What changed in this filing

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Item 1A. Risk Factors

2026-07-20 compared with 2025-07-21 · 88 added, 104 removed, 117 unchanged (62% of the section changed)

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There is no assurance that we can identify or otherwise develop these channels of distribution.

In connection with the July 2021 acquisition of Knoll, we incurred significant additional indebtedness, which has increased our interest expense and could adversely affect us, including by decreasing our business flexibility.

The consolidated long-term debt of MillerKnoll as of May 31, 2025, was $1.31 billion.

As a result of our acquisition of Knoll in July 2021, we substantially increased our indebtedness, which has increased our interest expense and could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions.

We have also incurred various costs and expenses associated with such indebtedness.

The amount of cash required to pay interest on our increased indebtedness levels and thus the demands on our cash resources are greater than the amount of cash flows previously required to service our indebtedness.

The increased levels of indebtedness will also reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes and may create competitive disadvantages for MillerKnoll relative to other companies with lower debt levels.

The indebtedness incurred in connection with the acquisition of Knoll contains various covenants that impose restrictions on us that may affect our ability to operate our business.

These include both affirmative and negative covenants that, subject to certain significant exceptions, restrict the ability of us and certain of our subsidiaries to, among other things, incur liens on our property, incur additional indebtedness, enter into sale and lease-back transactions, make loans, advances, or other investments, make non-ordinary course asset sales, declare or pay dividends, engage in share repurchases or make other distributions with respect to equity interests, and/or merge or consolidate with any other person or sell or convey certain assets to any one person.

In addition, the definitive documentation governing such indebtedness contains a financial maintenance covenant that requires us to maintain a certain leverage ratio at the end of each fiscal quarter.

Our ability to comply with these provisions may be affected by events beyond our control.

Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations under such indebtedness.

In addition, we may be required to raise substantial additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate requirements.

Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.

There is no assurance we will be able to obtain such additional financing on terms acceptable to us or at all.

Our executive leadership transition may adversely affect our ability to execute our strategy and maintain business momentum.

In June 2026, we announced the departure of our President and Chief Executive Officer and the appointment of our Chief Operating Officer as Interim Chief Executive Officer while the Board conducts a search for a permanent successor.

Executive leadership transitions and searches can create uncertainty among employees, customers, dealers, suppliers, investors, and other stakeholders, and may disrupt management focus or delay decision-making.

If we are unable to complete an effective transition, retain and motivate key leaders and employees, or maintain continuity in the execution of our strategic priorities, our business, results of operations, and financial condition could be adversely affected.

We are unable to control the factors affecting consumer spending.

Declines in consumer spending on furnishings could reduce demand for our products.

The operations of our Global Retail segment are sensitive to a number of factors that influence consumer spending, including general economic conditions, consumer disposable income, unemployment, inclement weather, availability of consumer credit, consumer debt levels, conditions in the housing market, interest rates, sales tax rates and rate increases, inflation, and consumer confidence in future economic conditions.

Adverse changes in these factors have reduced, and in the future may further reduce consumer demand for our products, resulting in reduced sales and profitability.

A number of factors that affect our ability to successfully implement our retail studio strategy, including opening new locations and closing existing studios, are beyond our control.

These factors may harm our ability to increase the sales and profitability of our retail operations.

Approximately 36% of the sales within our Global Retail segment are transacted within our retail stores.

Additionally, we believe our retail stores have a direct influence on the volume of business transacted through other channels, including our consumer eCommerce and direct-mail catalog platforms, as many customers utilize these physical spaces to view and experience products prior to placing an order online or through the catalog call center.

Our ability to open additional stores or close existing stores successfully will depend upon a number of factors beyond our control, including, without limitation:

• general economic conditions;

• identification and availability of suitable locations;

• success in negotiating new leases and amending or terminating existing leases on acceptable terms;

• success of other retailers in and around our retail locations;

• ability to secure required governmental permits and approvals;

• hiring and training skilled studio operating personnel;

• landlord financial stability.

