MILLERKNOLL, INC. (MLKN) Risk Factors

Item 1A Risk Factors

The following risk factors and other information included in this report should be carefully considered. The risks and uncertainties described below are not the only ones we face; others, either unforeseen or currently deemed not material, may also have a negative impact on our Company. If any of the following occurs, our business, operating results, cash flows, and financial condition could be materially adversely affected.

Business Related Risks

We may not be successful in implementing and managing our growth strategy.

We have established a growth strategy for the business based on a changing and evolving world. Through this strategy, we are focused on taking advantage of the changing composition of the office floor plate, the greater desire for customization from our customers, new technologies, and trends towards urbanization and working from home.

While we have confidence that our strategic plan reflects opportunities that are appropriate and achievable, and that we have anticipated and will manage the associated risks, there is the possibility that the strategy may not deliver the projected results due to inadequate execution, incorrect assumptions, sub-optimal resource allocation, or changing customer requirements.

To meet our goals, we believe we will be required to continually invest in the research, design, and development of new products and services, and there is no assurance that such investments will have commercially successful results.

Certain growth opportunities may require us to invest in acquisitions, alliances, and the startup of new business ventures. These investments, if available, may not perform according to plan and may involve the assumption of business, operational, or other risks that are new to our business.

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Future efforts to expand our business may impact our ability to compete for business. It may also put the availability and/or value of our capital investments within these regions at risk. These expansion efforts expose us to operating environments with complex, changing, and in some cases, inconsistently-applied legal and regulatory requirements. Developing knowledge and understanding of these requirements poses a significant challenge, and failure to remain compliant with them could limit our ability to continue doing business in these locations.

Pursuing our strategic plan in new and adjacent markets, as well as within developing economies, will require us to find effective new channels of distribution. There is no assurance that we can identify or otherwise develop these channels of distribution.

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; and

•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.

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Macroeconomic and Workplace Trends Related Risks

Adverse economic and industry conditions have had a negative impact on our business, results of operations and financial condition.

Customer demand within the contract furniture and retail furnishings industries is affected by various macroeconomic factors with general corporate profitability, service sector employment levels, new office construction rates, and existing office vacancy rates being among the most influential factors. Continued declines in these measures over recent years have had an adverse effect on overall furniture demand. Additionally, factors and changes specific to our industry, such as developments in technology, governmental standards and regulations, and health and safety issues, can influence demand.

The markets in which we operate are highly competitive and we may not be successful in winning new business.

We are one of several companies competing for new business within the furniture industry. Many of our competitors offer similar categories of products, including office seating, systems and freestanding furniture, casegoods, storage products, as well as residential, education and healthcare furniture solutions. Although we believe that our innovative product design, functionality, quality, depth of knowledge, and strong network of distribution partners differentiate us in the marketplace, increased market pricing pressure and other factors could make it difficult for us to win new business with certain customers and within certain market segments at acceptable profit margins.

The retail furnishings market is highly competitive. 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. Some of our competitors have significantly greater financial, marketing and other resources than we possess. This may result in these competitors being quicker at important metrics such as adapting to changes, devoting greater resources to the marketing and sale of their products, generating greater national brand recognition, or adopting more aggressive pricing and promotional policies, including free shipping offers. In addition, increased catalog mailings and/or digital marketing campaigns by our competitors may adversely affect response rates to our own marketing efforts. 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.

We have significant manufacturing and sales operations outside of the United States. Concerns exist relating to imposed and potential tariffs and customs regulations and the potential for short term logistics disruption as any such changes are implemented. This will impact both our suppliers and customers, including distributors, and could result in product delays and inventory issues. Further uncertainty in the marketplace also brings risk to accounts receivable and could result in delays in collection and greater bad debt expense. There also remains a risk for the value of the British Pound, Danish Krone, and/or the Euro to further deteriorate, reducing the purchasing power of customers in these regions and potentially undermining the financial health of the Company's suppliers and customers in other parts of the world.

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We have manufacturing operations in the United Kingdom, China, India, Italy, Canada, Mexico and Brazil. Additionally, our products are sold internationally through controlled subsidiaries or branches in Canada, the United Kingdom, Denmark, Italy, Korea, Mexico, Australia, China (including Hong Kong), India, Brazil, and other European countries. The Company's products are offered in Canada, Europe, the Middle East, Africa, Latin America and the Asia/Pacific region primarily through dealers and retail channels.

Doing business internationally exposes us to certain risks, many of which are beyond our control and could potentially impact our ability to design, develop, manufacture, or sell products in certain countries. These factors include, without limitation, political, social, and economic conditions; global trade conflicts and trade policies; legal and regulatory requirements; labor and employment practices; cultural practices and norms; natural disasters; security and health concerns; protection of intellectual property; and changes in foreign currency exchange rates.

