscal year.

The following factors summarize the major drivers of the year-over-year change in gross margin percentage:

• Tariff-related costs, net of pricing actions taken to help offset costs, adversely impacted gross margin by approximately 110 basis points.

This increase was partially offset by:

• The impact of incremental list price increases, net of contract price discounting and excluding tariff specific pricing actions, increased gross margin percentage by 50 basis points.

• Favorable channel and product mix which positively impacted margin by approximately 40 basis points.

• Favorable channel and product mix and the impact of incremental list price increases, net of contract price discounting which positively impacted margin.

• Favorable leverage on fixed costs due to higher sales volumes which positively impacted margin.

• These increases were more than offset by tariff-related costs, net of pricing actions taken to help offset costs, incurred in the first half of the year that adversely impacted gross margin.

Operating Expenses

The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses for the three and six months ended November 29, 2025.

The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses for the three and nine months ended February 28, 2026.

The amounts presented in the graphs are expressed in millions and have been rounded.

Operating expenses increased by $9.2 million or 2.9% in the second quarter of fiscal 2026 compared to the prior year period.

Operating expenses decreased by $106.6 million or 25.7% in the third quarter of fiscal 2026 compared to the prior year period.

The following factors contributed to the change:

• Incremental costs of $4 million associated with the expansion of our retail store footprint.

• 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.

This decrease was offset in part by:

• Increased fixed and variable compensation costs of approximately $14 million.

• Variable selling costs, including sales-based commissions and royalty expenses which rose by approximately $1 million compared to the prior year period.

Operating expenses increased by $2.7 million or 0.4% in the first six months of fiscal 2026 compared to the first six months of fiscal 2025.

• Incremental costs of $4 million associated with the impact from opening new stores.

• Unfavorable foreign currency translation of $4 million as compared to the prior year period.

• Variable selling costs which rose by approximately $1 million compared to the prior year period.

Operating expenses decreased by $103.9 million or 9.9% in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025.

The following factors contributed to the change:

• Acquisition-related integration charges which totaled approximately $28 million that occurred in the prior year.

These decreases were offset in part by:

◦ Increased fixed and variable compensation costs of approximately $27 million.

◦ Incremental costs of $11 million associated with the impact from opening new stores.

◦ Variable selling costs, including sales-based commissions and royalty expenses which rose by approximately $10 million compared to the prior year period.

• Incremental costs of $7 million associated with the expansion of our retail store footprint.

◦ Foreign currency translation also contributed an increase in operating expenses of approximately $6 million relative to the prior year.

• These increases were partially offset by a reduction in acquisition-related integration charges and restructuring charges, which totaled approximately $28 million.

Other Income/Expense

During the three months ended November 29, 2025, net Other expense was $16.0 million, representing a decrease of $1.6 million compared to the same period in the prior year.

The change was primarily driven by lower interest expense of $2.5 million resulting from reduced debt levels, partially offset by a decrease in interest income of $0.8 million.

During the six months ended November 29, 2025, net Other expense was $40.8 million, representing an increase of $6.3 million compared to the same period in the prior year.

The change was primarily driven by a loss on extinguishment of debt of approximately $7.8 million incurred in connection with the refinancing of term loan debt during the current year, offset in part by lower interest expense resulting from reduced debt levels.

During the three months ended February 28, 2026, net Other expense was $15.7 million, representing a decrease of $2.9 million compared to the same period in the prior year.

The change was primarily driven by lower interest expense of $1.9 million resulting from reduced debt levels and increased interest and investment income in the period ended February 28, 2026 compared to the same period in the prior year.

During the nine months ended February 28, 2026, net Other expense was $56.5 million, representing an increase of $3.4 million compared to the same period in the prior year.

The change was primarily driven by a loss on extinguishment of debt of approximately $8.0 million incurred in connection with the refinancing of term loan debt during the current year, partially offset by lower interest expense resulting from reduced debt levels.

See Note 9 of the Condensed Consolidated Financial Statements for additional information.

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The business is comprised 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 evaluates financial information used to make operating decisions.

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.

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.

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For descriptions of each segment, refer to Note 14 of the Condensed Consolidated Financial Statements.

The charts below present the relative mix of net sales and operating earnings across each of the Company's segments during the three and six month periods ended November 29, 2025.

The charts below present the relative mix of net sales and operating earnings across each of the Company's segments during the three and nine month periods ended February 28, 2026.

This is followed by a discussion of the Company's results, by reportable segment.

