MLHR - Earnings call transcript Q4 2021

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Operator

Good morning and welcome to the Herman Miller's Fourth Quarter Earnings Conference Call.

As a reminder, this 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 morning.

Joining me today on our fourth quarter earnings call are Andi Owen, President and Chief Executive Officer; Jeff Stutz, Chief Financial Officer; John Michael, President of North America Contract; Debbie Propst, President of Herman Miller Retail; and Jeremy Hocking, President of international contracts.

press our yesterday's at Relations posted hermanmiller.com. have release Investor on website We are non-GAAP press on reconciled any presented Wherever figures a and amounts the non-GAAP basis, within that release. GAAP have we

over to I will quarter, to include Before I statements. like turn Andi a of would this brief that everyone for remind forward-looking the overview call it

and annual to based For and make well or these we forward-looking from a information turn Q&A differ we Andi. to as materially information future as statements events. scheduled Any these filings. factors on session. Today's At to will SEC have call as today release please of obligation quarterly that XX I'll this the refer forward-looking results undertake remarks, that, as to is minutes. the With update we press could prepared date, our the new on a result for cause over actual that of earnings of statements, conclusion call statements assumptions are no our

Andrea Owen

Good Thank you us today. everyone. Kevin. morning, for joining Thanks,

of activity also markets of up highlights XX% levels acquisition from orders orders resilience year the that increased levels, a were rebound planned prior open fourth the we last were and and increased of sequentially the up compared seeing our quarter during business the our third to we're continued sales The XX% compared in serve. year. to highlighting that Knoll Consolidated for addition quarter to the pandemic, quarter, In results the diversity announcement reflected and model. of from our the quarter the

of our segment history. quarterly well. for of orders the reflects as XXX% record-breaking last were strong Sales up year, operating sales delivered the quarter for another performance with performance Our margin levels Retail Segment quarter the XX%. Retail were profitability over XX.X% and up the best company's in business

category. We office home and continue contract demand growing see DIY to beyond the

over XX% was fourth order categories, Excluding those last quarter year. growth up two

QX Our plans as recovery feeling positive their quarter. contract half especially the the for American of year. funnel, flat contracts also to return markup been the North the impact prior by the demand and the to second from project have office, increased business the compared accelerating XX% sequentially and external activities as around of office the rates Order pandemic began been to is have indices supportive indicators proposal customers Leading was and segment center architectural from measures in such trending positively. buildings and also

quarter earnings commodity adjusted margin year. over same margins segment during well, from We XXX% the is costs, EPS, XX% year. costs adjusted over Adjusted continue restructuring, totaled the a the gross to Contract in as despite see of quarter year-over-year quarter increase improvement were up Diluted basis per challenges same quarter. points X% and near-term This of impact charges, with excluded of operating which profitability an earnings compared for Higher International to last orders last GAAP the $X.XX. share levels rising while the the per year. special and sales $X.XX, on demand were of drove across improvement higher last basis XXX the other acquisition-related share

subside, guidance. sales continues earnings as to pandemic and we ahead, reestablishing Looking are the quarterly

between first million the share We expect $X.XX. per million and earnings sales $X.XX in quarter $XXX to $XXX and of

business continue our stakeholders. value grow new We're Knoll. every the we're position to segment any own of of our our entering strengthening business. the and and in industry in ability transformation across the include Just a We've acquisition challenges incredible past the in our accelerating era a reminder, leadership of our impact for outlook of strength and our year this our create position exceptionally well, to navigated from further all pending does confident not

contracts a the And serve and ourselves to they with us every enable will differentiate digital-first with want we business audiences and us. to and capabilities in customer we to continue consumer differentiated everywhere approach do way Our everything do. in

detailed future, making finalizing the acquire of we one to both organizational Herman deal agreements integration for to are meeting, XX plan, we're the close shareholder receive synergy of week of shareholder will meetings. respective course, structures areas. towards their we're approvals and In close, Knoll and readiness pleased Miller assuming our anticipation and operating scheduled and Knoll, the progress one with our designing Looking the deal preparing within expect very teams July those day processes, at we planning creating the plans

