MillerKnoll Faces Net Loss as Tariffs Take Toll on FY 2025 Earnings
Zeeland, Thursday, 26 June 2025.
MillerKnoll reports a $36.9 million net loss due to tariffs and high taxes, despite rising sales. The company aims for $899M-$939M revenue in Q1 FY 2026, indicating resilience amid challenges.
Impact of Tariffs and Taxes on Earnings
In fiscal year 2025, MillerKnoll (NASDAQ: MLKN) experienced a challenging financial period, reporting a net loss of $36.9 million. The company, renowned for its design brands such as Herman Miller and Knoll, attributed this downturn largely to the reimposition of tariffs and climbing tax rates [1][2]. Despite these financial setbacks, MillerKnoll demonstrated robust sales numbers, with revenue reaching $3.67 billion for the year, indicating strong market demand but severe operational cost pressures [2][3].
Sales Growth Amid Operational Challenges
MillerKnoll’s financial woes were especially pronounced in the fourth quarter, where the company’s net loss widened to $57.1 million, exacerbated by an unusually high effective tax rate of 257.6% [2][3]. This quarter marked a significant decline from the previous year’s quarterly profit of $9.9 million. However, sales grew by 8.2% year-over-year to $961.8 million, reflecting a healthy demand for its furniture products despite the adverse effects of external cost pressures [3][4].
Strategic Adjustments and Future Projections
Looking to mitigate the impact of tariffs, MillerKnoll adjusted its pricing strategies, implementing a 4.5% increase in list prices from June 2, 2025 [1][2]. This move is part of a broader effort to balance out potential revenue losses from tariffs, which are predicted to cost the company between $9 million and $11 million in the upcoming first quarter of fiscal 2026 [1][3]. Despite these challenges, the company projects its revenue for the next quarter to fall between $899 million and $939 million, showcasing its resilient market positioning [4][5].
Long-Term Outlook and Market Response
Amidst a complex geopolitical and economic landscape, MillerKnoll’s guidance for Q1 FY 2026 reflects a cautious optimism. The company expects to maintain earnings per share between $0.32 and $0.38, indicating a strategic focus on reducing operational costs while aligning with demand trends [4][5]. Analysts have noted the firm’s diverse brand range and innovation in design as key strengths that could support its recovery, as the company navigates continued cost challenges and anticipates easing tariff impacts in future quarters [5].