1 unchanged sentence

North America Contract

Three Months Ended Six Months Ended

(Dollars in millions) November 29, 2025 November 30, 2024 Change November 29, 2025 November 30, 2024 Change

Net sales $ 508.5 $ 524.7 $ (16.2) $ 1,042.4 $ 1,000.9 $ 41.5

Gross margin 185.8 189.9 (4.1) 381.8 361.6 20.2

Three Months Ended

Nine Months Ended

(Dollars in millions)

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Gross margin %

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Operating earnings %

For the three month comparative period, Net sales decreased 3.1% (*) on both a reported and organic basis compared to the prior year period due to:

• Decreased sales volumes within the segment, contributing approximately $37 million to the decrease;

offset in part by

For the three month comparative period, Net sales increased 4.4%, or 4.1% on an organic* basis, compared to the prior year period due to:

• Price increases, net of discounting positively impacted net sales by approximately $17 million.

This includes the favorable impact of tariff-related pricing actions.

For the six month comparative period, Net sales increased 4.1% (*) on both a reported and an organic basis compared to the prior year period.

• Increased sales volumes within the segment, contributed approximately $2 million to the increase.

• Favorable foreign currency translation, which increased net sales by approximately $1 million.

For the nine month comparative period, Net sales increased 4.2%, or 4.1% on an organic* basis, compared to the prior year period.

This growth was primarily driven by:

• Price increases, net of discounting positively impacted net sales by approximately $38 million.

This includes the favorable impact of tariff-related pricing actions.

• Increased sales volumes within the segment, contributing approximately $17 million to the increase;

For the three month comparative period, operating earnings decreased $5.5 million, or 11.1%, over the prior year period due to:

• Decreased Gross margin of $4.1 million due to the decrease in sales noted above offset by an increase in gross margin percentage of 30 basis points.

• Increased sales volumes within the segment, contributing approximately $23 million.

• Favorable foreign currency translation, which increased net sales by approximately $1 million.

For the three month comparative period, operating earnings increased $24.9 million, or 146.5%, over the prior year period due to:

• Increased Gross margin of $14.4 million due to the increase in sales noted and an increase in gross margin percentage of 150 basis points.

The increase in gross margin percentage was due primarily to:

◦ Price increases, net of discounting resulted in a positive impact of approximately 130 basis points.

◦ Favorable product mix which increased margin by 60 basis points.

Offset in part by:

◦ Loss of leverage on fixed costs due to lower sales volumes, which contributed approximately 80 basis points to gross margin decline.

◦ Tariff-related costs, which more than offset pricing actions taken to help offset tariffs.

The net impact of tariffs in the quarter as compared to the prior year adversely impacted gross margin by approximately 50 basis points.

◦ Increased freight and product distribution costs increased margin by approximately 30 basis points.

• Increased Operating expenses of $1 million driven primarily by restructuring charges associated with facility consolidation initiatives and elevated compensation and benefit expenses.

For the six month comparative period, operating earnings increased $35.3 million, or 53.8%, over the prior year period due to:

◦ Fa vorable product mix and operational efficiency which increased margin .

◦ Price increases, net of discounting resulted in a positive impact to margin.

◦ Favorable leverage on fixed costs due to increased sales volumes contributed to gross margin improvement.

• Decreased Operating expenses of $10.5 million.

The following factors contributed to the change:

◦ Decreased non-cash intangible impairment charges of approximately $20 million as compared to the prior year.

This decrease was offset in part by:

◦ Elevated compensation and benefit expenses of approximately $7 million in the current year period.

◦ Variable selling costs which rose by approximately $2 million compared to the prior year period.

For the nine month comparative period, operating earnings increased $60.2 million, or 72.9%, over the prior year period due to:

• Increased Gross margin of $34.6 million due to the increase in sales discussed above and an increase in gross margin percentage of 80 basis points.

The increase in gross margin percentage was due primarily to:

◦ The impact of incremental list price increases, net of contract price discounting, that increased gross margin percentage by approximately 70 basis points.

◦ Favorable leverage of fixed costs due to increased production volumes as well as favorable product mix which had a positive impact on margin of approximately 50 basis points.

◦ Reduced freight and distribution charges positively impacted margin by 20 basis points.

These changes were offset in part by:

◦ Tariff-related costs, which more than offset pricing actions taken to help offset tariffs.

The net impact of tariffs in the current period as compared to the prior year adversely impacted gross margin by approximately 90 basis points.