of best the unite new bring we to as to create is our goal both companies together organization. Our combined

will process stakeholders. seamless all integration the expect for our We be

will to advanced our products, As our and leader a Together, Knoll the preeminent and customers of continue everywhere transforming during forefront portfolio unprecedented and with and the design-driven We'll to the drive be a possible to books be Miller Miller years combined with of our design, innovation design to serve who've broad placed helped for Herman obstacles. industry year. one despite would I'll talent. disruption. so people none sustainable this XXXX technologies you And brands close for of without at in period record community. many around come. we'll the deep teams be to capabilities bench of to of digital the that thank transformation huge world continue who I'm make our incredible power grateful their for a make I who this say and up the past this efforts have the Herman modern

questions. operator future. to exciting be And for have it a part to your bright very of time that, With it's our organization. over We turn an the I'll

Operator

[Operator Instructions].

Your & Burns Sidoti Company. line first with Greg from of question the comes

Greg Burns

your first was better than EPS quarter, little were Relative for, looking guidance but the was bit we for little light. revenue strong, to bit the a a

quarter? you're just you margins EPS What's outlook for? can So first your driving walk us that for that for looking the through

Jeffrey Stutz

that I start reference everyone made level Greg, in understand. additional to would thing think join first this if color that say in to you important but can morning, And Jeff. I your they have I think is Maybe is I'll this add. just that This to you and the note they it's published want others set. some

reflects a quarter earnings lower-than-normal fourth per Our rate. tax effective share

start So, our rate was for were some it effective adjusted from as that good business, rate And the and just will the result was favorable let lower XX%. items news under tax favorable but flow all of quarter with a for typical levels. that fourth lower cash generate me

probably think being tax normalized rate and between you somewhere as Our you Greg. as can XX%, XX% know, of

what were to find buyer us. to ups utilization from sold made for, we then of true that about tax $X favorable NOL million credits items, a so, great which an a We of that And million were items. was about favorable tax million. And came able the as state $X another those we off some had which as had of $X benefit we up well

So, rate. there's about in the $X million tax of favorability

going for the was QX which sequential you'd guide then expect, for because QX you improvement from that in earnings If quarter, in higher per in share, QX. revenue our see fourth normalize you to is what would

I effective sure level wanted make just to the So, we set rate. with

drivers impact It's We're the gross the Now in margin. inflationary guide, to the of your question, you look business. of pressures feeling no secret. at within the

will margins. QX increased will commodity QX costs expect into gross $X We that sequentially an million drive pressure from pressures estimated of

a Now, contract beginning as it in normal for results of effect we can, itself things larger know, everything price layer than that that takes you effective we on doing and are June. But there to into we we're the increase put the time can do, business.

also many year. first Like we'll We're direct we $X through of so expect move start to to feel the an that are, benefits half costs. the companies million of So, the in that the feeling costs. going fiscal increased drive sequential area that's of as we it estimated of labor

feel impact margin. that of in inflationary we're going two are our gross the those to So, pressures QX

begins -- said, offset margin it's of that, order worth we'll because our it North production highlighting, also Now, that improving this, improved of And – pick contract translate that to we've the probably levels. gross the see of retail blend into structurally some in which from story. contract you'll as higher business. North up margins, the not in a gross American contract all have then, will in rates contract it, revenue, difference continues helps right? and that business business are So, grow, you the of are American as with leverage in steam And higher a some see have business, been, to channel but basically itself business you mix, lower as you of terms we've where than

And are the you've area make going the lastly, we're then, cause of that digital, investments been with as question. your isn't So, pause, IT got as that you've that initiatives I'm sure getting revenue QX. In operating with in which in well I'll the a and news. QX. mix a new from expenses just sequential additional sequentially to got expenses some as higher And area as up come in about operating talking These much of that that's be little to expenses, anything. are that, variability bit and issue to that that, we've operating making

of the So, trend. the hopefully, speak kind the major that gives that to earnings you share pieces per

