MillerKnoll, Inc. (NASDAQ:MLKN) Q3 2023 Earnings Call Transcript

Andi Owen: The last thing I would add, Jeff, is just you start to see synergy capture coming through that line as well. And as we continue to capture more and more synergies, we will also see about the margin is outlined. So yes, we are very pleased about that.

Reuben Garner: Alright. I’m going to speak one more in, a follow-up on Holly. So can you help €“ is that something that you are not able to do because of the developments with hermanmiller.com and internal kind of initiatives versus some kind of structural change? I just thought that Fully was offering something that maybe you guys didn’t have before or maybe it was just a whole didn’t. Can you kind of, I guess, dig into that a little bit more?

Andi Owen: Yes. It’s a great question, Reuben. So I think when Knoll acquired Fully, and I certainly can’t speak for that company back then, but it offers them a digital avenue to market that they didn’t have. We have that, and we have a very well-established one as well as a retail business. And so as we look across the organization and find redundancies it’s important that we address as we have a great retail channel to market. We have great Fully products. We don’t need the duplication that we’ve had. And although Fully is a small portion of our business, it has been breakeven to money moving at best. And so for us, and this was the right decision, and we can still maintain the great products. We can still bring them to market in a very meaningful way, and we don’t need to lose that, but we can lose some of the extra cost that was making it not a profitable equation for us.

Reuben Garner: Got it. Thanks, guys and good luck going forward.

Andi Owen: Thank you.

Operator: We will take our next question from Budd Bugatch with Water Tower Research.

Budd Bugatch: Good afternoon, Jeff. Good afternoon, Andi and the team. Congratulations.

Andi Owen: Good afternoon, Budd.

Budd Bugatch: Can you hear me, when I coming through?

Andi Owen: Yes. We can hear you.

Budd Bugatch: Okay, thank you. Congratulations on managing the margins in this. I think that’s impressive. And the difference is at least to my model, mostly center in the Americas, which I don’t suspect is a big surprise in terms of particularly the revenue. And I know, John, you said that the order patterns have started to improve. Can you at least put some quantification on that or are we looking at a positive orders year-over-year in terms of what you’re seeing in the last couple of weeks of the quarter and maybe the first couple of weeks of the next?

Jeff Stutz: Yes, Budd, this is Jeff. So what I would tell you is that we started the quarter lagging pretty €“ we were down double-digit percentage. We improved in January and February to single digit. The percentage still declined, but an improving trend line, and that has €“ it’s moved a little bit in the first couple of weeks of Q4, but nowhere near as low as it was to start back in December. So it’s still pressure, wouldn’t want to leave you with the wrong impression there. But that coupled with the fact that John, maybe you could speak to this a little bit. I think we’re getting some feedback by the way.

Andi Owen: Operator, are we returning some feedback on the line? Are you hearing that?

Operator: Yes, madam. I am hearing that.

Andi Owen: Thank you, Budd, can you hear?