HNI Q1 2024 Earnings Report
Key Takeaways
HNI Corporation reported a strong start to 2024, with first-quarter earnings per share up considerably on both a GAAP and non-GAAP basis versus the prior year, despite an 8.1% year-over-year organic revenue decline. Profit transformation actions in Workplace Furnishings and solid accretion from Kimball International drove the positive results.
EPS of $0.37 increased 825% on a GAAP basis and 185% on a non-GAAP basis YoY.
Workplace Furnishings operating margin expanded 730 bps GAAP and 720 bps non-GAAP YoY.
Kimball International generated an operating profit margin of 9.3 percent and added an estimated $0.10 to non-GAAP EPS.
Gross leverage was 1.9x, unchanged from the fourth quarter of 2023
HNI
HNI
HNI Revenue by Segment
Forward Guidance
Second quarter non-GAAP earnings per share is expected to increase solidly year-over-year driven by the benefit of KII and continued profit transformation in Legacy Workplace Furnishings despite increasingly difficult year-ago comps.
Positive Outlook
- Second quarter non-GAAP earnings per share is expected to increase solidly year-over-year driven by the benefit of KII
- Continued profit transformation in Legacy Workplace Furnishings is expected
- KII is expected to add $75 to $80 million of incremental revenue to second quarter results.
- Annual cost synergies resulting from the combination with KII to total $35 million when mature.
- Year-over-year growth returning in the second half for Residential Building Products
Challenges Ahead
- Increasingly difficult year-ago comps
- Workplace Furnishings organic segment revenue to be down slightly compared to the same quarter of 2023.
- Residential Building Products, the Corporation expects year-over-year declines to moderate with second quarter revenue down at a low-single digit rate versus the year-ago period.
- Softer conditions in the R&R space
- Slower start in new construction
Revenue & Expenses
Visualization of income flow from segment revenue to net income