MLHR - Earnings call transcript Q3 2019

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Operator

Good afternoon, and welcome to Herman Miller's third quarter earnings conference call.

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Kevin Veltman, Vice President of Investor Relations and Treasurer.

Kevin Veltman

Good afternoon, everyone.

Joining me today on our third quarter earnings call are Andi Owen, our President and Chief Executive Officer; and Jeff Stutz, our Chief Financial Officer.

press our today's at Relations posted hermanmiller.com. have release Investor on website We

figures today to we'll a of website. can that Some the on accessed cover a file We've the the also be in non-GAAP reconciled are comparable amounts GAAP non-GAAP supplemental that basis. on presented

Before everyone this we remarks, will call remind our will prepared include begin I that forward-looking statements.

statements, last press that could our quarterly differ we as these our session. forward-looking Q&A to release as cause materially earnings prepared a the issued results factors please actual on annual to information SEC night the For well filings. remarks, we refer conclusion have from and will At of

three With to Andi. minutes turn will ask to limit over that to today's that, the for call callers than questions allow to all I to We time limit will participate. XX and their more call no

Andi Owen

the a on I'll progress by Good strategic that, on our you our afternoon and priority. on thank for call quarter, joining us begin picture few After and thoughts current I'll macroeconomic third today. some sharing our for results the perspective call results. the $XXX and sales to turn same the for provide Kevin year higher higher a quarter X% million X% quarter than Consolidated the were at organically. our on last Jeff more information basis to on over financial and reported

ELA organic the New our million continued of and growth order broad-based led growth totaled X%, business. orders strong from reflected quarter from business in and our double-digit by performance $XXX consumer

first in reporting This nine gross the quarters. year-over-year quarter, time margin for expansion we're

the we combined EPS and reported over XX EPS X.X%, of Sales a and increase reported quarter an well work We've of basis, adjusted $X.XX last basis during operating year. of margin was growth, basis which XX% $X.XX, the margin of same an year. quarter. On reflected last GAAP than gross on gain to points increase to adjusted optimization traction. Our price higher profit deliver latest managed operating expenses that expanded began

relatively the trade and fundamentals positive measured with industry mixed stock surrounding robust months. uncertainty global rise positive. levels by underlying geopolitical While BIFMA, our over is growth market North contract broader have architectural in remain recent to Service has Brexit, and volatility, tensions the space the environment is market XX billings employment sector consistent past XX continues been and past for months. remains been America

tariff occurring on was In over as level January the two were China, architectural goods that the reading XX% We're negotiations and US March between encouraged in the from also be deferred to fact, in China for imported the second in billings US years. increases progress appears highest for time. that trade proposed the to were scheduled

remain and highlights to few on I'd from our to share continue laser-focused teams the like a key quarter. Our initiatives,

entire representation North of growth. the exclusive of to global collection. Milano to showcase portfolio sofa recent Our ease of immoveable quarters America year. expectations show deliver the variety our well. of introduction This readily We're powerful the system theme will Within upcoming the be has and demonstrate to year, of of portfolio. we in this Show Miller performance Group, gearing international design of designs been up this Cosm in the Cosm Design of June. will to Miller and official April desking innovation mission are pipeline our as chair, accelerate ahead was Trade office also family this modern leading positioning a reach our NeoCon Each brands. Week Herman [Lispenard] Herman the pacing The the of With its for high us the the our accessible, brand regions launch and community Canvas enclosure Reach of expanded Design Overlay designs across our all make launched quarter Vista launches the authentic this active its system with

is Our and growth business North including our distribution HAY license of year, rights imperative. equity investment the existing American both the the and important an in investment this

