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HNI Corp reports top and bottom-line beat in Q1

EditorRachael Rajan
Published 2024-04-29, 08:00 a/m
© Reuters.

MUSCATINE, Iowa - HNI Corporation (NYSE: NYSE:HNI), a leading manufacturer of office furniture and hearth products, reported a significant increase in first-quarter earnings, surpassing analyst expectations.

The company announced a first-quarter earnings per share (EPS) of $0.37, which is substantially higher than the analyst estimate of $0.19. Revenue also exceeded forecasts, coming in at $588 million against the consensus estimate of $574.5 million.

The company's robust performance is attributed to its Workplace Furnishings profit transformation and the strategic acquisition of Kimball International (KII), which added an estimated $0.10 to non-GAAP EPS. Despite an 8.1% decline in organic revenue YoY due to a soft housing market, HNI's profit margins expanded significantly. The non-GAAP operating profit margin for Workplace Furnishings, excluding KII impacts, grew by 560 basis points YoY.

Jeff Lorenger, Chairman, President, and CEO of HNI, expressed confidence in the company's strategies, which have led to the highest first-quarter Workplace Furnishings profit margin since 2016. He also noted the support of recent cost actions in maintaining profitability within the Residential Building Products segment amidst market challenges.

Looking ahead, HNI anticipates a solid increase in non-GAAP EPS for the second quarter of 2024, driven by KII benefits and ongoing profit transformation initiatives in Workplace Furnishings. The company expects a slight decrease in Workplace Furnishings organic segment revenue compared to the same quarter of the previous year, while Residential Building Products revenue is projected to decline at a low-single digit rate.

For the full year of 2024, HNI forecasts a strong increase in earnings from 2023 levels, with margin expansion in Workplace Furnishings and full-year accretion from KII. While Workplace Furnishings organic revenue is expected to grow at a low-single digit rate, Residential Building Products revenue is projected to be flat-to-slightly down compared to 2023.

HNI's financial strength is further underscored by a solid balance sheet, with gross leverage at 1.9x. The company also accelerated stock repurchase activity during the quarter, reflecting its commitment to delivering shareholder value.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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