Costs related to product defects could adversely affect our profitability.

We incur various expenses related to product defects, including product warranty costs, product recall and retrofit costs, and product liability costs.

These expenses relative to product sales vary and could increase.

We maintain reserves for product defect-related costs based on estimates and our knowledge of circumstances that indicate the need for such reserves.

We cannot, however, be certain that these reserves will be adequate to cover actual product defect-related claims in the future.

Any significant increase in the rate of our product defect expenses could have a material adverse effect on operations.

Macroeconomic and Workplace Trends Related Risks

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We compete with national and regional furniture retailers, mail order catalogs and online retailers focused on home furnishings.

We compete with these and other retailers for customers, suitable

retail locations, vendors, qualified employees and management personnel.

We compete with these and other retailers for customers, suitable retail locations, vendors, qualified employees and management personnel.

Some of our competitors have significantly greater financial, marketing and other resources than we possess.

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As a result, increased competition may adversely affect our future financial performance.

Artificial intelligence and agentic commerce could transform our industry and business model, and our failure to adopt, integrate, and optimize these capabilities could adversely affect our competitive position.

The increasing use of artificial intelligence, including generative AI and autonomous or agentic commerce tools, may materially change how customers identify, evaluate, specify, purchase, and manage furniture and workplace solutions.

These technologies could alter customer expectations, affect the role of dealers, designers, and digital channels, and change competitive dynamics in our industry.

If competitors, customers, dealers, suppliers, or other market participants adopt AI-enabled tools more quickly or effectively than we do, or if AI-enabled platforms disintermediate existing sales channels or influence purchasing decisions in ways that do not favor our brands, product portfolio, or pricing, our sales, margins, and customer relationships could be adversely affected.

We are investing in technology and digital capabilities, and we may increase our use of AI tools in areas such as customer experience, product specification, operations, supply chain, marketing, data analytics, and other business processes.

These initiatives may require significant investment and may not produce the expected benefits.

Our use of AI may also increase risks related to inaccurate or biased outputs, insufficient governance, data privacy, cybersecurity, intellectual property, confidentiality, regulatory compliance, employee misuse, third-party tool availability, and reputational harm.

If we do not responsibly and effectively adopt, integrate, and optimize AI capabilities, or if our governance and controls do not keep pace with evolving technology, customer expectations, or legal requirements, our business, results of operations, and reputation could be adversely affected.

Our business presence outside the United States exposes us to certain risks that could negatively affect our results of operations and financial condition.

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and international monetary policies have had, and are expected to continue to have an adverse impact on results of operations and financial condition.

Current and potential future geopolitical tensions, including the ongoing conflicts between Russia and Ukraine and the conflicts in the Middle East, have had and could continue to have a broader impact on the global markets in which we do business.

An increase in these tensions could adversely affect our business and/or our supply chain, business partners or customers.

Continued global conflicts are likely to further increase the cost of various supplies, particularly for petroleum based products.

The impact from these conflicts, as well as any actual or potential associated international sanctions, cannot be predicted or anticipated with any reasonable degree of certainty, including the impact on the Company.

A sustained downturn in the economy could adversely impact our access to capital.

The disruptions in the global economic and financial markets during 2007 to 2009 adversely impacted the broader financial and credit markets, at times reducing the availability of debt and equity capital for the market as a whole.

A sustained downturn in the economy has and could adversely impact our access to capital.

Previous disruptions in the global economic and financial markets have adversely impacted the broader financial and credit markets, at times reducing the availability of debt and equity capital for the market as a whole.

Conditions such as these could re-emerge in the future.

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Although we believe none of these covenants is currently restrictive to our operations, our ability to meet the financial covenants can be affected by events beyond our control.

Changes in spending or budgetary policies of the U.S.

Federal Government may materially adversely affect our business.

Sales to the U.S.

federal government represented approximately 4% of total Company net sales in fiscal year 2025.