This contract and key the term groups so range furniture months we product Four critical HAY about to also quarter an in made popular established for line. retail great many of our localized ahead. to North chair serve progress have been customers. the products, in working positions HAY we're We've product far, of localizing products localize including inventory our near America additional which

a organization my to do become of focus Herman to customer-focused here push both with early One our been the more dealers business to at and Miller areas customers. easy and eyes of of has throughout the

many in steps significant new opportunities key the organization of development see rollout areas, digital tools and some improvement is I dealer our us ahead the this forward in taking area, network. for for of While already including

we the new critical users. America with North During quarter, specification be in design reached for mass released our XXX to tool dealer active and

months, further Certified developed dealers customers. user time Network. of Dealer Resource Miller customers customers completed our and for benefits tools our and seamlessly brands will will improved be dealers helps recently associates improve to of the bring select the and coming much same digital across to our our more In regions introduced a response dealers For X,XXX experience. our products the rollout visualize international tool also be Herman collection global This our integrated across Library, to family of we've a and with our entire our across over

progress revenue strong of and scaling business. quarter order consumer growth is evidenced Another in our of further

much expanded home higher by We furnishings platform. rest driven comparable the across industry, than see brand of both growth multi-channel footage the and growth our square to continue

brand straight For quarters comparable Design growth. Within quarter Reach, this XX reflects of

opening several Upper will North and in Charlotte, the in Side be a repositioned studio fourth California, market. We the West Ohio, the in New exciting quarter, in [Louisville] York studios Carolina Reach Design Within also

We in we we other to long North growth the objective channels initial operating channels last confident as HAY, stages to studios, business for and target Our America in introducing the in our business. new into quarter. North consumer the path in of remain are margins launch to, lag the our of our lean following this investments America. HAY the consumer-focused HAY brand Related term

North around two early the While in website the pipeline developing to there America of North traction. on the our studios few HAY began Chicago next with in locations to for fiscal in as America and the HAY focused America studios days, was HAY first future North the at now next they open gain We're in both scheduled excitement year. beginning

first completed Finally, we've profit we our and work. remain focused this phases of optimization on largely two

American phase up, million North estimated initially million and between benefit. we our As of $XX $XX ramped

team this our between annual be will the have continue to customers been to in months with play we my past over in and capabilities the and and and few see driving win our million. operating for As expansion. margin initiative spaces expectations us. run These the deeply million months, our next evaluating benefits and a to key provide required implementation strategy over plan, the $XX we our we In considering benefits revised I of engaged opportunities of realized continue to growth trends work closing, accelerate role $XX in for XX key rate ahead

our results that work, where X more more date the soon. New will to that for free turn on a As save provide feel details we're I May team for to look Jeff showroom, my to on events going some review held investor With and Please planning the provide strategy financial and perspective at I'll over of York deeper the overview, our part of priorities forward. quarter. and to call this

Jeff Stutz

GAAP of on Andi, sales same a above recognition X% in and quarter afternoon year. foreign X% net after the quarter you, year revenue of the third changes good this Consolidated year-over-year $XXX last Thank impacts everyone. currency organically adjusting up basis and adoption the of earlier the rates in million for rules new fiscal were and

a period from Within American our were $XXX were in increase year. last last X% of the an year flat above year North third with segment, last the reported basis X% in essentially orders organically. sales and quarter, representing million on New

orders New North geographic in and and order by in organically the increases last $XXX regions year. X% medium Western a quarter the US. coming was were sized The basis Eastern growth this large the over America with quarter, projects, X.X% reported of from on up million and led

of $XXX on an year million organically. Our and XX% up reported in increase last to the basis compared sales ELA reported of XX% segment a third quarter,

a orders New for XX% the quarter approximately same a over growth on ago GAAP million, year representing $XXX totaled organically. XX% and basis

and basis from prior was a As the the demand specialty and growth segment was in China, the levels in this more quarter an within UK increase growth by performance particularly difficult Mainland on was related a year and third reported business of India, X% strong $XX The million, XX%. as year were Mexico Brexit uncertainty year the had East, ELA last Europe X% lower our than Middle comparison, performance last quarter the order order growth Sales led year-over-year organically. in as the same offsetting persists. organic to

quarter were in the up the New of Maharam million and Miller quarter than last for and X% Collection. The Herman reflected this in increase orders growth orders organically. year X% $XX Geiger, higher

reported year. of quarter quarter the last the million, sales segment business XX% consumer from in $XX Our increase of an same

primarily quarter. year in We brand, to as new quarter $X on general changes relative the net currency a Consolidated headwind New last ago perspective, results outlet also of was of the sales rates this the orders channels. e-commerce, were estimate in quarter These third growth the dollar the a the HAY consolidated were translation impact an year. sales for margin contract the was From the period. quarter currency gross studios year-over-year growth in XX.X%. million driven as XX% to ahead had of U.S. unfavorable impact from of level $XX and million by well same from translation and strengthening

