Breaking Down MillerKnoll, Inc. (MLKN) Financial Health: Key Insights for Investors

If you're looking at MillerKnoll, Inc. (MLKN), you need to look past the top-line number, because the financial health picture is defintely mixed right now. The company closed its fiscal year 2025 with consolidated Net Sales of just over $3.7 billion, a modest 1.1% increase year-over-year, but the real story is the GAAP diluted loss per share of ($0.54), a stark contrast to the Adjusted Earnings Per Share (EPS) of $1.95 for the full year. To be fair, the fourth quarter showed some muscle with new orders jumping 11.1% to over $1.04 billion, which is a great sign for near-term revenue. Still, with a debt-to-equity ratio of 1.02 and the stock recently hitting a 52-week low of $14.10 in November 2025, you have to ask: is this a value play with momentum or a debt-laden turnaround story? We need to break down the cash flow, the true cost of their Global Retail expansion, and what that $575.9 million in liquidity is really protecting.

Revenue Analysis

You need a clear picture of where MillerKnoll, Inc. (MLKN) is actually making its money, and the simple takeaway is that the core contract business-selling to other companies-is the engine, but the Global Retail segment is the one showing stress. For the full fiscal year 2025, MillerKnoll generated net sales of nearly $3.7 billion ($3,669.9 million, to be exact), representing a modest year-over-year increase of only 1.1% as reported.

That 1.1% growth is slow, but it's growth, and the organic growth rate-which strips out the effect of currency changes and acquisitions-was slightly better at 1.6%. This tells us the company is still expanding its business, just at a cautious pace. Here's the quick math on where that revenue came from, broken down by their three main segments:

• North America Contract: The largest segment, focusing on commercial clients in the US and Canada.
• Global Retail: Sells directly to consumers through brands like Design Within Reach (DWR) and Herman Miller retail stores.
• International Contract & Specialty: Covers commercial clients outside North America.

The primary revenue source for MillerKnoll is definitely the Contract business, which accounts for over 70% of total sales. The table below shows the precise contribution for the full fiscal year 2025.

The significant change in the revenue streams is the performance of Global Retail. Its net sales declined by 1.5% as reported, and 0.3% organically, over the fiscal year 2025. That's a clear signal that the consumer side of the business is feeling the pinch of a slower housing market and discretionary spending pullback, which is defintely something to watch. The contract segments, by contrast, both showed solid growth of +2.2%, meaning businesses are still investing in their workspaces, even if slowly. The contract segments are keeping the overall growth positive.

So, the company is successfully navigating a choppy macro environment by leaning on its dominant Contract segments, but the Retail side needs a turnaround. If you want to dig deeper into who is actually buying these shares, check out Exploring MillerKnoll, Inc. (MLKN) Investor Profile: Who's Buying and Why?

Profitability Metrics

You want to know if MillerKnoll, Inc. (MLKN) is making money, and more importantly, how efficiently. The direct answer for fiscal year 2025 (FY2025) is that while the company maintained a strong gross margin, a significant rise in operating expenses pushed the GAAP operating margin down sharply, resulting in a net loss. This is a clear red flag for investors focused on bottom-line results.

Here's the quick math on the core profitability ratios for the year ended May 31, 2025, based on net sales of approximately $3,669.9 million.

• Gross Profit Margin: 38.8%
• Operating Profit Margin: 1.4%
• Net Profit Margin: -1.01% (a net loss of $36.90 million)

Trends in Operational Efficiency and Margins

Looking at the trend, MillerKnoll's profitability is under pressure, which is a major concern. The Gross Margin, which measures operational efficiency before selling, general, and administrative (SG&A) costs, was 38.8% in FY2025, a slight drop from 39.1% in the prior year. This 30-basis-point decrease signals that the cost of goods sold (COGS) is growing faster than sales prices, largely driven by tariff-related cost increases.

Where the real trouble lies is in the Operating Profit Margin. It plummeted from 4.6% in the prior fiscal year to just 1.4% in FY2025. Here's the thinking: Gross Profit was roughly $1,423.9 million, but operating expenses ballooned to $1,372.1 million, a 9.6% increase year-over-year. That massive jump in operating costs-which includes everything from sales commissions to administrative overhead-is what nearly wiped out all the gross profit.

