MillerKnoll(US:MLKN)2022-06-30 04:17Financial Data and Key Metrics Changes - Consolidated net sales for Q4 2022 reached $1.1 billion, reflecting a 77% increase on a reported basis and a 23% increase organically compared to the prior year [21] - For the full fiscal year, net sales totaled $3.95 billion, a year-over-year increase of 60%, with organic sales increasing by 14% [28] - Gross margin at the consolidated level was 34.8%, down 160 basis points from the same quarter last year, but improved sequentially by 180 basis points [26] - Reported diluted earnings per share were $0.28, while adjusted earnings per share were $0.58, compared to $0.59 a year ago [27] Business Line Data and Key Metrics Changes - The international business achieved record sales of $136 million in Q4, an increase of 28% on a reported basis and up 37% organically [21] - Retail segment orders declined by 12% compared to last year, as consumers shifted spending towards travel and experiences [23] - Despite the decline, new orders for the retail segment were up 63% on a two-year stack basis compared to Q4 of fiscal 2020 [24] Market Data and Key Metrics Changes - The backlog was reported to be 45% higher than last year organically, indicating strong demand [30] - Customer visits and dealer sentiment improved significantly, with many customers actively seeking to redesign their spaces [39][41] Company Strategy and Development Direction - The company aims to deliver $120 million in cost synergies, having captured $66 million in run rate cost synergies by the end of fiscal 2022 [7] - Focus on creating a differentiated omnichannel customer experience and accelerating growth across channels and geographies [17] - The company is expanding its international dealer network to cross-sell its brands, with a pilot including 32 dealers from 17 countries [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties from a position of strength, emphasizing the unique opportunities available [31] - The company is optimistic about the integration of its brands and expects to see continuous improvement in margins as price increases take effect [105] Other Important Information - The company introduced its 2030 sustainability goals, targeting a 50% reduction in carbon footprint and increased use of recycled materials [15] - The company opened eight new Herman Miller stores in Q4, including three in Japan, and plans to open three more in Q1 of fiscal 2023 [25] Q&A Session Summary Question: Supply chain normalization and lead times - Management noted that while internal lead times have improved, some suppliers still face issues, particularly affecting the retail business [34][36] Question: Customer visits and dealer sentiment - Increased customer visits are attributed to a return to collaborative work environments, with visits being more intentional and project-focused [39][41] Question: Pricing and cost situation - Management confirmed plans for additional price increases to address inflationary pressures, with expectations for margin improvement as these take effect [50][54] Question: Retail business outlook - Management anticipates steady performance in the retail business despite macroeconomic pressures, with ongoing investments in product expansion and technology [92][96] Question: Contract business demand - Demand remains strong, with no indicators of softening, supported by positive metrics like the Architectural Billings Index [118][120]