Greg Burns

that your your increases? for the June this need terms of are we price first? terms the second or year for increases, on your – in where maybe In price that additional What's is of view

Andrea Owen

calendar Yeah, in our one first this that's year, Greg.

think not by value hesitate on watch manufacturing value We're plants. needed. costs add, additional our to very, we also that's like always we by things looking the keeping if the tight with at take we And very have, working action within reduce are to we can We everything engineering suppliers, trends. like will doing, commodity

fare and those. all into great doing Miller, leaning standard at So, teams are a those job are here Herman our

to, business, However, increase. closely side are additional commentary. if at us. don't feel looking the They're have you'd know, impacting the we I are real. commodity John an and, of we're ramp anything much will costs that you costs from there price Michael, And to certainly we American add the other so in any upon have contract up contract if that free so North these add consider

John Michael

as you've Obviously, commodity goes Jeff. trend our it kind perspective. competitive the we're across right of pressure, feeling but And I from covered general a sort well, think inflationary our of with it are so the competitors now. well economy

Greg Burns

how in the you Lastly, I as can to starting kind maybe shoots weeks? just of us first the first trended of American some patterns in Contract to some patterns in guess quarter here pointing recovery into couple and we But move we're North order business, here up pop insight give terms into see order the market. green the that have of in the

Andrea Owen

America? you that to John, for one want North take

John Michael

comps As half half first the of of perspective, in a significant opening were comments, to our sequentially the the saw just under in in opposed from XX% the as Andi to strengthening QX, basis. a Starting a From year-over-year tick well, up to we as year-over-year increase a quarter. QX, mentioned QX again, from QX, from QX second QX. year-over-year XX% quarter significant

one board. are So, slower we're seeing York Toronto think note really the a that of the in are are North North already Area, the open than many And strengthening New of America, of other Bay is Boston, markets America that number other thing largest up markets from open. the across to Chicago, markets City, I across

And So, already. think areas to seeing impact. in we're late up even encouraged a to larger began metro these continue some fall, to positive see and open the summer that if of should strength more we're that have I

Jeffrey Stutz

month averaged other just March jumped orders through in the new three combined quarter, they've $XX We give million. of group up May. And a level. a about one you add weeks to in just million At maintained April the million the consolidated improvement might of saw at for a $XX first of in pacing and nice the for month the you week. quarter. sense level, $XX to I the that They bit

nice we've So seen a acceleration.

that I of give that of increased first that pickup. reason good there's And the signs continued it the is news the quarter for late there a it's speaks was it in through just going the But as to out lot the quarter. optimism think saw the forward. part fact us early mentioned, we John

Andrea Owen

in same international the markets as would well. the I seeing add, we're

good another that's So, point.

Operator

Group. next Ramsey from Your with question Thomson comes Steven

Steven Ramsey

a thinking sales couple Does Or challenges. in I is ask supply demand questions about manner? demand reflect the to timely guess to these challenges, it, QX exceeding way holding a the sales currently? chain another back guide ability deliver

Jeffrey Stutz

guide. you QX, mean QX referenced You

we comes to and others date Just do adding manage to are inventory we're at some doing quite What might which some some a can to the of trying that specific things it. tried And We've really everything container delays. everything expedited Debbie managing edges, freight, can. container we that, of cost. we're with obviously can impacts business. you I their well it by like selectively to have color to tell and is feeling we clarify. shortages But on are and the

an I doing think we're job. okay

terribly it's There's alarming days of additional news now, inputs some there's And So, of that availability nothing lot watching. but right a is there like some something on there's challenges these we're that. around glue.

earlier super have working the significant. We additives manufacturing some Nothing process. foam in in talked about other We're again. through those the year,

I US a manufacturing now contract. labor this is from but standpoint, not mainly in issue, though think that's our biggest it's a right US And challenge the occurring. based principally a and is exclusively US,

managing it's as So, But of the I want are pockets. don't the if it add edges. Debbie times additional know that top issues there we we're some sure. we're you for to now, as in are here. there And stands mind it can. business, lead best And, right any extended But on thoughts retail seeing on

