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Oct 01, 2022
HNI Q3 2022 Earnings Report
HNI Corporation reported strong earnings growth driven by positive price-cost and improving product mix, with solid performance in Residential Building Products.
Key Takeaways
HNI Corporation announced sales of $598.8 million and net income of $63.1 million for the third quarter ended October 1, 2022. GAAP net income per diluted share was $1.51, while non-GAAP net income per diluted share was $0.71. The company initiated cost savings actions estimated at $30 million annually.
Delivered 65 percent growth in non-GAAP earnings per share year-over-year.
Residential Building Products segment revenue increased 10 percent organically year-over-year.
Residential Building Products segment operating profit increased 19 percent versus the same period a year ago.
Initiated corporate-wide cost savings actions estimated to be $30 million on an annual basis.
HNI
HNI
HNI Revenue by Segment
Revenue by Segment
Workplace Furnishings Revenue
CapyFin.comResidential Building Products Revenue
CapyFin.com Forward Guidance
Broader macroeconomic and recession concerns continue to negatively impact demand in most markets. As a result, the Corporation is lowering its outlook for fiscal year 2022.
Positive Outlook
- Fourth quarter non-GAAP earnings are expected to decrease sequentially from third quarter 2022 levels but modestly exceed year-ago results primarily due to favorable price-cost.
- Pricing benefits and inorganic revenue from acquisitions are expected to drive growth rates in the low-to-mid single-digits in the fourth quarter for Residential Building Products.
- The Corporation expects to maintain a strong balance sheet through the remainder of 2022, and throughout 2023.
- Low leverage and continued free cash flow generation are expected to provide ample capacity for investment, dividend payments, M&A, and share buyback.
- Committed to core strategies, which will expand margins in Workplace Furnishings and drive long-term revenue growth in Residential Building Products
Challenges Ahead
- Broader macroeconomic and recession concerns continue to negatively impact demand in most markets.
- Fourth quarter non-GAAP earnings are expected to decrease sequentially from third quarter 2022 levels
- The Corporation now expects Workplace Furnishings revenue to decline at a low-teens year-over-year rate in the fourth quarter.
- The impact of the previously announced restructuring of an eCommerce business, which is expected to lower fourth quarter revenue approximately seven percent compared to the prior year.
- Residential Building Products fourth quarter outlook is lower than previous expectations with slower demand driving the reduction.
Revenue & Expenses
Visualization of income flow from segment revenue to net income