In some countries, the currencies in which we import and export products can differ. Fluctuations in the rate of exchange between these currencies could negatively impact our business and our financial performance. Additionally, tariff and import regulations, international tax policies and rates, and changes in U.S. and international monetary policies have had, and are expected to continue to have an adverse impact on results of operations and financial condition.

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. Accordingly, our ability to access the capital markets could be restricted at a time when we would like, or need, to access those markets, which could have an adverse impact on our flexibility to react to changing economic and business conditions. The resulting lack of available credit, increased volatility in the financial markets and reduced business activity could materially and adversely affect our business, financial condition, results of operations, our ability to take advantage of market opportunities and our ability to obtain and manage our liquidity. In addition, the cost of debt financing and the proceeds of equity financing may be materially and adversely impacted by these market conditions. The extent of any impact would depend on several factors, including our operating cash flows, the duration of tight credit conditions and volatile equity markets, our credit capacity, the cost of financing, and other general economic and business conditions. Our credit agreements contain performance covenants, such as a limit on the ratio of debt to earnings before interest, taxes, depreciation and amortization, and limits on subsidiary debt and incurrence of liens. 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.

Manufacturing, Supply Chain and Distribution Related Risks

We expect changes to U.S. 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, 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. The U.S. 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, 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

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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.

We rely on outside suppliers to provide on-time shipments of the various raw materials and component parts used in our manufacturing and assembly processes. The timeliness of these deliveries is critical to our ability to meet customer demand. Disruptions in this flow of delivery may have a negative impact on our business, results of operations, and financial condition.

Increases in the market prices of manufacturing materials may negatively affect our profitability.

The costs of certain manufacturing materials used in our operations are sensitive to shifts in commodity market prices, including the impact of the U.S. and retaliatory tariffs. In particular, the costs of steel, plastic, aluminum components, and particleboard are sensitive to the market prices of commodities such as raw steel, aluminum, crude oil, lumber, and resins.

Disruptions within our dealer network could adversely affect our business.

Our ability to manage existing relationships within our network of independent dealers is crucial to our ongoing success. Although the loss of any single dealer would not have a material adverse effect on the overall business, our business within a given market could be negatively impacted by disruptions in our dealer network caused by the termination of commercial working relationships, ownership transitions, or dealer financial difficulties.

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

A shortage of qualified labor could negatively affect our business and materially reduce earnings.

The future success of our operations depends on our ability, and the ability of third parties on which we rely, to identify, recruit, develop and retain qualified and talented individuals in order to supply and deliver our products. Any shortage of qualified labor could have a negative impact on our business. Employee recruitment, development and retention efforts that we or such third parties undertake may not be successful, which could result in a shortage of qualified individuals in future periods. Any such shortage could decrease our ability to effectively produce and meet customer demand. Such a shortage would also likely lead to higher wages for employees (or higher costs to purchase the services of such third parties) and a corresponding reduction in our results of operations.

Financial Related Risks

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

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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.

We have a substantial amount of goodwill and indefinite-lived intangible assets, primarily trademarks, on our balance sheet. We test the goodwill and intangible assets for impairment both on an annual basis and when events occur or circumstances change that indicate that the fair value of the reporting unit or intangible asset may be below its carrying amount. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding actual and forecasted revenue growth rates, operating margins, discount rates, and royalty rates. Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units, declines in projected revenue for our trademarks, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital, or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable. 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.

Our long-lived asset groups are subject to an impairment assessment when certain triggering events or circumstances indicate that their carrying value may be impaired. If the carrying value exceeds our estimate of future undiscounted cash flows of the operations related to the asset group, an impairment is recorded for the difference between the carrying amount and the fair value of the asset group. The results of these tests for potential impairment may be adversely affected by unfavorable market conditions, our financial performance trends, or an increase in interest rates, among other factors. 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.

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 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

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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.

We have established and publicly announced sustainability goals. These goals include science-based targets for the reduction of Scope 1, 2 and 3 greenhouse gas emissions. Our ability to achieve any stated goal, target or objective is subject to numerous factors and conditions, many of which are outside of our control. Examples of such factors include evolving regulatory requirements affecting sustainability standards or disclosures or imposing different requirements, the pace of changes in available materials and technology, as well as the availability of suppliers that can meet our sustainability and other standards. We may incur significant costs as we work to implement our sustainability goals, which were announced fiscal year 2025, which include efforts to reduce our carbon footprint.

Furthermore, standards for tracking and reporting sustainability matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from other companies. Methodologies for reporting these data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. 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, 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. We operate and have manufacturing facilities in multiple regions across the globe, and the impact of additional regulations in this area is likely to vary by region. It is expected the costs we incur to comply with any such final regulations and execute on our own sustainability goals could be material.

Government and other regulations could adversely affect our business.

Government and other regulations apply to the manufacture and sale of many of our products. Failure to comply with these regulations or failure to obtain approval of products from certifying agencies could adversely affect the sales of these products and have a material negative impact on operating results.