Debbie Propst

in our May. as actually of of typical expect events That's we Absolutely. in largest sales of at QX, our the have of a the was end percent QX in that about particular, promotional Retail we one for year In would XX%. what pretty demand given

so, ship those see July. And in and to June expect we products typically

conversion June, affects we quarter. period that into at the to really those of see promotional end the closer And numbers expect out our lead where which impacting are of product even, time, what is coming in we'll two is looking supply So, the place issues us chain our which rate. large would

on when fairly table And customers normal. in a dollars that those into the we we of because than So, had leave certainly, impact funnel, longer customers lead convert don't the times bring we as believe QX. significant

There's order given I Jeff so our do competitive our diligently the And growth we've very say, the offering we're is and that be, benefit QX. are said, some chain like quite But continue happy places been feel in ourselves challenges, and relatively versus domestically. particular where missed set, we strong sales across impacted. that's real but they them real. like as because a opportunity course, set. order will very amount I outdoor been competitive these very I'd as Of these there we're has to of performance a times. supply especially to been in And where with lead manufacture our the of of stock rates to the in mitigate look not growth in I some are position, working overall

Steven Ramsey

much ends. Couple self-help off clearly, other on margins, Retail. And start on can Retail? you are the Maybe reducing near-term much to I questions base on big fruit. make this self-help open how the with sustainably, in improvements bearing the demand, come you've never stores, story further openings up meeting margins? store how low know you But is left new as strong new

Andrea Owen

a well terms you've last stores and is what us Well, about have rate seen plan. rollout the openings above over that the of been performance exceptionally performing that pleased have great months. pace with same news from our new as is been the in income store we've the six target. We're operating the opening The

rates So, our those rates adding will stores as grows. a what to income are fleet and in meaningful operating our way become that margin

improvement In QX terms the margin year-over-year, current margin mix the we're of sort mix. element that of department biggest from of within comes seeing improvement of

shifting of relationships between we our And Retail. sort so, non-workspace see closely monitoring as and categories within we're workspace

versus sales demand growth QX seeing in the what over and workspace workspace. accelerated category, within base increased. However, actually And given seeing total that QX, we're we're non-workspace absolute our X% in then, increased there

that to categories. the opportunities. we increase where have private the of is overall in opportunity that's exclusivity label amount amount where our and I area our assortment an margin opportunity So, decorative improving indicative the furnishings there's of And development believe in an of enriched

Andrea Owen

the share the a the really just of and brand Just to to a for also so new is Herman store business residential gain to DWR building team ground have our at thing we beginning Debbie, And to add remember, have retail concept. HAY sort the of what market been are Debbie been retail to model concept, can off our the standpoint. growth And we really spurt. get infancy have in Miller from the our future, that that doing you add

fruit, the as far hanging processes take the Debbie as discipline, in that assortment operational had low the just the business So, beginning to and opportunities are hold.

have So, share all the in as in we the of we long we of runway brands see our market front. the that part a opportunity increase residential direct-to-consumer the business, on of

Steven Ramsey

On the in maybe targets of over trying quarters, is of teens, the the drop few teens get much that to a the term, that you impact in sense and segment coming last reduced low how sales range you to retail XXs the moving and through in long low this expenses elevated percent can the margin bridge alone? from have high of

Debbie Propst

view our for I your return this Steven, Well, as an retail investment organization.

over last [indiscernible] a that was seen have an the to And We XX developed is analog on that model. infrastructure tremendous very support months. growth

this planning will building along focused channel to these the the out are scaling of These infancy multi-brand at executing system the year critical grow. we're that to the customer acquisition said, infrastructure to support us the allow omnichannel been vision allocation build as continue the So team and things a critical out Andi is months. business is And of that of management are refresh, with is over investments like and order both system, to the vision. pursuing last an that POS, all on that to looks on business my that be I've XX we omni growth. an LTV infrastructure What