On January 20, 2025, President Trump signed an executive order creating an advisory commission, the “Department of Government Efficiency,” to reform federal government processes and reduce expenditures.

Pressures on and uncertainty surrounding the U.S.

federal government’s budget, and potential changes in budgetary priorities and spending levels, have adversely affected and could continue to affect staffing levels and funding for government agencies that purchase our products.

Manufacturing, Supply Chain and Distribution Related Risks

We expect changes to U.S.

trade policy, including new or increased tariffs and changing import/export regulations, to continue to adversely affect our operating results, and the impacts have been material.

Although we have implemented a range of cost mitigation actions, there is risk that these actions will not be sufficient to fully mitigate increased costs or that regulations could further increase costs in the future.

trade policy, including new or increased tariffs, changing import/export regulations, and uncertainty regarding potential tariff refunds, to continue to affect our operating results.

Changes in U.S.

or international social, political, regulatory or economic conditions or in laws and policies governing foreign trade, and any potential negative sentiment toward the U.S.

as a result of such changes, have, and could continue to materially and adversely affect our business.

has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S.

or international social, political, regulatory, or economic conditions, including laws and policies governing foreign trade, tariffs, customs, and import/export regulations, and any potential negative sentiment toward the U.S.

as a result of such changes, have affected and could continue to materially and adversely affect our business.

has instituted, and may continue to institute or modify, trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S.

and other countries (such as Canada, Mexico, China, and the European Union) where we conduct our business.

Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, have, and could further materially and adversely affect our financial performance.

The tariffs on imports, most notably imports from China, have impacted the cost of steel, a key commodity that we consume in producing products.

Given the significance of steel costs to our direct materials costs, we closely monitor trade tensions between the U.S.

The potential impact to our direct material costs due to tariffs on Chinese imports is somewhat limited, however, as purchases of direct materials (mainly component parts and products manufactured by third parties) from China represented an estimated 3% of our consolidated cost of sales for fiscal 2025.

As a result of policy changes and government proposals, there may be greater restrictions and economic disincentives on international trade.

The new tariffs and other changes in U.S.

trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing trade sanctions on U.S.

Such changes both have had and have the potential to continue to adversely impact the U.S.

economy, our industry and the global demand for our products, and as a result, have had a negative impact on our business, financial condition and results of operations.

We have taken actions to mitigate these cost increases, including price increases and tariff surcharges.

There is risk that these actions will not sufficiently offset the cost of tariffs and other trade policy actions.

Global trade disruption, significant introductions of trade barriers, bilateral trade frictions, and related uncertainty may materially and adversely affect our supply chain, customer demand, financial performance, and results of operations.

Tariffs and tariff-related uncertainty have affected, and may continue to affect, the cost and availability of steel, plastic, aluminum components, particleboard, and other raw materials, components, and finished goods that we use or source.

Tariff-related costs, net of pricing actions taken to help offset costs, adversely impacted gross margin during the first half of fiscal 2026.

Although we have implemented mitigation actions, including pricing actions and tariff surcharges, these actions may not fully offset increased costs, may reduce customer demand, may be delayed by contractual limitations or competitive pressures, and may not protect us from additional or retaliatory trade measures.

During fiscal 2026, court rulings created the potential for importers to seek refunds of certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA), and we have submitted, and/or intend to submit, claims for refunds on substantially all IEEPA tariffs paid that may be eligible for recovery.

However, uncertainty remains regarding the ultimate resolution of the related legal proceedings, including the U.S.

government’s appeal, and the amount and timing of any refunds that may be realized remain uncertain.

Even if we ultimately recognize refunds, the tariff environment may remain volatile, and

new, modified, or retaliatory tariffs or other trade measures could continue to adversely affect our business, financial condition, and results of operations.

Global geopolitical instability could indirectly affect our supply chain, costs, and results of operations.

Current and potential future geopolitical conflicts, including in the Middle East and involving Russia and Ukraine, as well as broader political instability and governmental responses to these events, may affect the global markets in which we do business.