The company is struggling to translate solid top-line execution into profit.

Industry Comparison: MLKN vs. Peers

When you stack MillerKnoll up against the median for the U.S. Office Furniture industry, the operational efficiency gap becomes very apparent. While the Gross Margin is competitive, the Operating and Net Margins are lagging significantly. This suggests that while MillerKnoll's product pricing and manufacturing costs (Cost of Goods Sold) are in line, its non-production expenses are disproportionately high.

To be fair, the industry median is from 2024, but the magnitude of the difference-a 260 basis point deficit in operating margin-is defintely a structural issue for MillerKnoll. The company's strategic initiatives, like integrating the brand portfolio, need to deliver on cost synergies (reducing combined expenses) quickly to close this gap. You can read more about what drives their strategy here: Mission Statement, Vision, & Core Values of MillerKnoll, Inc. (MLKN).

The company is clearly spending to grow, which is visible in the increased adjusted operating expenses, but the market is still waiting for that investment to translate into sustainable, positive GAAP net income. Investors should be watching for a clear path to reducing the operating expense ratio-that's the key to turning that negative net profit margin around.

Action for you: Demand a clear, quarter-by-quarter plan from management on how they will reduce the operating expense-to-revenue ratio to below 35% in FY2026, which is what they need to hit the industry's median operating margin.

Debt vs. Equity Structure

You need to know how MillerKnoll, Inc. (MLKN) is funding its operations, and the short answer is: they are leaning heavily on debt, but it's a common strategy in their capital-intensive industry. The company's debt-to-equity (D/E) ratio sits around 1.34, which is elevated but still below the industry median for office furniture manufacturers, which was approximately 1.57 in 2024.

This D/E ratio tells us that for every dollar of shareholder equity, the company has borrowed about $1.34. While a high D/E ratio signals higher financial leverage and risk, it also suggests MillerKnoll is using borrowed money to fuel growth-a strategy that can magnify returns if executed well. The challenge is managing the interest expense and repayment schedule, especially in a volatile economy.

A Look at the Debt Components

As of the third quarter of fiscal year 2025 (ended March 1, 2025), MillerKnoll's total debt was substantial, reflecting the capital needed to run a global manufacturing and retail operation. The balance sheet shows a clear split between what's due soon and what's due later.

• Short-term borrowings and current portion of long-term debt: $48.4 million
• Long-term debt: $1,283.3 million
• Stockholders' Equity: $1,254.1 million

Here's the quick math: The vast majority of their debt, over 96%, is long-term, which is a good sign for near-term liquidity, but it means you defintely need to keep an eye on those future maturity dates. Their net debt-to-EBITDA ratio, a key metric for lenders, was 2.88x at the end of fiscal 2025, which is a manageable leverage level under their credit facility agreements.

Navigating Refinancing and Credit Risk

MillerKnoll has been proactive in managing its debt structure in 2025, a critical action for a company with this level of leverage. They recently executed two significant refinancing moves to push out maturity walls, essentially buying themselves more time.

• In April 2025, they amended their Revolving Credit Facility and Term Loan A, extending the maturity date to April 2030.
• In the first quarter of fiscal 2026 (ended August 2025), they issued a $550 million Term Loan B, replacing the existing one and extending its maturity to 2032.

This refinancing activity is smart capital management, but it didn't stop S&P Global Ratings from revising the company's outlook to Negative from Stable in May 2025. The rating agency affirmed the 'BB' issuer credit rating but cited elevated leverage and potential pressure from higher tariff-related costs as the reason for the negative outlook. The risk is that if operating performance deteriorates, their adjusted debt-to-EBITDA could sustain above 4x, which could trigger a lower rating.

To understand the full scope of their financial health, you can read the complete analysis in Breaking Down MillerKnoll, Inc. (MLKN) Financial Health: Key Insights for Investors. Looking ahead, the company is balancing debt financing with equity funding, including share repurchases, to manage its capital structure and return value to shareholders. This balancing act is what you're investing in.