◦ Favorable product mix and operational efficiency which increased margin.

◦ Price increases, net of discounting resulted in a positive impact to margin.

◦ Favorable leverage on fixed costs due to increased sales volumes contributed to gross margin improvement.

◦ These increases were partially offset by tariff-related costs, net of pricing actions taken to help offset costs, incurred in the first half of the year that adversely impacted gross margin.

• Decreased Operating expenses of $25.6 million.

1 unchanged sentence

◦ A reduction in acquisition-related integration charges, which totaled approximately $ 25 million.

This benefit was partially offset by:

◦ Decreased non-cash intangible impairment charges of approximately $20 million.

These decreases were partially offset by:

◦ Increased variable selling costs, including sales-based commissions and royalty expenses of approximately $9 million.

◦ Increase of $2 million driven primarily by restructuring charges associated with facility consolidation initiatives.

◦ Increased compensation and benefits of approximately $9 million.

◦ Increase of approximately $1 million driven primarily by restructuring charges associated with facility consolidation initiatives.

(*) Non-GAAP measurements;

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International Contract

Three Months Ended Six Months Ended

(Dollars in millions) November 29, 2025 November 30, 2024 Change November 29, 2025 November 30, 2024 Change

Net sales $ 170.9 $ 182.4 $ (11.5) $ 338.4 $ 328.8 $ 9.6

Gross margin 61.9 66.5 (4.6) 121.1 120.4 0.7

Three Months Ended

Nine Months Ended

(Dollars in millions)

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Gross margin %

1 unchanged sentence

Operating earnings %

For the three month comparative period, Net sales decreased 6.3%, or 9.2% (*) on an organic basis, over the prior year period due to:

• Decreased sales volumes within the segment, contributing approximately $13 million to the decrease.

• Incremental discounting attributable to regional sales mix, net of price increases, which adversely impacted net sales by approximately $4 million.

• These decreases were partially offset by favorable foreign currency translation, which increased net sales by approximately $5 million.

For the six month comparative period, Net sales increased 2.9% and decreased 0.1% (*) on an organic basis compared to the prior year period.

For the three month comparative period, Net sales increased 7.8%, or 1.9% on an organic* basis, over the prior year period due to:

• Favorable foreign currency translation, which increased net sales by approximately $8 million.

• Increased sales volumes within the segment, contributing approximately $4 million to the increase.

• These increases were partially offset by incremental discounting attributable to product mix, net of price increases, which adversely impacted net sales by approximately $1 million.

For the nine month comparative period, Net sales increased 4.4% or 0.5% on an organic* basis compared to the prior year period.

This growth was primarily driven by:

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• Higher sales volumes within the segment, contributing approximately $8 million to the increase.

• These gains were partially offset by incremental discounting attributable to regional and product sales mix, net of price increases, which adversely impacted net sales by approximately $9 million.

For the three month comparative period, operating earnings decreased $6.3 million or 28.4%, over the prior year period due to:

• Decreased Gross margin of $4.6 million driven by the lower sales volumes explained above and a decline in gross margin percentage of 30 basis points.

• These increases were partially offset by incremental discounting attributable to regional and product sales mix, net of price increases, which adversely impacted net sales by approximately $5 million.

For the three month comparative period, operating earnings increased $2.2 million or 22.2%, over the prior year period due to:

• Increased Gross margin of $3.3 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:

◦ Tariff-related costs adversely impacted gross margin by approximately 70 basis points.

◦ Unfavorable foreign currency translation further reduced margin by approximately 40 basis points.

◦ These pressures were partially offset by favorable product material performance which contributed approximately 80 basis points to margin improvement.

• Increased Operating expenses of $1.7 million driven primarily by increased fixed and variable compensation costs.

For the six month comparative period, operating earnings decreased $2.3 million, or 7.3%, over the prior year period due to:

• Increased Gross margin of $0.7 million driven by the higher sales volumes explained above, which more than offset a decline in gross margin percentage of 80 basis points.

◦ Unfavorable foreign currency translation which negatively impacted gross margin.

◦ Regional and product sales mix which had an unfavorable impact to gross margin.

◦ These pressures was partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes.

• Increased Operating expenses of $1.1 million driven primarily by:

◦ Increased compensation and benefits of approximately $3 million.

◦ Foreign currency translation which contributed an unfavorable impact of approximately $2 million compared to the prior year.