Although our direct sales exposure in currently affected regions may not be material, these events can indirectly affect our operations and financial results through disruption to global supply chains, volatility in energy prices, increased freight and logistics costs, constraints on petroleum-based products and other raw materials, inflationary pressure, changes in customer demand, foreign currency volatility, and increased cybersecurity threats.

The duration, severity, and ultimate impact of geopolitical instability cannot be predicted with any reasonable degree of certainty.

If these conditions persist, broaden, or intensify, they could adversely affect our supply chain, cost structure, ability to produce and distribute products, business strategies, financial condition, results of operations, and cash flows.

Disruptions in the supply of raw and component materials could adversely affect our manufacturing and assembly operations.

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If dealers go out of business or restructure, we may suffer losses because they may not be able to pay for products already delivered to them.

Also, dealers may experience financial difficulties, creating the need for outside financial support, which

may not be easily obtained.

Also, dealers may experience financial difficulties, creating the need for outside financial support, which may not be easily obtained.

The Company has, on occasion, agreed to provide direct financial assistance through term loans, lines of credit, and/or loan guarantees to certain dealers.

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Financial Related Risks

We are subject to risks associated with self-insurance related to health benefits.

We are self-insured for our health benefits and maintain per employee stop loss coverage;

however, we retain the insurable risk at an aggregate level.

Therefore unforeseen or catastrophic losses in excess of our insured limits could have a material adverse effect on the Company’s financial condition and operating results.

See Note 1 of the Consolidated Financial Statements for information regarding the Company’s retention level.

Our indebtedness and related covenants could adversely affect our financial flexibility and ability to operate our business.

The consolidated long-term debt of MillerKnoll as of May 30, 2026, was $1.26 billion.

Our level of indebtedness increases demands on cash resources, may reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes, and may reduce our flexibility to respond to changing business and economic conditions.

The agreements governing our indebtedness also contain covenants that, subject to exceptions, restrict our ability and the ability of certain subsidiaries to take specified actions, including incurring liens or additional indebtedness, entering into sale and lease-back transactions, making certain investments or asset sales, declaring or paying dividends, engaging in share repurchases or

other equity distributions, merging or consolidating, or selling or conveying certain assets.

If we fail to comply with these covenants, and any default is not cured or waived, our repayment obligations could be accelerated.

We may also need additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate requirements, and there can be no assurance that such financing will be available on acceptable terms or at all.

Goodwill and indefinite-lived intangible asset impairment charges may adversely affect our operating results.

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We may be required to record a goodwill or intangible asset impairment charge that, if incurred, could have a material adverse effect on our financial results.

Although no impairment was recognized in fiscal 2026, the current-year quantitative goodwill impairment assessment indicated limited cushion for certain reporting units, including International Contract, Global Retail, and Coverings, whose fair values exceeded carrying values by 3.1%, 1.1%, and 8.5%, respectively.

Certain indefinite-lived trade name assets also had limited cushion, including the Knoll and Muuto trade name assets, whose fair values exceeded carrying values by 6.8% and 2.1%, respectively.

As a result, relatively modest adverse changes in projected revenue growth, operating margins, royalty rates, discount rates, or other valuation assumptions could result in material impairment charges.

Impairment of long-lived assets may adversely affect our operating results.

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If as a result of the impairment test we determine that the fair value of any of our long-lived asset groups is less than its carrying amount, we may incur an impairment charge that could have a material adverse effect on our financial results.

Costs related to product defects could adversely affect our profitability.

We incur various expenses related to product defects, including product warranty costs, product recall and retrofit costs, and product liability costs.

These expenses relative to product sales vary and could increase.

We maintain reserves for product defect-related costs based on estimates and our knowledge of circumstances that indicate the need for such reserves.

We cannot, however, be certain that these reserves will be adequate to cover actual product defect-related claims in the future.

Any significant increase in the rate of our product defect expenses could have a material adverse effect on operations.

