Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Peter Lisnic - Robert W. Baird.
Peter Lisnic - Robert W. Baird
I guess the first question I have is on cabinets. It looks like sequentially the margin or the operating income actually got worse, but the top line grew so was wondering, if maybe you could talk about the mix that may be causing that or just the promotional environment, is there something going on with share or pressure that’s leading to that margin pressure?
Donny DeMarie
It’s been a difficult pricing environment, both at Retail and at the Builder and we have seen some mix change within price points. So where we’ve seen within a premium price point, we’re seeing people tend to buy at the lower end of those price points. We’re seeing the same thing at the entry price point. So everything tends to be shifting down within segments of the price point, which creates a little bit of an issue for us with less favorable product mix.
Peter Lisnic - Robert W. Baird
Is that something that you can get out in front of as you implement your restructuring actions or is this just you need to live through the competitive landscape for now?
Donny DeMarie
I think it’s a little bit of both, Pete. What we’re working on is really understanding what drives value from a consumer’s point of view and making sure we don’t have costs in the product that’s unnecessary and a lot of our lean activity is focused on that. We also are doing more within the Cabinet Group to really coordinate amongst brands.
So a lot of work between both the Retail Cabinet Group and the Builder Cabinet Group to understand how does Merillat, Quality and KraftMaid all really work together in the marketplace with the customer segmentation and focus and I’ve seen a lot of good work. Some of that will bear fruit here in the near future.
Peter Lisnic - Robert W. Baird
Do you think you’re further along in one versus the other, i.e. Retail versus Builder, on those initiatives?
Donny DeMarie
I’d say, the Builder is further along peak. We’ve talked about the common architecture and we’re starting now to see with really the announcement last week some of the potential benefits of that as we work towards a common chassis at both the quality at Merillat with the end game being able to produce any brand in any plant.
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