start Excluding XX of from rules points new quarter points margin was approximately above basis revenue the recognition impact fiscal adopting current basis same at of XX our last year, gross year. the

classified within the of XXXX, reminder, fiscal a at that sold net previously payments beginning as guidance to reduction now starting the of under dealer sales. expenses As certain as cost goods a were record new we

profit prior year on $XXX charges, While production the profit zero by special million margin benefits. year volumes, million year in dollars, Operating was this included on compared optimization expenses gross By and reduces channel mix ago period. in compared higher and product gross charges. comparison, the transition leverage current to included shipment CEO gross impact of percentage The of manufacturing third to it last quarter costs. margin The expansion $X with our classification has were driven million reported the primarily associated year. $XXX,XXX $XXX special

UK these of increase earnings by and expansion. third XXXX. are GAAP Both of Restructuring quarter these the contract and continue Excluding basis, to charges new of benefits retail and lower up year-over-year expenses improved our related period. business projects reported we selling a and and the business the operating in in studios to for from million consolidation occupancy, in facility was started consumer year the $XXX,XXX staffing of driven the earnings On previously on announced primarily of operating ago related schedule marketing that China. realizing in remaining of efficiency and $X items, ramp million projects variable recorded expenses higher to costs million first progressing quarter $XX $XX this compared in will we've fiscal to half both

third quarter earnings operating charges, in quarter in quarter operating we've third tax US the million last income Jobs in and net The $X.XX X.X% $XX million million the XX.X%. basis this Cuts Act. same And, sales $XX the related per third quarter at sales. adjusted comparison, current of adjustment, finally, the of Excluding reported of on earnings in Exclusive rate compared totaled quarter adjusted the the to of $XX true to restructuring a the period or was or effective of adjustment the Tax million quarter impact rate and $XX of adopting share of the the an $X.XX other share XX% the rate per a was or or final effective X.X% in year. up And year. special and include by were last this diluted

in per of the of third totaled share other last compared earnings quarter adjusted earnings this of per to impact items, adjusted share year. quarter $X.XX Excluding $X.XX and diluted restructuring the

over So, turn flow to that, Kevin will who balance and the an with call on our sheet. us update I'll cash give

Kevin Veltman

of quarter. were flows operations equivalents level Thanks, We was cash consistent with the last cash million, the ended with of over quarter increase and hand million in quarter quarter in million which third were Capital an $XX XX% Jeff. generated expenditures the quarter from cash last million, $XX same Cash total in the year-to-date. the of on the $XXX reflecting of million $XX and year. $XX

was the the $X for that shares gross $XX we We end paid million the XXXX, covenants $XX million capital The quarter we've compliance Cash at debt-to-EBITDA fiscal stood with of on our available of at credit quarter repurchased our in For end $XXX dividends X:X. million the were $XX anticipate in ratio capacity facility and full as bank million quarter. all and during of remain the quarter. expenditures year. of to million approximately

Given the operations capacity, from our business ongoing and current of cash total flow meet well balances, positioned we cash remain needs the forward. financing to moving borrowing

I'll our over sales Jeff that call turn the cover back of now the update, guidance XXXX. fourth quarter For and to fiscal earnings to for

Jeff Stutz

you, thank Okay, Kevin.

fiscal the midpoint of So million. forecasts, $XXX of range this same approximately X% to fourth the with in million to quarter XXXX of The anticipate range organic respect to compared quarter implies fiscal last increase revenue between the $XXX year. we sales and an

our described points. quarter the course, range I approximately approximately between recognition and million and forecast standard and $X.XX share by which XX We per be $XXX our the for last for between the year-over-year XX million. forecast XX% quarter in to next of of impact XXXX, and in expenses XX.X%. than fourth of this adopting quarter XX%. lower anticipate fiscal margin range and to expected impact rate consolidated assumed the from tax to Adjusted estimate, expect XX.X% compared We in third is are Operating gross quarter higher between the earnings costs This reflects midpoint new between as effective quarter steel to fourth comparability improvement This margin and is earlier, $X.XX $XXX year. revenue the the initiatives. basis includes benefits sequentially the fourth profitability basis points gross period, change,

and back So over call your with the that we'll to overview, operator questions. I'll the take turn