We are subject to risks associated with self-insurance related to certain liabilities and employee benefits.

We are partially self-insured for general liability, workers’ compensation, and certain employee health and dental benefits under insurance arrangements that provide for third-party coverage of claims exceeding our loss retention levels, and our health benefit and auto liability retention levels do not include an aggregate stop loss policy.

Unforeseen or catastrophic losses, changes in medical costs, legal actions, payment lag times or actual claims experience could cause our self-insurance estimates to change and could have a material adverse effect on our financial condition and operating results.

General Risks

We are subject to risks and costs associated with protecting the integrity and security of our systems and confidential information.

We collect certain customer-specific data, including credit card information, in connection with orders placed through our eCommerce websites, direct-mail catalog marketing program, and retail studios.

For these sales channels to function and develop successfully, we and other parties involved in processing customer transactions must be able to transmit confidential information, including credit card information and other personal information regarding our customers, securely over public

and private networks.

Third parties may have or develop the technology or knowledge to breach, disable, disrupt or interfere with our systems or processes or those of our vendors.

While we believe we take reasonable steps to protect the security and confidentiality of the information we collect, we cannot guarantee that our security measures will effectively prevent others from obtaining unauthorized access to our information and our customers’ information.

The techniques used to obtain unauthorized access to systems change frequently and are not often recognized until after they have been launched.

Any person who circumvents our security measures could destroy or steal valuable information or disrupt our operations.

Any security breach could cause consumers to lose confidence in the security of our information systems, including our eCommerce websites or retail studios and choose not to purchase from us.

Any security breach could also expose us to risks of data loss, litigation, regulatory investigations, and other significant liabilities.

Such a breach could also seriously disrupt, slow or hinder our operations and harm our reputation and customer relationships, any of which could damage our business.

A security breach includes a third party wrongfully gaining unauthorized access to our systems for the purpose of misappropriating assets or sensitive information, loading corrupting data, or causing operational disruption.

These actions may lead to a significant disruption of the Company’s IT systems and/or cause the loss of business and business information resulting in an adverse business impact, including:

(1) an adverse impact on future financial results due to theft, destruction, loss misappropriation, or release of confidential data or intellectual property;

(2) operational or business delays resulting from the disruption of IT systems, and subsequent clean-up and mitigation activities;

and (3) negative publicity resulting in reputation or brand damage with customers, partners or industry peers.

The United States federal and state governments are increasingly enacting laws and regulations to protect consumers against identity theft.

Also, as our business expands globally, we are subject to data privacy and other similar laws in various foreign jurisdictions.

If we are the target of a cybersecurity attack resulting in unauthorized disclosure of our customer data, we may be required to undertake costly notification procedures.

Compliance with these laws will likely increase the costs of doing business.

If we fail to implement appropriate safeguards or to detect and provide prompt notice of unauthorized access as required by some of these laws, we could be subject to potential fines, claims for damages and other remedies, which could harm our business.

Due to the political uncertainty and military actions involving Russia, Ukraine, and surrounding regions, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware, or other cyber-attacks, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products.

We are subject to risks and potential costs associated with disruption to our technology systems as well as our ability to adequately maintain and update those systems to support growth initiatives and increasing business complexity.

Our business is increasingly dependent on information technology systems that are complex and relied on extensively throughout our business operations.

If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations.

As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputational risk.

We have invested, and expect to continue to invest, in maintaining and updating our technology systems, however implementing changes increases the risk of system disruption.

We are unable to control the factors affecting consumer spending.

Declines in consumer spending on furnishings could reduce demand for our products.

Adverse changes in these factors have reduced, and in the future may further reduce consumer demand for our products, resulting in reduced sales and profitability.

A number of factors that affect our ability to successfully implement our retail studio strategy, including opening new locations and closing existing studios, are beyond our control.

These factors may harm our ability to increase the sales and profitability of our retail operations.

