It was a rough morning for MillerKnoll Inc. (MLKN). The furniture and design company's shares took a nosedive, dropping over 18% in Thursday's premarket after delivering a quarterly earnings report that investors found distinctly uncomfortable.

The core numbers from the third quarter of fiscal 2026 just didn't measure up. Net sales came in at $926.6 million, which was a 5.8% increase from a year ago but still fell short of the $942.0 million analysts were expecting. The story was similar on the bottom line: adjusted earnings per share landed at 43 cents, missing the consensus estimate of 45 cents.

Digging into the segments, the picture was mixed. The North America Contract business saw revenue rise 4.4% to $488.6 million. International Contract did a bit better, growing 7.8% to $156.9 million. And the Global Retail segment climbed 7.1% to $281.1 million. So, growth was happening everywhere—just not quite enough of it. On a brighter note, total orders were up 9.2% year-over-year to $931.6 million, showing demand is still there. The company's financial cushion looked okay, too, with $594.0 million in cash and available credit as of the end of February.

But the real reason for the market's sour mood was the look ahead. For the current fourth quarter, MillerKnoll's guidance came in soft. The company expects net sales between $955 million and $995 million. The midpoint of that range is well below the Street's expectation of $993.2 million. More strikingly, it guided for adjusted earnings of 49 to 55 cents per share, which is notably below the 61-cent consensus.

So, what's going on? The company pointed to a few specific headwinds. The most significant is a direct $8 million to $9 million hit from the ongoing conflict in the Middle East. The impact comes from limited shipments into the region and higher logistics costs to work around the disruptions. On top of that, the company expects to spend $3.5 million to $4.5 million on new store investments, with three to four openings planned for the quarter. The company did note that incremental tariff costs should be offset by previously announced price increases.

In the face of all this, management struck a tone of determined optimism. "Despite ongoing macroeconomic and geopolitical uncertainty, as well as weather-related impacts during the quarter, our team remained focused on disciplined execution and operational priorities within our control," said President and CEO Andi Owen. "We remain well positioned to drive profitable growth and create long-term value across our collective of brands through sustained revenue growth, margin expansion, cash generation and shareholder returns."

Investors, however, were focused on the near-term math. The combination of a miss, a weak guide, and a clear, quantifiable impact from geopolitical strife was too much to overlook. MillerKnoll shares were down 18.38% at $15.80 in premarket trading.