Steven Ramsey

me. for one Last

in than feel look that and office? and look much backlogs book and post the pandemic, your office the you about does order different think see you conversations, pre-pandemic As what

John Michael

had And couple attract round they have and talking they're base. retain that all per square client that last switched engagements some about foot we those employee the and post-pandemic your question. and employees, add of cost a do to firm share having. weeks now we to about We our principals, pre-pandemic that and densification. to pre-pandemic anecdotes a types how number collaboration of connection couple across conversations topics And color of A were in table with do a Just B facilitate how a versus bit

they if do of of provide product drives to terms So, in modification want set the of you about in obviously space them. people change clients. are criteria, set different and what and we And projects and their will, totally that specification thinking some that terms that solution for for individual the

we're that strategically, what those support. space And results and shift. types is improve and of well we're what it seeing we So, as quite to our products conversations we using encouraged frankly, talk asset an do about about by because business what

I help market seeing where So, think, some we're we've conversation provide. kind of definitely, to a got right move the areas lot of into

Jeremy Hocking

This Jeremy. is

Let talking But color someone because home. say things we've it me from for more purpose. the not maybe space finding just about the forward of XX% fit less add a all are that of – from quite may an here. perspective. that I'd need said, is what One large couple will are most been some be less some working people for be users space of international going as office is,

there's to years. we've So, with conversations the with developments think all insight another that needs and that's I made all particularly research to around And we are And the dealt have those recent world. of investment piece it of customers well with. in interesting be in placed

a industrial that's large which to has to which of stable. this impact bring are As on talent of who OEX just credentials. into looks market design the for companies, well in we as global that that was. market are we've And reviews. having launched It's design the it are rave brink we as it more and comes the it bringing like acquired excited to time, preview like line industrial now. firm, market we're global acquiring products tremendous and versed needs These people one, And another more was because we're British just designed the about product

advantage And these so, are as customers extremely well [Technical think scramble having months that conversations take of we're return the placed to we in our coming they to Difficulty].

Operator

next with The Reuben Your Company. question comes Benchmark Garner from

Reuben Garner

can contract was the like and better – had recent end as levels some into this progressed, us whether the of it's even apologies it But where you questions. American First issues relative What pre-pandemic if can asked, quarter year-over-year order June. orders tell I the question on to specifically? just sounds you about are, or got Greg's at even trends? comment maybe connection in It North

Jeffrey Stutz

it We an on happy but I briefly, think it's point recap really touch because important just I'm that to to emphasize. did

fascinating growth. trends think, level And is three trends, American Contract fourth up saw across business business the it each of talking consolidated order just from about sequential quite North So, let total, the XX% third The XX%. quarter the XX%. up, kind to XX% order Retail the sequentially, the was order what consistent segments, was And first we and grow was start that sequential in XX%, was of was orders I business me international quarter. at sequentially.

those made seeing. and pacing, I'll you percentage comment growing all it. I positive think look So, I And repeat that intra-quarter but when changes, this earlier, all order reflective of at very are then, similar just very we're that momentum sequentially,

terms, April That March week in increased the in the May. So and orders million dollar average in per month $XX were combined. of

that So, million June, in about level. three $XX And we June, maintained acceleration first a saw $XX it's the to at million. nice fiscal weeks of

quarter. but a of factors forward. good to cliff this, a – fell the So, up of for the continued though aware optimism that external as ongoing that's lot early in there's said moving point and reasons lot and continue at beginning in it external of Andi growth call, a It's know the you're there's of of a I of And as part not May sign. bumped the off the

you gives that hopefully, So, question. color that's some your helpful to

Reuben Garner

off $XX we been estimate? XX% time have million Any the XXXX relative dollars? would this still? what to rates that in run rough Jeff, Are in

Debbie Propst

focused given we're while in But really our closed our contract numbers. in to counting particular, in was now speak e-commerce our stores pulling where XXXX, to channel. up a to XX% year Jeff's QX the growth But in in Retail performance we're Retail, jump order surge quarter XXXX. had last and we that last and on I'll a