These increases were offset in part by decreased restructuring charges and impairment charges as compared to the prior year period.

For the nine month comparative period, operating earnings decreased $0.1 million, or 0.2%, over the prior year period due to:

• Increased Gross margin of $4.0 million driven by the higher sales volumes explained above, and a decline in gross margin percentage of 70 basis points.

The decrease in gross margin percentage was due primarily to:

◦ Tariff-related costs adversely impacted gross margin by approximately 60 basis points.

◦ Unfavorable foreign currency translation further reduced margin by approximately 40 basis points.

◦ These pressures were partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes, which contributed approximately 20 basis points to margin improvement.

• Increased Operating expenses of $3 million.

The following factors contributed to the change:

◦ Unfavorable foreign currency translation which negatively impacted gross margin.

◦ Regional and product sales mix which had an unfavorable impact to gross margin.

◦ These pressures were partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes and favorable material performance.

• Increased Operating expenses of $4.1 million driven primarily by:

◦ Increased fixed and variable compensation costs of approximately $5 million.

◦ Foreign currency translation which contributed an unfavorable impact of approximately $1 million relative to the prior year.

◦ These increases were partially offset by a reduction in acquisition-related integration charges.

◦ Foreign currency translation which contributed an unfavorable impact of approximately $2 million compared to the prior year.

These increases were offset in part by decreased acquisition-related integration charges and impairment charges during the prior year period.

(*) Non-GAAP measurements;

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Global Retail

Three Months Ended Six Months Ended

(Dollars in millions) November 29, 2025 November 30, 2024 Change November 29, 2025 November 30, 2024 Change

Net sales $ 275.8 $ 263.3 $ 12.5 $ 530.1 $ 502.2 $ 27.9

Gross margin 124.5 120.6 3.9 237.4 231.3 6.1

Three Months Ended

Nine Months Ended

(Dollars in millions)

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Gross margin %

Operating earnings 4.1 8.3 (4.2) 5.5 13.6 (8.1)

Operating earnings (loss)

Operating earnings %

For the three month comparative period, Net sales increased 4.7%, and 3.4% (*) on an organic basis, over the prior year period.

For the three month comparative period, Net sales increased 7.1%, or 4.4% on an organic* basis, over the prior year period.

This growth was primarily driven by:

• Higher sales volumes within the segment, supported by our North America retail store expansion strategy, contributed approximately $7 million to the increase.

• Favorable foreign currency translation, which increased net sales by approximately $4 million.

• Price increases, net of discounting positively impacted net sales by approximately $7 million.

This includes the favorable impact of pricing actions taken to help offset tariff cost pressures.

For the six month comparative period, Net sales increased 5.6%, and 4.1% (*) on an organic basis compared to the prior year period.

• Favorable foreign currency translation, which increased net sales by approximately $7 million.

• Higher sales volumes within the segment, supported by our North America retail store expansion strategy, contributed approximately $5 million to the increase.

For the nine month comparative period, Net sales increased 6.1%, or 4.2% on an organic* basis compared to the prior year period.

This growth was primarily driven by:

2 unchanged sentences

• Price increases, net of discounting positively impacted net sales by approximately $9 million.

This includes the favorable impact of pricing actions taken to help offset tariff cost pressures.

For the three month comparative period, Operating earnings decreased $4.2 million or 50.6% as compared to the prior year period due to:

For the three month comparative period, Operating earnings increased $100.7 million or 106.7% compared to the prior year period due to:

• Increased Gross margin of $2.8 million driven by the higher sales volumes explained above, which was offset by a decline in gross margin percentage of 200 basis points.

The decrease in gross margin percentage was due primarily to:

◦ Tariff-related costs, net of pricing actions taken to help offset costs, which adversely impacted gross margin by approximately 110 basis points.

◦ Unfavorable foreign currency translation further reduced margin by approximately 40 basis points.

◦ These margin percentage pressures were partially offset by favorable operating leverage on fixed costs driven by increased sales volumes and a more favorable product mix which added approximately 80 basis points to margin improvement.

• Increased Operating expenses of $8.1 million.

The following factors contributed to the change:

◦ Incremental costs of $4 million associated with the expansion of our retail store footprint.

◦ Targeted incremental promotional actions to offset adverse weather conditions which negatively impacted gross margin.

◦ Unfavorable foreign currency translation negatively impacted gross margin.

◦ These pressures were partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes.