Operator

Thank line And James. you first with [Operator comes of from Budd Instructions]. our Bugatch the Raymond question

open. now Your is line

Budd Bugatch

that, North year, Organically, just bit color afternoon. Good flat of cut was you give on it chase. for A America, you on the question little or... through a can year-over us Andi

Jeff Stutz

a little you if jump provide if Andi understanding, color in and add. have to then I'll something you having

yeah. So,

year-over-year, back they how really orders second to paid flat versus factor organically play. related paid largest a were The the to we Budd. this factors the way So There's quarter that couple really going quarter.

we orders QX, to contract the more saw loaded order loaded, that of in American You period go back entry or front-end was business those for fairly North translate more front-end so of quarter that had And revenue in factors, the we of increase a we had period. have was two this to -- particular kind this opposite price where announced. effect because that

in of well And were out so we had long-dated pushed some weighted orders that general, so quarter as just entry. in as, and back-end order the came just and more

more issue. So timing it a was

toward a that estimate the is would and The million the in range. prepared the have impacted million that $X I my between upper-end the thing other impact guess happened revenue as and on add view we our government negatively and of mid-quarter, be didn't federal somewhere in comments that best be shutdown would $X our to would of tune of

Budd Bugatch

and where will see [Indiscernible] from backlog where on going quarter fourth in go you're thinking there America? book to the and North order just was the to I come

Jeff Stutz

on think, few I just so Budd, general, level backlog, our maybe in a the that. -- backlog to comments

So total year-over-year. revenue by margin, This, drop and I backlog as revenue adoption. is think with recognition impacted XX% gross our

backlog the through that a of And those is XX% into to on so you seems growth effect. that the adjusted impact you when to of result, for to whole dealer rattling that payments be as And, take adjust an kind the basis, need closer P&L. adjusted

that this the think business It I guide number X% I first out come the in contract growth part for our fairly of the even again, are order starting kind point. total, and So that's the close implies year of think I that actually the fiscal and range. QX in here in in as saw X% American an mentioned, expected the implies that is push but order somewhere to well. orders quarter, into longer of patterns the a of came just dated, as we And North

Budd Bugatch

So for North revenue that's America? fourth for quarter guess your

Jeff Stutz

me be, to in order keep what that here, would be that X% Kevin, -- we'd Yes, that total, would I be and I America of than order. now. better maybe a be organic think, on would magnitude North that contract honest little But on up, it's expect think

Budd Bugatch

and in bit flavor and studio you us a there? then what earnings, us give a didn't going And little DWR revenues help of and I just the said, was the consumer about can the you on going you think said of give catch business, what on that? I well, quite

Andi Owen

where think grow I straight revenue margins I they're business growth. standpoint, Budd, still biggest exactly XX very talk while about we've the rev we quarters kind seen respectable, strongly since line, of not I number a think would are top one continued been very here, from The is mean, the like And in I've to we've them ship a the which to reasons. in that be continues of is ship consumer one out. to and the for free of

put a I underestimated, change year, think around this in plan we our as behavior amount shipping. free customer we the the of

had investing to we've that ding little our profitability. see bit also a again of so, us We've on a bit quite react bit to information little that's of to growing. in give And been -- a

expense in expand build HAY America, So studios. marketing the brand North there's the as as we we

this us. quarter, So now amount which we have large four DWR a is pretty studios opening actually for

pre-opening HAY as have for opened. expenses two studios you well those we've as the So

I center we're on working pleased with very and say along a unforeseen of of will around we've with right into go in profitability need with storage our very we merchandise, continue we're we consumer this way growth growth had order think shipment had facility. our great with that revenue a and the I expenses now. as the better. business and that larger will focused So, we to that relocating the we're along and seeing profitability investment improving distribution growth, in we're in revenue process QX, we've We're mode get from see our and quarter so some

the we expenses of will to a level anything out we to bit. we that? add After Would head next you that see couple transfer. that, quarters as the next see related So some in DC year, into should

Budd Bugatch

in gross expenses expenses right. are operating numbers my of the operating and $X.X gross see the level. was are twice if did up margin million nearly roughly We're with I of level Well, twice like gross up growth $X.X profit operating we not million, -- number was grow

So...