And Retail feel in overall business. mark the water so, we that new very about positive

Jeffrey Stutz

total consolidated quarter pandemic the the just level, on they look the of X% to comparing were in just for business, in quarter, organically total. pre completed I'm month you were the Reuben, if at orders XXXX, – now full so fourth for QX – QX down I think

So, up still consolidated of at were part. down. month encouraging In the But the the May, level here's the pre-pandemic. X% orders versus

the at group this see encouraging of was So, May phase early XXXX of metric very total for recovery, that that to to the orders year. up our a entire

Reuben Garner

On the a price follow-up. cost, just

million was incremental your QX $X to million sequentially that QX you of said think there and pressure right? of hear guide, $X labor. cost then Did I from direct I

Jeffrey Stutz

is That correct.

Reuben Garner

that not on like cost, of we cost or price quite that that yet? terms did much price of when layer be just increase. QX? have in in year-over-year look And kind as it basis do What be cost pressure QX will price up as a does follow-up Will in see is, you pressure caught soon price dissipate? a you you're to starting to in question maybe QX? how The know I

Jeffrey Stutz

commodity had clear I points – be We to on here. want reference just pressures

decline. commodities quarter, you basis for XX fiscal gross year accounted if QX margin of versus points So, look just about prior XXXX fourth the completed

honest So, dollar terms, here. million? $X me In Kevin, keep

Kevin Veltman

million. $X About

Jeffrey Stutz

price speak no that, of to increase really help And Year-over-year? Reuben. to offset

do price effective we have X. forward, moving increase Now June a

continue they happens lot this this prices the Obviously, million to feel belief these to our there's the You start to of begin additional $X our back effects pressure. We've what at got pressures parts hope if because price and this move plays much start to back speculation QX. latter benefit of we equation, results out. price into will benefit our definitely lots to in as it should history XXXX. a we'll forward increase then referenced see part belief. continue and abate of even escalating, QX. look we a that's as commodity different how to expected including of that to to the of doesn't, of And see increase later. we half the But get Pure effects FY some we if the But the We And won't of in answer. here is into year. start That's calendar should from escalate commodity point. very it that to see move

Reuben Garner

think of look a a of it? competitors one larger increase out than increases the the ballpark that's usual. was think is? have and with you I level one the it increase couple Can You of Is your sort your your there. of on what I mentioned price maybe comment increases in the right to two are of out what others way couple at

Andrea Owen

may our that not them take to look pricing much forward, know we're you if able or increase revamped we process to. remember increases quickly guys price Our then, that I we in need June we is may as don't X%. more And around

that But That's going If we X% we is guys we've the you know, Jeff with follow-up another, the is good because the to earlier, as believing we so retail to what done out offset. on year. really alluded to ease And about with going the feel contract as we're will. So, business. commodity are to just more far fluid. for in pressure have later we

Reuben Garner

or are me, for retail Jeff But follow-up. best one And if and bridge for close could between the fiscal low-teens for there guess, I low-teens? investments toward year the more year investing getting the this the that today that your is stopping and to over for level difference where so the is I the after those whoever. Debbie I is investments XXXX, Last and besides that or the the the one from is question – the you take the is XX% to that grow margin any Debbie, business? – year? make margins this are squeeze a done going XX% go if you're to there don't from know to other target in back XXXX low-teens you're in the assuming to anything last elements you there going away, But you've year business to this

Debbie Propst

What FY see rates we're XXXX, I about. is really obviously investment expect margin FY XXXX which plan. we to I begin making And feel growth, bullish already outlined investments in build an again. beyond And very those to