• Decreased Operating expenses of $97.9 million driven primarily by decreased non-cash intangible impairment charges of $109.0 million compared to the prior year.

This decrease was offset in part by:

◦ Increased fixed and variable compensation costs of approximately $5 million.

◦ Variable selling costs, including sales-based commissions and royalty expenses which increased by approximately $1 million compared to the prior year period.

◦ Unfavorable foreign currency translation.

For the six month comparative period, Operating earnings decreased $8.1 million over the prior year period due to:

• Increased Gross margin of $6.1 million driven by the higher sales volumes explained above, which more than offset a decline in gross margin percentage of 130 basis points.

◦ Incremental costs of $4 million associated with the impact from opening new stores.

◦ Foreign currency translation which contributed an unfavorable impact of approximately $2 million compared to the prior year.

For the nine month comparative period, Operating earnings increased $92.6 million over the prior year period due to:

• Increased Gross margin of $8.9 million driven by the higher sales volumes explained above, which was offset by a decline in gross margin percentage of 150 basis points.

The decrease in gross margin percentage was due primarily to:

◦ Tariff-related costs, net of pricing actions taken to help offset costs, which adversely impacted gross margin by approximately 120 basis points.

◦ Unfavorable foreign currency translation further reduced margin by approximately 30 basis points.

◦ These decreases were offset in part by leverage on fixed costs attributable to higher sales volumes as compared to the prior year which had a favorable impact on gross margin percentage of approximately 20 basis points.

• Increased Operating expenses of $14.2 million.

The following factors contributed to the change:

◦ Incremental costs of $7 million associated with the expansion of our retail store footprint.

◦ Tariff-related costs, net of pricing actions taken to help offset costs, incurred in the first half of the year that adversely impacted gross margin.

◦ Unfavorable foreign currency translation negatively impacted gross margin.

◦ These pressures were partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes.

• Decreased Operating expenses of $83.7 million driven primarily by decreased non-cash intangible impairment charges of $109.0 million compared to the prior year.

This decrease was offset in part by:

◦ Increased fixed and variable compensation costs of approximately $12 million.

◦ Variable selling costs, including sales-based commissions and royalty expenses which rose by approximately $2 million compared to the prior year period.

◦ Incremental costs of $11 million associated with the impact from opening new stores.

◦ Foreign currency translation which contributed an unfavorable impact of approximately $4 million compared to the prior year.

(*) Non-GAAP measurements;

see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures."

Corporate unallocated expenses totaled $15.5 million for the second quarter of fiscal 2026, a decrease of $2.0 million from the second quarter of fiscal 2025 related primarily to lower fixed and variable compensation expense.

Corporate unallocated expenses totaled $33.8 million for the first six months of fiscal 2026, an increase of $0.6 million from the same period of fiscal 2025 related primarily to higher fixed and variable stock based compensation expense.

Corporate unallocated expenses totaled $15.4 million for the third quarter of fiscal 2026, an increase of $0.7 million from the third quarter of fiscal 2025 related primarily to higher fixed and variable compensation expense.

Corporate unallocated expenses totaled $49.2 million for the first nine months of fiscal 2026, an increase of $1.3 million from the same period of fiscal 2025 related primarily to higher fixed and variable stock based compensation expense.

Liquidity and Capital Resources

The table below summarizes the net change in Cash and cash equivalents for the six months ended as indicated.

(In millions) November 29, 2025 November 30, 2024

The table below summarizes the net change in Cash and cash equivalents for the nine months ended as indicated.

(In millions)

February 28, 2026

March 1, 2025

Cash provided by (used in):

5 unchanged sentences

Cash Flows - Operating Activities

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 six months ended November 29, 2025, totaled $74.0 million compared to $76.4 million in the same period of the prior year.

The decrease in cash inflow is due primarily to a net increase in working capital.

Net cash provided by operating activities for the nine months ended February 28, 2026, totaled $135.1 million compared to $138.4 million in the same period of the prior year.

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 and changes in working capital.

Working capital remained a use of cash in the current year but decreased 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.

4 unchanged sentences

Cash Flows - Investing Activities

Cash used in investing activities for the six months ended November 29, 2025, was $60.3 million, as compared to $44.8 million in the same period of the prior year.

Cash used in investing activities for the nine months ended February 28, 2026, was $77.8 million, as compared to $60.3 million in the same period of the prior year.

The increase was primarily driven by higher capital expenditures in the current year.

At the end of the second quarter of fiscal 2026, there were outstanding commitments for capital purchases of $17.6 million.

