On July 25, 2024, HNI Corp (HNI, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance. HNI Corp, a provider of office furniture and hearth products, reported net sales of $623.7 million and net income of $36.0 million for the quarter ended June 29, 2024.
Company Overview
HNI Corp is a leading provider of office furniture and hearth products. The company generates the bulk of its revenue from workplace furnishings, which include panel-based and freestanding furniture systems, seating, storage, tables, and architectural products. These products are sold through a national system of dealers, wholesalers, and office product distributors, as well as directly to end-user customers and government entities. The residential building products segment includes a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, and accessories. HNI Corp operates in the United States, Canada, Mainland China, Hong Kong, India, Mexico, and Taiwan.
Performance Highlights
HNI Corp reported GAAP earnings per share (EPS) of $0.75 and non-GAAP EPS of $0.79, marking a 44% year-over-year increase. This performance was driven by continued operating margin expansion in Workplace Furnishings, strong accretion from the Kimball International acquisition, and profit growth in Residential Building Products.
"Our members again demonstrated the organization’s ability to drive strong profit growth. We delivered non-GAAP EPS that was 44 percent higher than the prior-year period, reaching a record level for the second quarter," stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
Financial Achievements
HNI Corp's net sales increased by 10.7% from the prior-year quarter to $623.7 million. The acquisition of Kimball International contributed $80.5 million to the year-over-year net sales increase. The company's gross profit margin expanded by 360 basis points to 41.9%, driven by improved net productivity and the impact of the Kimball International acquisition.
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $623.7 million | $563.5 million | 10.7% |
| Gross Profit % | 41.9% | 38.3% | 360 bps |
| Operating Income | $53.4 million | ($3.6) million | NM |
| EPS (GAAP) | $0.75 | ($0.30) | NM |
| EPS (Non-GAAP) | $0.79 | $0.55 | 43.6% |
Segment Performance
Workplace Furnishings net sales increased by 16.3% from the prior-year quarter to $480.2 million, with an operating margin of 11.3%, up 750 basis points year-over-year. The Residential Building Products segment saw a 4.6% decrease in net sales to $143.5 million, primarily due to housing market weakness. However, the segment's operating profit margin increased by 350 basis points to 13.8%.
Outlook
HNI Corp expects net sales growth to return in both segments during the second half of 2024. Workplace Furnishings net sales are projected to increase at a low-single digit rate year-over-year, while Residential Building Products net sales are expected to grow at a mid-single digit pace. The company anticipates record EPS for 2024, driven by continued profit transformation in Workplace Furnishings, benefits from the Kimball International acquisition, and profit enhancement in Residential Building Products.
"Overall, our strategies, our dedicated member-owners, the strength of our customer-first business model, and our proven ability to manage through all parts of the economic cycle are delivering excellent results," concluded Mr. Lorenger.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from HNI Corp for further details.