Jeff Stutz

So a Budd and get basis I higher color I'll back it. But expenses. revenue, freight we're if net impact don't points. more the margin maybe -- level, if come Andi of little said, then question, shipping had just so gross more lower freight don't I down free hit XXX it to And as we this about and at the

thing gross the business, increase We and in the as in for have of to large And the call, increased would had mix. some a to we that project costs so storage, just we for launch I a our and some impact cost. are some, and margin our storage was DC higher give project segment. drove diluted temporal we cover improvement consumer running the are of our offsite build other contract had us space ahead of just for to related should margins do that HAY this interim a here, in our capability is quarter move, an HAY moving through contract bay launch content that, -- had particular we I high needs, this it it gross the We then that much inventory or the will -- that say. distribution we to with distribution ability house larger But

mix, same it happened last this Now, to representative term the that's but a is something affect actually the quarter think for well it as that of happened quarter same us to affect bit longer to and not us we little -- project.

I'd when in in expenses, it that put amount a-third question if operating of shift of And gross to factors third you those When accounted the lease stores, that your basis you when as, line operating HAY that launch together, this it, have the its straight of margin. marketing basis of things; all behind that the have increase each probably big couple well but I and gets shift we to no was XXX operating we those these points on we and that, related Budd, to occupancy the stores those we expenses, declining is for hard I these you booking about all possession to the frustrating fair cost a it's so decline. revenue is hit So peg can a on new had say we of accounting new or opening throughout because and change that it incurring quarter, we're as of have costs, therefore that the we're a it, have in but this quarter. part have the drivers

year-on-year So that's a well. big the driver as of

Andi Owen

to pre-opening Jeff's large add quarter larger the point, us, so to And unusually opening for normal. in four is a stores than expenses load an are

Operator

of Thank Steven from the line question you. comes Research. Thompson And with next Ramsey our

Your is now open. line

Steven Ramsey

rate, consumer, that year a guess about on play down on your And step to and Thinking in or the were ease investments? again even a back how of should operating go business? basis, pretty if you theory, sales of internally at back move I out capital you investment in the significantly more or invest continuing and next cost there high to measuring up would growth if a this we mid-teen return qualitative over on and you at are investments, maybe OpEx double-digit growth see two? think were, in on sales And outlook to up continuing margins rate see pull we about to

Jeff Stutz

has the the we're those right. factors better putting here, balance to sure some you Herman give that me answer believers right, in probably but conversations it to been to get the trying it's of slow new our has maturity. consumer we're kind this in you interesting of are value to adding that never traction place store, catch having, to studios And to you're is heard in that I'm take from us before, but a because a just seem know the Steven, can big long profit always I to mode when we to qualitative new and you're seeing on and The -- layering need let Andi on question, this just overhead So, benefit to this of immature in mode this that and have a thoughts the earlier walk, we're and Miller, up shareholders. through you strategic see of leveraging Budd's these business studios. you're ramp we don't business revenue of continue in new in you've growing when be the overhead up And time term strike

one -- is it's it's question about. that talked and great your a we've So one

Our we're to invest. right-minded belief to continue is,

You're next new to year. in not stores see DWR that us going heavily invest

that's can this along And meaningful to that, on enterprise. with over the to growth. years, So expect digit over of and healthy our a just and if three math that top were legs to the going get time the will, single our to of we the is to the is, see high this is business, couple we under next year, part its expansion -- forward try bit of that, we're margin here improvement we years. we heavy process thinking to business kind next you contribution belief very overall over if two operating And as allow that run horizon, and you operating margins line to walk drive

anything that. might you to add Andi, be So,

Andi Owen

is growth XX maturity, on slow and new months I as start coming are their in think line to some opening. with see we post the expansion also have and them for we to Jeff that, soar top that but XX down studios to really studios the of we good definitely agree I DWR news

build So their we'll really to HAY of the native. to it HAY as of we as Digital we technology the opening, mature. as be stores. that that bricks And come businesses, one has will as to invest And just and the profitability opening and of believe mortar brand believe in volume we and our revenue in start digitally invest magic parts retail and is see that lot Chief from start opposed we'll this in we that following a highly that around e-commerce then and such digital to brand Officer store a start

digital very expense build the mortar business be we'll side to of we're bricks strategic there So then really pre-opening as balance operating that where well. in opening and the and and up

agree with said. Jeff everything So

level still think be see a higher we into I should consumer we'll in income we it see over investment next but will business. the or mode we next but two as out, in and gradually retail year, year the go operating

