Loading...
•
Mar 30, 2024
HNI Q1 2024 Earnings Report
Reported strong earnings growth driven by Workplace Furnishings profit transformation and solid profit in Residential Building Products despite a soft housing market.
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
Revenue by Segment
Workplace Furnishings Revenue
CapyFin.comResidential Building Products Revenue
CapyFin.com 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