Approximately 35% of the sales within our Global Retail segment are transacted within our retail stores.

experience products prior to placing an order online or through the catalog call center.

Our ability to open additional stores or close existing stores successfully will depend upon a number of factors beyond our control, including, without limitation:

• general economic conditions;

• identification and availability of suitable locations;

• success in negotiating new leases and amending or terminating existing leases on acceptable terms;

• success of other retailers in and around our retail locations;

• ability to secure required governmental permits and approvals;

• hiring and training skilled studio operating personnel;

• landlord financial stability.

We are subject to risks and potential costs associated with disruption to our technology systems and our ability to maintain and update those systems to support growth initiatives and increasing business complexity.

Our business is increasingly dependent on complex information technology systems, including our ERP systems, order entry, manufacturing scheduling, production, eCommerce, financial reporting, human resources, supplier connectivity, and other systems that support our operations and growth initiatives.

These systems may be disrupted by system failures, implementation difficulties, integration issues, power or telecommunications outages, natural disasters, human error, third-party service provider failures, cybersecurity events, or other causes.

If we experience difficulties maintaining or operating existing systems or implementing new systems, or if we are unable to successfully modernize legacy systems in a coordinated manner across internal and external stakeholders, we could experience business interruption, operational delays, manufacturing or distribution disruption, financial reporting or internal control issues, increased costs, reputational harm, and other adverse impacts.

We also rely on information technology systems and processes to collect, process, store, and transmit business, supplier, customer, employee, and other data.

If our systems, processes, or controls are not adequate to protect or appropriately manage such data, including data received from or relating to suppliers and other third parties, we could be subject to operational

disruption, contractual claims, regulatory inquiries, litigation, remediation costs, reputational harm, or loss of confidence by customers, suppliers, dealers, employees, and other stakeholders.

We are subject to cybersecurity and data security risks that could compromise our systems, data, operations, and reputation.

We, our vendors, and other third parties on which we rely are subject to evolving and increasingly sophisticated cybersecurity threats, including threats from criminal hackers, ransomware operators, phishing and social engineering schemes, insiders, hacktivists, and nation-state or state-sponsored actors, including actors associated with areas of geopolitical instability such as Iran.

These actors may attempt to gain unauthorized access to our systems or data;

misappropriate assets, confidential information, intellectual property, or personal information;

introduce malware or corrupt data;

extort payments;

disrupt our operations, supply chain, eCommerce websites, retail studios, manufacturing, distribution, or financial reporting processes;

or compromise third-party systems connected to our operations.

Our systems maintain personally identifiable information, including employee data, customer and payment-related information, and other confidential business information.

We cannot guarantee that our security measures, monitoring, incident response processes, vendor risk management program, or other controls will prevent or timely detect all unauthorized access, misuse, or disclosure of such information.

A cybersecurity incident could result in operational disruption, loss of business information, litigation, regulatory investigations, notification obligations, fines, claims for damages, remediation costs, increased compliance costs, negative publicity, reputational harm, and loss of confidence by customers, dealers, suppliers, employees, and other stakeholders, any of which could adversely affect our business, financial condition, and results of operations.

We may incur significant increased costs and become subject to additional potential liabilities related to regulatory, market and or legal related measures to address climate change.

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If we fail to achieve, or are perceived to have failed or been delayed in achieving, or improperly report our progress toward achieving these goals and commitments, it could negatively affect consumer or customer preference for our products as well as potentially expose us to enforcement actions and litigation.

Additionally, increased focus by the U.S.

and other governmental authorities on climate change and other environmental matters has led to enhanced regulation in these areas, which is expected to result in increased compliance costs and could subject us to additional potential liabilities.

Additionally, continued focus by governmental authorities on climate change and other environmental matters has led to enhanced regulation in these areas, which is expected to result in increased compliance costs and could subject us to additional potential liabilities.

The extent of these costs and risks is difficult to predict and will depend in large part on the extent of final regulations and the ways in which those regulations are enforced.

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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-K

Item 1A. Risk Factors