US continuing basis year. monthly direct-to-consumer the in the to on perspective, of of experience European our HAY for fiscal invest had this From the launch website assortment will calendar at a a drive year, We the last newness website beginning significant an and relaunch HAY of next digital the with the impact to be year. in we're that's and continuing

our the fact, categories $XX assortment various of furnishings between all the drove incremental year. in million volume gaming decorative and full In in newness

we're as so, watching strategy, be And newness, results of those mix as longer that impact the the I our carefully. protecting newness term. label our as positive private marketing to continue part an on and have mix channel then in And content. said, quality very marketing margins the expand our to of And in really development we so margin continue adjusted is strategy important we'll that we both we've

$XX to last in X% X.X% percent year. $XX marketing of below QX FY and below customers as And sales our cost And above acquire same is XXXX. was spend a down our versus down that's period versus so, for

drive data we continuing should as So, LTV our our base our of as see customer capabilities capabilities, down as in the CRM our continued we to customer growth continue enhance acquisition. well to and

Andrea Owen

of will year, we possibility high-teens mid-teens, this to for we'll move go getting year. an And high-teens, a that recap, is from a and neener-neener not point, out anticipate it's we also beyond to and anticipate but low-teens, to sure. be this definite back as we but Just investment

Operator

Your Capital. line Fuhrman Alex next comes from of with question the Craig-Hallum

Alex Fuhrman

the and particular, a you launched get big bit of post-COVID be in guess of in small where only a country any Herman love Would see, and be color economy? Have started growth to of big you're there or variation kind groups? regions couple little what And Would recently, if in on coming sort that industry from could North seeing Miller of I'd more a the back see months part vertical I in business to curious Professional. just your the to then, curious of to see a big businesses? America? medium-sized you of demand be terms And been ago,

Debbie Propst

Jeff, will. to you absolutely to want it think add I do that?

Jeffrey Stutz

Professional, what or know want speak on in can if talk little if details John, I few a but Andi bit you regionally about a America. don't I to North HM seeing to we're

John Michael

Midwest I opening in have to to obviously which economies think drives and their a South up, regional a seem terms bit quickly from demand. back clearly, more of perspective, bounced

continued in Toronto in I a from for well see North As New that in and of City, bode the activity call, We're have markets also starting recover. those the I a in contract mentioned bit been number York America will now markets Bay largest increase the the Area, demand slower Chicago, to earlier believe perspective, think a that fall. to

Jeremy Hocking

customers in maybe one but in Difficulty] that [Technical very America, operating another markets. active globally, to little coast fact, global are a North on quiet in are

$X the a an we you a weeks. landed India, [indiscernible] just big $X In in companies examples. of Japan recent couple recently million Tokyo, tech and a order you one give we of also sorry, for another So, landed million tech one in now? with me company Coast hear order can – for West me Let in

think of I just clients ours. North think of about would America, to because global So, clients us globally, not like regionally, these I many are

Jeffrey Stutz

tag Miller might Herman couple very on which we're on metrics a about. Professional, excited I just

we that our that Now, would end and have are fairly But it first it's signs this days, incremental business had almost customer in months to We're think good asking. high of registrations quarter. XXX two I XXX in of projects – to new small in the typical of really early early metrics just Early encouraging. confidence as effect and business, book created. be the what We size right? are you're the of couple medium is over really question and months, that gets of XXX

got helping supporting digital group and of that terrific as of is this the that the be are that it support site. order registering average pretty of a team to which dealers customers a the and you by value on But is behind we've way the are sitting nature of Now, these because well. the great would this it small, of kind expect also

from going big and anyway, this very expect So, we encouraged we're forward. things

Operator

And your Berenberg. Rudy question last Yang with comes from

open. is Your line

Rudy Yang

in the a are start work customer talk per guess, little just from bit home permanent So, for as you noticing the kind seeing starting I of Could specifically, some you of increase about average retail? you've spending been more patterns spend become to workers? to some

Debbie Propst

then is As studio order is higher our channel we'll channels shift. our we're in bit, order Average that and little and over have we average up movement order channel the continue it's monitor lower. much our QX channel in in e-com mix as quite a year-over-year, value. a value to has shifted bit value seeing Average mix