Liquidity and Solvency

You need to know if MillerKnoll, Inc. (MLKN) has enough quick cash to manage its near-term obligations, and the answer is a qualified yes. The company maintains a solid overall liquidity position but, like many firms in the furnishings sector, it relies heavily on inventory to cover all short-term debt, which is a key risk to monitor.

Our analysis of the fiscal year 2025 data shows the company is managing its balance sheet well, but the significant decline in operating cash flow is a defintely a point of concern for investors looking at long-term financial stability.

Current and Quick Ratios: A Closer Look at Short-Term Health

The first place I look for short-term financial health is the current ratio, which tells you how much in liquid assets a company has for every dollar of current liabilities. For MillerKnoll, Inc., the current ratio at the end of fiscal year 2025 was a healthy 1.67. This means they have $1.67 in current assets for every $1.00 in current liabilities, which is a comfortable margin.

However, the quick ratio (or acid-test ratio), which strips out inventory-the least liquid current asset-was only 0.82. This ratio is below the benchmark of 1.0, and it tells a more nuanced story. It shows that without selling inventory, MillerKnoll, Inc. cannot cover all its current liabilities with just cash, receivables, and marketable securities. The company's liquidity is tied up in its products.

• Current Ratio: 1.67 (Solid short-term coverage).
• Quick Ratio: 0.82 (Inventory-dependent for full coverage).

Inventory is a big part of the equation here.

Working Capital and Cash Flow Trends

Working capital, which is simply current assets minus current liabilities, stood at approximately $437.8 million in fiscal year 2025. This positive number is good, but the trend in cash flow from operations (CFO) is where you see the pressure.

In fiscal year 2025, MillerKnoll, Inc. generated $209.3 million in Cash Flow from Operations (CFO). This is a substantial amount of cash, but it represents a sharp drop from the $352.3 million generated in the prior fiscal year (FY 2024). This decline in operating cash is a direct result of market pressures and higher operating costs that squeezed profitability.

Here's the quick math on the cash flow over the last two fiscal years (amounts in millions of USD):

The company also spent about $107.6 million on capital expenditures (CapEx) in FY 2025. This means that after funding business maintenance and growth, the free cash flow is still positive but significantly lower than the previous year. You can read more about the strategic drivers behind these investments in the Mission Statement, Vision, & Core Values of MillerKnoll, Inc. (MLKN).

Liquidity Strengths and Risks

The primary strength is the total available liquidity, which stood at $575.9 million as of May 31, 2025. This figure combines cash on hand and available credit from their Revolving Credit Facility. Plus, they managed to amend their Term Loan A and Revolving Credit Facility, extending the maturity date to April 2030. That buys them significant time and flexibility.

But, still, the key risk is the overall debt load. MillerKnoll, Inc. has a high debt-to-equity ratio of 1.34. Also, the Altman Z-Score, a measure of bankruptcy risk, is currently in the distress zone at 1.88. While they are comfortably meeting their near-term debt maturities-only $16.0 million is due in fiscal 2026-the high leverage means any sustained drop in operating cash flow will quickly pressure their solvency.

Next Step: Portfolio Managers should model a 15% reduction in FY 2026 revenue to stress-test the quick ratio and debt service coverage against the $16.0 million in scheduled debt maturities.

Valuation Analysis

You're looking for a clear signal on whether MillerKnoll, Inc. (MLKN) is a buy, and the valuation metrics are sending mixed, but mostly cautious, signals. The stock appears statistically cheap on a book value and EBITDA basis, but its negative earnings mean the immediate value proposition is tied to a turnaround, not current profitability.

The Wall Street consensus is currently a Hold, reflecting this uncertainty. The stock has been volatile, which is a near-term risk you need to factor in.

Is MillerKnoll Overvalued or Undervalued?

Based on traditional multiples for the 2025 fiscal year, MillerKnoll, Inc. (MLKN) looks undervalued compared to the broader market and many peers. Still, the underlying reason is its negative earnings, which makes the valuation a bet on future growth, not past performance.

