HNI Q3 2022 Earnings Report
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
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