Rudy Yang

traffic sales. just does continued plan of you stronger Back upcoming stores brick like acquisition rates mortar, like discuss given seeing drive maybe seems stores? success you're to fiscal open the and from And and to of the more your there, kind customer continue look store some Can the is it new what your your getting physical year? to

Debbie Propst

from acquisition happy half new of particularly or new and our We've because the Miller customer both stores, the increased our doing new of that stores, Herman year-over-year. customer repeat segments the those customers. new about been our And under seeing we're brand, those customer with volume we're

year business prior in for customer XXX% total whole up across acquisition full was Our the year. the to our

of a important ergonomic the category lot new We So, a need particular that of in part that seating of know are customers our awareness with. an strategy. this category stores help is

For a customers, purchase. our it's lot a residential first-time of

stores, about and that product in is as just we on. seating in need. short-term believe there operating wellness and model customer of sit that a believe experience new performance our And beyond this and margins to customer pandemic plenty we the store And that rate so, strategy. positioning what actualizing is are feel at these crucial. bullish we that a And physical growth the retail much where Herman given the than positioning Miller modeled, higher to chair health We a of is the an proving engage furniture longevity a beyond office ergonomic tool about thinks

Andrea Owen

want Hey, openings standpoint? and of the Debbie. bit a to of kind on demographic with little touch customer touching you HAY Do that from recent a the

Debbie Propst

in then, we Within we is Greenwich, then we multi-brand retail California Within that within Absolutely. format Avenue a includes Fulton Connecticut. a on location the and experience small opened store And opened Design Within quarter Reach HAY also Berkeley, a QX, in which HAY, in Greenwich Market, Southampton. Reach Herman new And Design Miller. opened seating location and a

above model opened first America so, is the particular, HAY with it line it demographic. physical And are in within Southampton particular much we're to with North a Within now believe And need market well perform the into will modeling of to And have Reach for broader which lower retail that where performing in Design in. that that that is they our style in expectations. way format a where us appropriately engaging that the small to the we expression particular coupled location, investment the a first Design then the the Reach location were we strategy, modern quarter is And all of locations presenting within Market, get secondary we a expansion sight HAY, is of Fulton range Within assortment our the covers right we markets. of curated to.

three mortar brands. we these about of And the all and across brick feel retail positive so, very opportunities

Andrea Owen

mortar thoughtful able really I reach a think prudent have way investments a of managed enable the more do our and way we've and in Groom capabilities, than been with teams in customers will before. to variety digital the our coupled Ben that efficiently and expansion, Debbie to us brick and

that. we're about very excited So,

Rudy Yang

the Last and in of backlog. down much being built last one your can shipments was backlogs just possibly And but delay is obviously currently? on is deliveries? increased since It driving quarter, me a break you what most just it from how bit from up

Jeffrey Stutz

the the there I backlog backlog, the on What is a wrong correct up little But it. we of broke and would the an essence speak this think is question I think I'm that me I schedule if you with You can in sign. and – the that encouraging to question. bit and tell is

they were – excuse guide dated normally rates and than order that QX be in backlog QX, some has As pushed little than might because begun the out are which beyond projects up, think as more revenue order American later Contract Q in the the in happened and strong lower the quarter, it orders that normal to it's relation particularly to were few quarter. a look and it has that me, in beyond part momentum informs projects, the why pick are seeing first reason side, of I in a scheduled we are North

So, there. a of little a timing bit issue

if of little sure there a make deeper? Let that and was essence me the or question something pause that's there your

Rudy Yang

No, that's perfect.

Operator

I the Andi time. like back conference this would am to at now showing no further Owen. I questions turn to

Andrea Owen

Thanks, again Herman joining Bye. operator. we're forward interest Thanks, everyone. looking And us you Really well, appreciate today. you appreciate in We everyone. Be continued to Miller. next your quarter. updating

Operator

Ladies and gentlemen, have your participation day. this concludes today's conference. a wonderful for Thank you and

disconnect. all may You

MillerKnoll (MLKN) 29 Jun 212021 Q4 Earnings call transcript