Steven Ramsey

you to and the low answering discussed moving annualized little bit that there maybe growth, And kind were to in comparable talk investments when a I year-over-year, dropping more foot all the the square question. near-term parts Budd's sales that you DWR and maybe pretty long-term maybe square that commentary, this missed per was in with that the of

Kevin Veltman

over There's weather-related that of this the some One, there were factors us occurred Steven, in elements are Midwest couple that. aware, were well the quarter. a of those driving Kevin. is as that

comp one an which of last impact. was you high So our looked up against growth, weather year, but comparable at brand if ahead was

basis the probably that if factor growth, out another could to you XXX You more points add brand normalized to comparable level.

into the that, were to some numbers year, way the paced addition In factored of bit little well. some that elements versus as last the timing in year this promotions a there

driving a a it's were in overall, factors we But lower couple to So growth. what your had as point, remarks, been comparable of running the it at. we prepared straight little the than brand XXth there of quarter mentioned

Operator

Instructions]. [Operator you Thank

Our next question comes Burns from Sidoti. the Greg with line of

is line Your open. now

Greg Burns

do reasons completed consulting you firm and of a lot consumer thought, were Have bit of the get I that? initiatives? you making of the ago but all we're a little you have on with offsets room engaged on compressed not a deeper is going? And you business some benefits Is couple quarters so have the investments little now how just you're earlier of outside are talked initiatives. a efficiency to take we many would the margins seeing still really lot side that and a than to just that -- you To those are an of more about those? wanted there on update just that on an the

Jeff Stutz

We on you of we definitely I you have has been said been components those margin it, making that. largely as Difficulty] compression gross through walk as as headway this quarter, -- [Technical Unfortunately, at We room year. we're $XX But I be a run that program overshadowed. think tell estimate more can benefit to from rate there's of around you, that annualized we an million here.

a range. much fact, estimates broader In project had our

keeping pedal benefit down are from get we we're those the forward some. so programs as think and move on And gonna we we further driving

strategy the cost, mix, have project to the you, absence and felt think storage in we take it's making hard has meaningful from by we can those the that we the those one pricing look the profitability I negotiations about impact items that to real, in costs, -- don't overall supplier the mix would better about, benefits have that can all talked see the of felt business. the -- by business. way, the a to described it, invoices. certainly Andi are to includes, higher and I -- impact higher But contract have quarter of there you would headway, the been overall from of we're it's of the the we see us at into underestimate that But of impact the impact HAY everything net As way, coming the and capital mix those freight kind hurt that

I pricing price, So there's real. but know guess took that The more it's action, we room. think we I

Greg Burns

view offset And have good of planned? on year standard, year price other Thanks. it's and price like this handle you a gross you end your looking forward do inflation, or your the the increases to any increase pricing or feels have actions on what's margin

Jeff Stutz

we I on would say, to stay at this cadence. point, the expect would same

event are hopefully, the or Now, at the foresee. what throughout some felt out tariffs. But for that from that level, a to front, to a reduce we that to they think, off of around question would we optimistic that the could from and things XX% we're were get that a don't move all us look gonna big take ultimately, margins all, overall our on this, XX% in kind have the that, And while drag still will there it. move the on resolution the there's level the help plan I this be to that will of tariffs we're cause hard on something to consider them But absent we go commodity QX. what

I think now. normal our we're under cadence

Greg Burns

capability up I mean, or be fully channel? guess, XX%, I able increase do pass If that to the go offset that to it to, along think you does what to you'd