Here's the quick math on the key valuation ratios:

• Price-to-Book (P/B) is 0.78. This is a strong indicator of undervaluation, as the market is pricing the company at less than its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) is 6.64. This is a reasonable, often cheap, multiple for a company in the industrial sector, suggesting the core business operations (before interest, taxes, depreciation, and amortization) are not excessively priced.
• Price-to-Earnings (P/E) is negative, around -56.76 to -65.25. A negative P/E ratio is a red flag, telling you the company is losing money on a trailing twelve-month basis, so the traditional P/E valuation is meaningless right now.

The market capitalization sits around $970 million, but the enterprise value (EV) is significantly higher at $2.62 billion, which shows the substantial debt load you need to consider. This is defintely a classic value trap setup if the turnaround stalls.

Stock Price Trends and Analyst Sentiment

The stock price trend over the last 12 months shows significant pressure. MillerKnoll, Inc. hit a 52-week high of $25.96 and a 52-week low of $13.84. As of mid-November 2025, the stock is trading near its low, with a price around $14.76. This steep drop, a decline of over 38% in the past year, is why the P/B ratio looks so low.

Analyst consensus is a Hold, a middle-of-the-road assessment that suggests waiting for clearer operational improvements. The four analysts covering the stock are split: one has a Strong Buy, two have a Hold, and one has a Sell rating. The high price target is an ambitious $35.00, but that target is predicated on a successful execution of their restructuring plan.

Dividend Health: Yield vs. Payout Ratio

MillerKnoll, Inc. offers an attractive dividend yield, but you need to look past the headline number. The annual dividend is $0.75 per share, giving a trailing dividend yield of about 5.26%. That's a strong yield, but the sustainability is the issue.

The trailing payout ratio based on earnings is a highly negative figure, reported as high as -312.5%, because the company has reported a net loss. What this estimate hides is that the dividend is not covered by net income, which makes it unsustainable without a change in profitability. To be fair, the forward-looking payout ratio, based on current-year earnings estimates, drops to a more comfortable 35.38%, suggesting analysts expect a quick return to covering the dividend with earnings. This is a critical point for income investors. You can dive deeper into the full financial picture in our main article, Breaking Down MillerKnoll, Inc. (MLKN) Financial Health: Key Insights for Investors.

Risk Factors

You're looking for a clear-eyed view of MillerKnoll, Inc. (MLKN) before committing capital, and the truth is, while the company has momentum, key risks-especially tariffs and high debt-are squeezing profitability. The biggest near-term challenge is the external cost of trade policy, which hit the gross margin hard in fiscal 2025 and will continue to be a headwind into fiscal 2026.

Here's the quick math: MillerKnoll's full fiscal year 2025 net sales reached $3.67 billion, a modest 1.1% increase, but the consolidated gross margin for the year decreased by 30 basis points. This tells you growth is there, but cost pressures are defintely eating into margins, which is a critical signal for investors.

Operational Headwinds: The Tariff Squeeze

The most concrete operational risk impacting MillerKnoll's financial health is the cost of U.S. and international trade policies, primarily tariffs on imported goods. This isn't a vague macroeconomic worry; it's a direct, measurable cost.

• Q4 2025 Cost: Tariff-related cost increases reduced the gross margin by approximately $7.0 million in the fourth quarter of fiscal 2025.
• Near-Term Outlook: Management anticipates the incremental costs related to tariffs to range between $9 million to $11 million before tax in the first quarter of fiscal 2026, which translates to a $0.09 to $0.11 reduction in adjusted earnings per share.

The company is addressing this with pricing actions and sourcing strategies, but the full offset isn't expected until late fiscal 2026. Until then, these costs will continue to pressure the gross margin, which stood at 38.8% for the full fiscal year 2025.

Financial Risk: Debt and Interest Expense

The acquisition of Knoll, Inc. in 2021 created a substantial debt load that continues to pose a financial risk, especially in a higher interest rate environment. This debt increases interest expense and limits financial flexibility for strategic maneuvers or capital returns.

As of May 31, 2025, MillerKnoll's consolidated long-term debt was approximately $1.31 billion. The net debt-to-EBITDA ratio, as defined by their Credit Facility, was 2.88x at the end of fiscal 2025. This is a manageable, but not insignificant, leverage level that requires constant monitoring of free cash flow.

Here's a snapshot of near-term debt maturities, which are relatively modest but still require cash flow planning:

The company did reduce total outstanding debt by $4.8 million in Q4 2025, which is a positive sign of disciplined capital allocation.

Strategic and Market Risks

Beyond the numbers, you need to consider the external market and strategic execution risks. The Global Retail segment is highly sensitive to consumer spending levels, which remain volatile due to inflation and interest rate uncertainty. Plus, the company operates in a highly competitive industry, so maintaining pricing power is a constant battle.

Operational execution also carries risks, as evidenced by special charges of $16.9 million in Q4 2025, which included $10.6 million in restructuring charges. This indicates ongoing efforts to streamline operations, which can be disruptive in the short term. For a deeper dive into the company's capital structure and shareholder base, you should read Exploring MillerKnoll, Inc. (MLKN) Investor Profile: Who's Buying and Why?

Management's mitigation strategy centers on expanding its retail footprint, with plans to open 10 to 15 new stores in fiscal 2026, and continuous product innovation to stay ahead of competitors like Steelcase. They are spending money to make money, but that investment must pay off quickly.

Growth Opportunities

You want to know where the next dollar of profit is coming from for MillerKnoll, Inc. (MLKN), and the answer is a clear, dual-pronged strategy: deep product innovation and aggressive retail expansion. The company is not just waiting for the office market to fully recover; they are actively building new revenue streams while their core contract business shows signs of life.

Here's the quick math: MillerKnoll closed out fiscal year 2025 with net sales of $3.67 billion and adjusted earnings per share (EPS) of $1.95. The consensus for next year (FY2026) projects EPS to climb to about $2.70 per share, a jump of over 27%. That kind of growth doesn't happen by accident; it's driven by specific, actionable initiatives.

Key Growth Drivers: Product and Retail Footprint

The biggest near-term opportunity is the retail side, which is getting a massive injection of capital and new product. In fiscal year 2025, MillerKnoll opened four new stores and is planning to open another 10 to 15 in fiscal year 2026, including in major US cities like Las Vegas, Philadelphia, and Nashville. This is part of a plan to more than double their Design Within Reach (DWR) and Herman Miller retail footprint over the next few years. That's a defintely clear path to higher sales.

Plus, they are flooding the market with new designs, which keeps their brands fresh and drives higher-margin sales. They launched over 30 new products in FY2025, like the 'Null Dividend Skyline' and the 'GEMMA Healthcare Seating Family,' targeting specialized, high-growth verticals like healthcare and the public sector. This product-first approach is key.

• Launch over 30 new products in FY25.
• Open 10-15 new US stores in FY26.
• Expand retail product assortment by 50% over FY25.

Strategic Focus and Competitive Edge

The company's strategic initiatives are focused on leveraging the full power of their combined brand portfolio, which is their core competitive advantage. The merger of Herman Miller and Knoll created a collective of brands with global scale, a major barrier to entry for smaller competitors. They are completing the transition for 100% of their global dealer network to sell the full MillerKnoll Collective by the end of fiscal 2025, which streamlines their sales process and gives customers a single source for a vast range of products.

In the contract business, which includes office furniture, North America sales were already up 12.5% in the fourth quarter of fiscal 2025, with new orders climbing 15.8%. That tells you companies are starting to spend on office redesigns again. You can see more about who is betting on this turnaround here: Exploring MillerKnoll, Inc. (MLKN) Investor Profile: Who's Buying and Why?

Financial Projections and Segment Performance

The growth story is clearest when you look at the segment-level performance. The North America Contract segment is the engine, but Global Retail is the high-growth catalyst. International Contract also saw a solid Q4 FY2025, with sales up 6.9%. This diversification across segments and geographies makes the overall revenue stream more resilient.

Here is a snapshot of the full fiscal year 2025 actual performance and the near-term outlook:

What this estimate hides is the margin pressure from tariffs and new store opening costs, which are transitory expenses. Management expects these to ease in the second half of fiscal year 2026 as price increases are fully realized, leading to margin recovery. The long-term upside is tied to the successful execution of this retail expansion and a sustained recovery in corporate contract spending.