MillerKnoll Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Reuben Garner - The Benchmark Company, LLC - Analyst : Thank you. Good evening, everybody. Nice to see some more positive trends of that growth inflection. Andi, you referenced investments on the commercial side. I think it's the first time in a while, and I know obviously, you're always investing. Wondered if you could elaborate into maybe dollar amounts where exactly those investments are going and what are targeted at for growth in this coming year?

Question: Reuben Garner - The Benchmark Company, LLC - Analyst : Great. Sorry. I was on mute at the end of the first part. So, Jeff, you mentioned gross margin. The performance in the quarter, obviously, is very strong. I was wondering if you could talk about within that guided range you gave for this year, what kind of range you're looking at from a gross margin perspective. And if you could break us down a bridge of what the pieces are because I know you've got a lot of moving parts the last couple of years with price cost and cost-outs and synergies leftover from the Knoll deal. If you can kind of give us an updated look of all that.

Question: Reuben Garner - The Benchmark Company, LLC - Analyst : Okay. And one last quick one from me. Retail margin is very strong in the quarter despite what kind of seems to be a depressed environment. Anything unusual from a mix standpoint or otherwise that led to that strength or is that a reasonable baseline kind of build off of as volume recovers?

Question: Reuben Garner - The Benchmark Company, LLC - Analyst : Yes, that's right.

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Good afternoon. Just wanted to follow up on the margin outlook for next year, what's assumed in the guidance in terms of maybe some of the incremental growth investments you outlined earlier, Jeff. How much of a detraction from margins or maybe some of those incremental investments you're planning on making in '25 versus what you spent in '24? How much is that expected to detract from margins just because the guidance implies like maybe a little bit lower margins than I was looking for based on the revenue?

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Okay, thanks. And then --

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Okay, thanks. That makes sense. And you talked a lot about the, I guess, the dealer initiatives you have internationally. Could you just give us maybe an update on where you are at domestically in terms of bringing the dealer network together? I'm assuming it's been completed for a while, but I'm more looking for, do you feel like the channel is operating to its full potential yet? Is there still kind of learning curve that needs to happen to bring the dealer -- domestic dealers up to speed? Like, where are you at in terms of realizing the full benefit of the integrated dealer network domestically? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 9:00PM, MLKN.OQ - Q4 2024 MillerKnoll Inc Earnings Call

Question: Greg Burns - Sidoti & Company, LLC - Analyst : Okay. Thank you.

Question: Brian Gordon - Water Tower Research LLC - Analyst : Hi. Thank you for taking my call today. Budd apologizes for not being able to make it on the call. He's traveling today. And congratulations on especially the strong margin performance this quarter. I guess my question is have you seen any evidence that return to work has plateaued or maybe reaching equilibrium at this point? Or do you think that there's any evidence that we could see some increases from here, both in North America and internationally? And then my follow-up to that would be when you're talking with customers, are you seeing any sort of trends in terms of like space per employee or spend per employee that's changed with hybrid work over the past couple of years?

Question: Brian Gordon - Water Tower Research LLC - Analyst : Great. Great, thank you. I did have a second question on the retail side of the business. Have you guys broken out any sort of guidance over the longer term on like what percentage of the retail network is going to be Design Within Reach versus the Herman Miller stores?

Question: Brian Gordon - Water Tower Research LLC - Analyst : Great. Thank you very much.

Question: Brian Gordon - Water Tower Research LLC - Analyst : Well, thank you for that.

Question: Alex Fuhrman - Craig-Hallum Capital Group LLC - Analyst : Hey, guys, thanks very much for taking my questions. Last quarter, you talked a lot about on the contract side having a lot of projects in your sales funnel that were pretty far along in the process but hadn't yet turned into orders. Can you talk a little bit about how that pipeline of projects look today? And are those leads progressing through your funnel as you'd expect it?

Question: Alex Fuhrman - Craig-Hallum Capital Group LLC - Analyst : Okay. That's really good to hear. Thank you for that. (technical difficulty) it's been obviously a tough couple of years in a row now for consumer furniture buying. The business sounds really healthy and profitable of (technical difficulty) that weak demand. What are you expecting this year in terms of consumer demand? And with the holiday season just a couple of quarters away now, is there an expectation that this is going to be another tough year for the consumer when it comes to furniture?

Question: Alex Fuhrman - Craig-Hallum Capital Group LLC - Analyst : Okay. That's really helpful. Thank you all very much.