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Sep 28, 2024
HNI Q3 2024 Earnings Report
HNI Corporation reported strong third quarter earnings, driven by profit transformation and synergy acceleration.
Key Takeaways
HNI Corporation reported net sales of $672.2 million and net income of $47.5 million for the third quarter ended September 28, 2024. Non-GAAP EPS increased 11 percent year-over-year despite lower revenue. Consolidated operating margin expanded 220 basis points on a GAAP basis and 150 basis points on a non-GAAP basis versus the prior-year period.
Strong earnings growth driven by profit transformation initiatives and synergy acceleration.
Workplace Furnishings segment operating margin (GAAP and non-GAAP) reached a 20-year high.
Residential Building Products segment profit grew in the third quarter despite cyclical revenue pressures.
Elevated earnings growth visibility extends through 2026 from initiatives already in progress.
Revenue by Segment
Forward Guidance
Non-GAAP earnings per share in the fourth quarter are expected to decrease from 2023 levels. For the full year, non-GAAP EPS is expected to increase at a rate of 10 percent or more for the third consecutive year, driven by margin expansion in both Workplace Furnishings and Residential Building Products.
Positive Outlook
- Multiple indicators point to improving demand on the horizon.
- HNI will continue to deliver margin expansion in Workplace Furnishings
- HNI will drive long-term revenue growth in Residential Building Products
- The Corporation now expects $80 to $85 million of benefits associated with KII synergies ($60 million) and the ramp of its Mexico facility ($20 to $25 million).
- These initiatives also provide visibility to future earnings growth with an estimated $45 to $50 million benefiting the 2025-2026 period.
Challenges Ahead
- Near-term volume pressures expected to negatively impact fourth-quarter results
- Fourth quarter revenue is expected to decline in both segments versus the prior-year period.
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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