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Jun 29, 2024
HNI Q2 2024 Earnings Report
Reported strong second quarter EPS driven by Workplace Furnishings profit transformation, Kimball International accretion, and Residential Building Products actions.
Key Takeaways
HNI Corporation reported net sales of $623.7 million and net income of $36.0 million for the second quarter ended June 29, 2024. Non-GAAP EPS of $0.79 was a record for the second quarter, driven by continued operating margin expansion in Workplace Furnishings, strong accretion from Kimball International, and profit growth in Residential Building Products.
Delivered strong second quarter EPS, GAAP $0.75 / non-GAAP $0.79 (+44% YoY).
Expanded operating margins in Workplace Furnishings +750 bps GAAP / +370 bps non-GAAP YoY.
Net sales growth expected to return in both segments during the second half of 2024.
2024 EPS expected to deliver strong growth and reach an all-time high.
HNI
HNI
HNI Revenue by Segment
Revenue by Segment
Workplace Furnishings Revenue
CapyFin.comResidential Building Products Revenue
CapyFin.com Forward Guidance
Full-year non-GAAP earnings per share are expected to increase strongly from 2023 and reach record levels. Continued improvement in the second half is expected to be driven by margin expansion in both Workplace Furnishings and Residential Building Products.
Positive Outlook
- Workplace Furnishings net sales are expected to increase at a low-single digit rate year-over-year in the second half of 2024.
- Residential Building Products net sales are projected to grow at a mid-single digit pace versus the same period in 2023.
- Year-over-year trends in both segments are expected to improve from the third quarter to the fourth quarter.
- Continued improvement in the second half is expected to be driven by margin expansion in both Workplace Furnishings and Residential Building Products.
- The Corporation expects $70 to $75 million of savings associated with KII synergies and the ramp of its Mexico facility.
Challenges Ahead
- Workplace Furnishings outlook represents a modest reduction from the outlook provided in the previous earnings release and primarily reflects timing in the contract space.
- Residential Building Products net sales decreased 4.6 percent from the prior-year quarter primarily due to housing market weakness.
- Remodel/retrofit sales declining at a higher rate than new construction.
- Orders in the Residential Building Products segment decreased four percent compared to the second quarter of 2023.
- Changes in the Corporation’s pre-season, early order program negatively impacted the second quarter order rate.
Revenue & Expenses
Visualization of income flow from segment revenue to net income