Loading...
•
Apr 01, 2023
HNI Q1 2023 Earnings Report
HNI Corporation announced first quarter sales and net income, with profit growth actions in Workplace Furnishings delivering results and Residential Building Products segment performing as expected.
Key Takeaways
HNI Corporation reported net sales of $479.1 million and net income of $1.6 million for the first quarter ended April 1, 2023. Workplace Furnishings saw profit growth, while Residential Building Products adjusted to softer housing demand.
Profit growth actions in Workplace Furnishings are delivering results, with a narrowed seasonal non-GAAP operating loss.
Demand in Workplace Furnishings supports long-term optimism, with organic orders growing 13 percent.
The acquisition of Kimball International is expected to close in early June, creating a market leader with approximately $3 billion in pro forma annual revenue.
Residential Building Products segment operating margin remained in the mid-teens despite lower demand.
HNI
HNI
HNI Revenue by Segment
Revenue by Segment
Workplace Furnishings Revenue
CapyFin.comResidential Building Products Revenue
CapyFin.com Forward Guidance
The Corporation expects weaker macroeconomic conditions to continue impacting Workplace Furnishings demand and profitability. In Residential Building Products, a weak housing market is expected to result in continued revenue and profit pressure. The Corporation expects approximately 80 percent of its annual profit in the second half of 2023.
Positive Outlook
- Profit improvement actions in Workplace Furnishings will continue to drive results.
- The combination with Kimball International will create a market leader uniquely positioned for the post pandemic environment.
- Residential Building Products has unique opportunities to grow through category awareness, product innovation, and expanding installing-distribution footprint.
- Mid- and long-term fundamentals of the housing market are strong.
- The market is undersupplied, and demographic trends support demand growth.
Challenges Ahead
- Weaker macroeconomic conditions are expected to continue to impact Workplace Furnishings demand and profitability.
- A weak housing market is expected to result in year-over-year revenue and profit pressure persisting through the remainder of 2023 in Residential Building Products.
- The rate of decline is expected to moderate in the second half primarily due to a return to normal seasonality and less challenging year-ago comparables.
- Second quarter outlook excludes any impact from closing the Kimball transaction.
- Normal seasonality will negatively impact Residential Building Products.
Revenue & Expenses
Visualization of income flow from segment revenue to net income