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Oct 02, 2021
HNI Q3 2021 Earnings Report
HNI Corporation reported mixed results for Q3 2021, with strong growth in Residential Building Products and a continuing recovery in Workplace Furnishings, but faced headwinds from labor availability, supply chain disruptions, and inflation.
Key Takeaways
HNI Corporation reported Q3 2021 sales of $586.7 million and net income of $19.2 million. Revenue increased 15.7% year-over-year, driven by growth in both Residential Building Products and Workplace Furnishings. However, earnings per share decreased to $0.43 compared to $0.71 in the prior year due to unfavorable price-cost, return of costs related to temporary actions taken in the prior-year quarter and increased investment spend.
Residential Building Products revenue grew 26% year-over-year, and operating profit increased more than 10% versus Q3 2020.
Workplace Furnishings revenue was up approximately 11% from the third quarter of 2020.
The corporation is expanding capacity by opening a new seating facility in Mexico and continuing domestic hiring.
The corporation completed the acquisition of Trinity Hearth and Home, an installing distributor in North Texas.
Revenue by Segment
Forward Guidance
The Corporation expects consolidated revenue to grow in the mid-to-high single-digit percent range compared to the prior-year quarter. Fourth quarter operating income is expected to be at or slightly below that reported in the third quarter.
Positive Outlook
- Solid consolidated growth is expected.
- Workplace Furnishings revenue is expected to grow.
- Order trends, an elevated backlog, and continued momentum with office re-entry activity support stronger growth.
- Residential Building Products revenue is expected to grow.
- New home construction activity, the outlook for remodel/retrofit demand, and expected benefits tied to multiple growth initiatives, combine to suggest growth rates in the high single-digit percent range.
Challenges Ahead
- Continued impacts from labor availability and supply chain constraints are expected.
- Fourth quarter revenue will be constrained by ongoing labor shortages and supply chain issues.
- Many of the margin pressures experienced in the third quarter of 2021 are expected to persist in the fourth quarter of 2021.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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