MillerKnoll, Inc. (NASDAQ:MLKN) Q1 2024 Earnings Call Transcript

Jeff Stutz: That is correct. Nor do we have necessarily plans to announce them so. Again, we’ll react to business conditions as we move through the balance of the year.

Budd Bugatch: Understood. Okay. Thank you very much. I’ll let others proceed. Thank you.

Jeff Stutz: Thanks, Budd.

Andi Owen: Thanks, Budd.

Operator: Your next question comes from the line of Greg Burns with Sidoti. Your line is open.

Gregory Burns: Good afternoon. In North America now that we’re nearing the end of the integration process, how has the consolidation of the dealer networks gone? Are we at the point now where they’re fully up to speed and generating the level of productivity that you would expect them to? Or is there still a level of learning curve that they need to move up to sell the full portfolio of products? Thanks.

Andi Owen: Yes. I mean I would say, overall, Greg, we’re very pleased in North America with the pace at which our dealers and our dealer designers have learned all the product lines from the corresponding legacy companies. But I’ll let John add some color to that.

John Michael: Yes, I think we are really, really pleased with the way the network has come together. We had just last week 22 of our largest dealers in West Michigan, 11 originally from the Miller side, 11 from the Knoll side. Honestly, you couldn’t tell who came from which camp, right? They really have meshed extremely well together. Obviously, there’s a learning curve to learn the new products. And I would say if I characterize our FY’23 that learning curve, we probably started up it a bit more slowly than we expected, but we finished much stronger than we expected. We really picked up a lot of momentum throughout the course of the year. And I think we exceeded our expectations in terms of what we would call cross-sell legacy Miller dealers selling no products and vice versa. So that’s — we’re really pleased with the way the networks come together.

Gregory Burns: Okay. Great. And then I understand the kind of the macro issues impacting some of the international markets. Can you just talk about what the opportunity is there to sell that — the broader portfolio? I know you’re adding dealers, but how far along are you in addressing that opportunity longer term? Are we still in the very early innings? Are we not really seeing much of that yet? And is there potential for you to offset maybe some of the macro challenges that you’re seeing here with some of these organic growth initiatives?

Andi Owen: Yes, Greg, you took the words out of my mouth. I would say that we focused our attention on North America to begin this process so that we could learn it’s also our largest business. And we’re now focusing on international. So we are just beginning this process. We’ve converted dealers. But as far as rationalizing product, learning product specs continuing to convert dealers. We see a lot of runway and opportunity, particularly in selling the Knoll — Studio Knoll ancillary products throughout the world. So we have a long way to go there, and we’re actually pretty excited about what it can offset. So more at the beginning of the process internationally.

Gregory Burns: Okay. Great. And then — go ahead.

Andi Owen: [indiscernible] had very limited contract dealers in the past. They really focused primarily on the interior design and retail wholesale customers. So opening up that product line to contract dealers is a new effort, and we’re excited about that. Anything you would add, Jeff?