Jeff Stutz

would We've take those cases, would pull some up of folks a conversations. challenging have that I think to or folks But those did done hand-in-hand to we were were alternate entire say, And in that sourcing that, we some scale would to, level tariffs very we levers some examples. out, that playbook pull "pain," that it's But as a we would be we there that many whole we Well, when supply. time worked chain pricing small would we a first hard this have deal very [Technical look a But great great one We announced. team spend suppliers in at. those have of would with at to try I if the and are respect Greg, with of that suppliers Greg, would the then we the certainly look business initially and we you this is know, on what have of Difficulty]… at and including looking already a value actions. take involve it would hard to the and other thing share do, that and with we go can magnitude, to

Operator

follow we question the with line Bugatch from you. Budd a up of Raymond James. Thank have And

Your line open. is now

Budd Bugatch

update an the POSH doing, get we is maybe how doing, and is Can on into Asia quarter? and APAC factored in how Pacific the results that's how

Jeff Stutz

on quarters his China been business And strong a got for guy rule the year a us, shining executing there as The who to they're been kind we for Hocking, couple and of terrific in the that runs a in several got actually the row. for -- and us, all team. I a just business credit star He's for and us last who It's of group has team, Jeremy years. all for levels. very have

in made powerful addition of are that it's the distribution combination to and couple got doing conversations, through China in China, to acquisition, that with been us. region. happened all that, benefited things business that and dealers really that POSH priced terrific. So the -- years of we to products products from and products, along past Herman we Miller Budd, were combination got got a the as several know, high And you access appropriately that branded access important We which for a is quality those ago, in And region.

Andi Owen

for I from we innovation think growing that a has win boon got Budd, and the a region. real product that fast been development POSH,

quite I'm growth So and several localized, I quite been see and APAC, is China. had we've where areas of expanding one many to we'll of we the there. focus. there also actually impressed This growth been we said, areas including China Jeff of as where us. dealership in in India, expanding are for times well products those we selling now. with are general, year-over-year continue in be

Jeff Stutz

getting And optimization Dongguan. we factory But really And they're productivity tell I really, done. in two team that consolidation a that in was profit of one much can out work, with China, the where Asia in and we've of we in business. complete. our Southern overall involved to the that. POSH in margins it is not Asia quarter combining those the of that past the the Ningbo two a It's we're think formerly this it's and that we're in locations China ongoing, pleased factory acquired level of then And upside that Budd, and combined factories was really in that that part was effort still there's you seeing that work

that think to those So one be optimization and That that schedule think improvement said, further to ahead I of the in would we running we're there's profit seen. we work. be of point would

for Asia part of the us. all operation that's So

Budd Bugatch

which the factory it didn't you Shenzhen And remember consolidate way into went? Ningbo? I'm trying to

Jeff Stutz

went to we No, Ningbo Dongguan.

Budd Bugatch

of the done? in factory? you is able Will all Southern the now get to production China Ningbo sold you and that So

Jeff Stutz

facilities Those Budd. lease were facility,

Budd Bugatch

if about, e-commerce going and little prospects of what talk the in are? you the that looks bit forward what quarter would, like And a

Jeff Stutz

channel that. E-commerce sized we is But forth. haven't growing

on I this. think I got the last quarter question

haven't we to I have for third been has don't continued business to in our for if it really days a is us very so HAY has early of is exact know very anything traction that… consumer the quarter, us. disclosed fast So good there. percentage Andi, add you e-commerce. the But on growing for and be channel

Andi Owen

HAY top actually an and a is bottom standpoint. and well ahead the line from I of e-commerce plan from trend outpacing would perspective, say market

Operator

no showing I'm questions. And you. further Thank

I'll that, the closing to for turn and over with back Andi CEO, remarks. President So, Owen, call

Andi Owen

on updating Well, really Investor next today. call Hope Herman and continued interest Xth. evening, you great have you. thanks, everyone, We our us May quarter do Miller your in well. on we forward joining hopefully for the all at again Day a and appreciate you look Thank to and

Operator

day. may have wonderful Ladies and does This participating you thank and conclude a disconnect. in you for Everyone, conference. program, all today's gentlemen, the

MillerKnoll (MLKN) 20 Mar 192019 Q3 Earnings call transcript