At the end of the third quarter of fiscal 2026, there were outstanding commitments for capital purchases of $22.7 million.

The Company plans to fund these commitments through a combination of cash on hand and cash flows from operations.

1 unchanged sentence

This compares to full-year capital spending of $107.6 million in fiscal 2025.

Capital expenditures for the first six months of fiscal 2026 were $61.3 million compared to $44.9 million for the six months ended November 30, 2024.

Capital expenditures for the first nine months of fiscal 2026 were $83.4 million compared to $68.1 million for the nine months ended March 1, 2025.

Cash Flows - Financing Activities

Cash used in financing activities for the six months ended November 29, 2025, was $28.6 million, as compared to $33.9 million in the same period of the prior year.

Cash used in financing activities for the nine months ended February 28, 2026, was $83.8 million, compared to $127.6 million in the same period of the prior year.

The decrease in cash used in the current year, compared to the prior year, was primarily due to:

• The Company repurchased 698,514 shares at a cost of $12.2 million in the current period as compared to 2,500,379 share repurchases totaling $66.9 million in the same period of the prior year.

• The Company repurchased 705,141 shares, including shares withheld to satisfy tax withholdings, at a cost of $12.3 million in the current period as compared to 3,286,029 share repurchases, including shares withheld to satisfy tax withholding totaling $84.8 million in the same period of the prior year.

• During the current period the Company entered into a three-year accounts receivable securitization facility.

1 unchanged sentence

This was offset in part by:

• Net borrowings on the credit agreement of $14.2 million in the current period compared to net borrowings of $73.1 million in the same period of the prior year.

• Net payments on the credit agreement of $37.3 million in the current period compared to net borrowings of $24.0 million in the same period of the prior year.

• The refinancing of Term Loan B resulted in a net cash outflow of $65.6 million in the current period.

3 unchanged sentences

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.

At the end of the second quarter of fiscal 2026, the Company had a well-positioned balance sheet and liquidity profile.

At the end of the third quarter of fiscal 2026, the Company had a well-positioned balance sheet and liquidity profile.

The Company has access to liquidity through credit facilities as well as cash and cash equivalents.

1 unchanged sentence

For additional information, refer to Note 12 to the Condensed Consolidated Financial Statements.

(In millions) November 29, 2025 May 31, 2025

(In millions)

February 28, 2026

Cash and cash equivalents

1 unchanged sentence

Total liquidity

Of the Cash and cash equivalents noted above at the end of the second quarter of fiscal 2026, the Company had $173.2 million of Cash and cash equivalents held outside the United States.

Of the Cash and cash equivalents noted above at the end of the third quarter of fiscal 2026, the Company had $161.4 million of Cash and cash equivalents held outside the United States.

The Company’s syndicated revolving line of credit, which matures in April 2030, provides the Company with up to $725 million in revolving variable interest borrowing capacity and allows the Company to borrow incremental amounts, at its option, subject to negotiated terms as outlined in the agreement.

Outstanding borrowings bear interest at rates based on the prime rate, federal funds rate, SOFR or negotiated terms as outlined in the agreement.

As of November 29, 2025, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $345.0 million with available borrowings on this facility of $367.9 million.

As of February 28, 2026, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $293.5 million with available borrowings on this facility of $419.4 million.

The Company intends to repatriate $137.3 million of undistributed foreign earnings all of which is held in cash in certain foreign jurisdictions with the remainder of undistributed earnings outside the U.S.

5 unchanged sentences

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 November 29, 2025.

which is estimated to be approximately $382.9 million on February 28, 2026.

The Company believes cash on hand, cash generated from operations, and borrowing capacity will provide adequate liquidity to fund near term and foreseeable future business operations, capital needs, upcoming debt maturities, future dividends and share repurchases, subject to financing availability in the marketplace.

21 unchanged sentences

These forward-looking statements involve certain risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not limited to:

• The effects of the ongoing conflict and broader geopolitical instability in the Middle East, including with respect to negative impacts on our supply chain, decreased sales within the region or beyond due to supply chain constraints, and broader inflationary and macroeconomic effects;

• Changes to U.S.

2 unchanged sentences

• Consumer spending levels, which have a significant impact on demand for our products within our Global Retail segment;

• Global and national economic conditions such as heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, escalating tensions in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events;

• Global and national economic conditions such as heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, the escalating conflict in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events;

• Cybersecurity threats and risks;

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis