MILAN — MillerKnoll, a leading American furniture-maker known for its iconic midcentury modern designs, was hit by taxes and U.S. President Donald Trump’s trade policy in its fiscal full year 2025. Despite higher sales and order growth, the firm posted a net loss after reporting a profit the year before.
“Prior to tariffs being reimposed in January, MillerKnoll had seen three consecutive quarters of order growth in the North American Contract segment. The onset of tariffs interrupted this trend in the third quarter,” the firm’s chief executive officer Andi Owen explained during a conference call on Wednesday. MillerKnoll was hit by an unusually high effective tax rate of 257.6 percent in the fourth quarter.
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Financial Performance Overview
Zeeland, Mich.-based MillerKnoll, whose portfolio includes American brands Knoll, Herman Miller, Design Within Reach and Holly Hunt, as well Copenhagen-based Muuto and textile firm Maharam, said it posted a net loss of $36.9 million in the fiscal year 2025. This figure compares to the net profit of $82.3 million it posted in the 12-month period ended June 1 a year earlier.
The tax and tariff impact was more drastic in the fourth quarter. The firm posted a net loss of $57.1 million in the three-month period, compared to a profit of $9.9 million.
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For the fiscal year ended May 31, net sales inched up to $3.67 billion versus $3.63 billion. Its loss before income taxes and equity income was $21.9 million compared a profit of $99.7 million a year earlier. Operating margin narrowed to 1.4 percent compared to 4.6 percent in the prior year.
MillerKnoll expects the tariff effect to continue in the near-term though the company plans to continue to offset this in part through its ongoing pricing strategy, said chief financial officer Jeff Stutz. In anticipation of the Trump-imposed tariffs, MillerKnoll had already announced a 4.5 percent list price increase, for the contract side of its furniture business, which came into effect June 2.
“Given the volume of orders pulled forward ahead of our price surcharge and the normal time it takes to begin benefiting from list price changes in our contract businesses, we expect margins to be negatively impacted in the near term by tariffs currently in place, but remain confident, our pricing actions will offset these later in the fiscal 2026,” he said.
Tariff Impact
U.S. companies across the board are changing their pricing strategy in response to rising tariffs. A report from software company 7thonline, shared with Sourcing Journal this month, showed that 35 percent of retail executives said that, in response to a tariff increase they would adjust product pricing.
Already, one-quarter of executives said they are managing tariffs by passing the cost to the consumer; while some retailers, like Walmart, have been transparent about their plans to hike prices, others have stayed quiet. Other retailers have taken a different route — 22 percent of those surveyed said their companies have absorbed added costs affiliated with tariffs.
MillerKnoll was positive on its performance in the fourth quarter, despite the net loss. Its adjusted earnings per share, which exclude these one-time impacts, beat expectations. Its adjusted EPS was $0.60, $0.25 above the consensus estimate, the company said.
MillerKnoll came to be after fellow U.S. heritage brand Herman Miller bought Knoll in 2021. It is listed on Nasdaq.
Retail Strategy
Owen added that despite obstacles, the firm remains focused on opening stores. In fiscal 2025, Miller Knoll opened four retail stores: two DWR (Design Within Reach) stores in Palm Springs, Calif., and Paramus, N.J., and two Herman Miller stores in Fairfax, Va., and Coral Gables, Fla. Earlier this month, the American furniture company cut the ribbon on a 12,000-square-foot archive space located at its Michigan Design Yard Headquarters in the city of Holland, bringing to the fore a new space that celebrates its role in American midcentury design.
During Design Days 2025 in June, MillerKnoll unveiled a new Chicago flagship, which is indicative of its evolving retail strategy. For the first time in Chicago, Herman Miller and Knoll came together in a 70,000-square-foot space situated inside the city’s Fulton Market, alongside other MillerKnoll brands like DatesWeiser and Geiger, as well as a reimagined Herman Miller retail experience and a materials lab featuring Edelman, Knoll Textiles and Maharam.
Future Outlook, Guidance
Due to an unpredictable macroeconomic situation, the firm was cautious on guidance, noting that it would only issue first-quarter forecasts for the time being.
“Even what remains a rather volatile environment with respect to tariff policies and geopolitical issues around the world, we are limiting our guidance this quarter to the first quarter only. We do, however, remain committed to being transparent and resuming our full-year outlook for sales and earnings as visibility improves,” Stutz said, adding that tariff related costs could reduce earnings in the first quarter by between $9 million and $11 million before taxes.
MillerKnoll sees first quarter net sales in the range of $899 million to $939 million, up 6.7 percent versus the prior year at the midpoint of $919 million. Gross margin is expected to range from 37.1 percent to 38.1 percent. Adjusted operating expenses are expected to range from $290 million to $300 million, while adjusted diluted earnings per share are expected to range between $0.32 and $0.38.
Tariffs introduced by Trump have impacted U.S. furniture and textile firms across the board. MillerKnoll said about 17 to 19 percent of all of its consolidated cost of goods sold are imported into the U.S. from other countries. Fellow American furniture firm RH said earlier this month that it sees tariff-induced disruptions negatively impacting its revenues by about 6 points in the second quarter and expects to recover in the second half of its fiscal year.
Looking ahead, MillerKnoll also sees tariff pressures easing.
“We expect the impact from the tariff-related cost to decrease over time as our pricing actions layer into the results. Further, we believe our collective mitigation actions to fully offset these costs as we move into the second half of the fiscal year,” Stutz said.