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Key takeaways from the call include:
Despite uncertainties in the market, MillerKnoll remains optimistic about the future, emphasizing improvements in its digital platforms and customer experience. The company is also making strides in expanding its market share through direct-to-consumer channels, despite the impact of the North American housing market and interest rate hikes on the retail segment.
MillerKnoll’s gross margin expansion was evident across all business segments. The company attributed this growth to pricing, price-cost factors, and its synergy plan. The Americas Contract segment showed positive signs of improvement in order levels, while the International Contract and Specialty segment faced macroeconomic headwinds.
During the call, Andi Owen, President and CEO of MillerKnoll, discussed the company’s performance and future plans. Owen highlighted the company’s success in cross-selling products between legacy Miller and Knoll dealers and expressed plans to expand internationally, particularly with the Studio Knoll ancillary products.
The company has already converted 80 out of 335 international dealers and expects to convert another 60 this year. Owen acknowledged macro challenges, such as slower recovery in China and Europe, but maintained an overall optimistic outlook, balanced with pragmatism and vigilance.
In terms of capital allocation, MillerKnoll executives expressed comfort with the current leverage but revealed plans to gradually reduce debt. They also mentioned the possibility of opportunistic stock repurchases if the stock remains at its current levels. This aligns with the InvestingPro Tip that the company has maintained dividend payments for 53 consecutive years.
Overall, the company expressed confidence in its diversified business model and emphasized the need for a balanced perspective, acknowledging potential headwinds in China and Europe that could impact their business. This mirrors the InvestingPro data that shows a strong return over the last three months, suggesting that the company’s business strategy is working effectively. For more insightful tips like these, check out the InvestingPro product, which includes additional tips here.
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