MillerKnoll, Inc. (NASDAQ:MLKN) Q3 2024 Earnings Call Transcript

Jeff Stutz: No, Andi, I think that’s right. Reuben to your question, I would caution you to read really anything into that. I mean, one of the things we have always prided ourselves on it at MillerKnoll is trying to be on our front foot and making sure that we are responding to the current market conditions that we see but also protecting the strategic investment parts of the business that we are confident are going to help grow the business top-line and profitability going forward. And this is I think you can look at this as an ongoing practice of that kind of housekeeping. I mean this was not a this was targeted as I mentioned in my prepared comments around the management ranks and it was not just a cost take out but it was also a simplification set of decisions.

I mean that Andi said it in her prepared comments, but I’ll just emphasize that the decisions around real estate, it would be wrong to think of that as purely focused on cost take out. This is about creating a much more compelling expression of the combined millennial brands in these major markets that we serve. So, it certainly is not all about cost and I mean, I guess, I’d leave it at that.

Reuben Garner: Sorry, I was on mute. Yes, that’s helpful. And then I guess this pricing sounds like it’s stable. Can you just talk about I know you’re coming into the end of your fiscal year, but maybe talk about it on a go forward basis the next kind of year? What’s left in the pricing actions that you’ve already announced? When was the last pricing action you announced? Do you need another one this year to keep up with inflation? Are you seeing your competitors announce them? I guess just kind of an update on price cost in this environment?

Jeff Stutz: Yes, Reuben, this is Jeff, and John please jump in. I would characterize where we feel we are as an organization is we’re kind of back to what I would say are more traditional, more ongoing annual price increases as a cadence. There are still inflationary pressures there nowhere near the level that we were seeing when we were having to do multiple price increases per year. Our last increase was last June. It will probably on that say roughly that same type of calendar schedule as we move forward and much more in line with kind of pre-COVID annualized price increase percentages.

Reuben Garner: And then, I guess last question, you kind of answered the share question. I think that was directed at the Americas side. My question is actually internationally the business seems to be holding up a little better. And in fact, it looks like the last quarter showing growth again. How much of that would you attribute to kind of maybe the benefits that there were between Knoll and Miller versus have you seen a stabilization in macro over there kind of quicker? I know it’s been a volatile situation, but just kind of thoughts on how things have transpired over the last 6 that I know?

Andi Owen: I’m getting the combination of all other things, really I think the great news about our international business is that it is very diverse. So if you still struggle in Europe, then you have China that’s beginning to wake up to offset that. So I think we have markets, as we mentioned over the last several calls, the Middle East, India, Asia and China starting to wake up that are really kicking in. And that stability has driven the business forward. And the one thing to remember too, Reuben, with the differences in our business in international and the Americas is that international is much more nascent and we are much more lightly penetrated. So, we have a lot of opportunity to grow market share and to expand markets to grow dealers.

And also Knoll is supplementing part of our product offer that we never had in Europe before. So, as we continue to transition Herman Miller dealers to MillerKnoll dealers, there’s momentum behind that. And as dealers begin to learn the products, there’s momentum behind that. So I would just say it’s really just a difference in the maturity of the markets and how we penetrate in the markets. And Jeff, what would you add to that?

Jeff Stutz: No, I think that covers it. I think it’s spot on.

Reuben Garner: And guys, I said I think I said last one, but I’m going to sneak one more in if that’s all right. Jeff, can you just maybe you said this, but just to restate it if you could. The order patterns that you saw throughout the quarter, can you walk through those, again? What kind of December, January, February look like? And then were those specific to, were those consolidated or did you break out Americas? And if you didn’t, could you talk about what you’re seeing in Americas on a month by month basis?