Hni Stock Earnings Reports

HNI reported solid Q3 2025 results with non-GAAP EPS of $1.10, up 7% year-over-year, and a record third-quarter non-GAAP operating margin of 10.8%. Organic net sales grew ~3% overall; Workplace Furnishings organic sales +3% with segment margin >12% (driven by profit transformation, KII synergies and modest volume growth), and Residential Building Products revenue roughly flat with a strong 18% segment margin despite continued investments. Orders/backlog momentum: Workplace adjusted orders +2% (backlog +7% YoY) after excluding hospitality volatility; Residential orders +2% with remodel/retrofit up mid-single digits and new construction down low single digits, accelerating late in the quarter. Market commentary: management highlighted improving office fundamentals (higher occupancy, rising leasing/absorption) that should benefit contract business, while housing remains challenged but offers long-term upside; hospitality demand has been volatile due to tariffs. Outlook: Q4 revenue for both segments expected to be high single-digit organic growth; full-year guidance unchanged — HNI expects a fourth consecutive year of double-digit non-GAAP EPS growth and mid-teens EPS growth for 2025. KII synergies and Mexico ramp are expected to contribute $0.75–$0.80 of EPS across 2025–2026. M&A: pending Steelcase acquisition expected to deliver ~$120 million of synergies and approximately $1.20 of ultimate per-share accretion when fully realized; pro forma leverage initially ~2.1x returning to target 1.0–1.5x within 18–24 months. Balance sheet/capital allocation: management expects strong free cash flow to deleverage, maintain dividend, and continue investing for growth. Risks called out: tariff-driven demand volatility (notably in hospitality), macro uncertainty (interest rates, housing market), some timing and mix pressures in back half, and near-term insurance/tax rate headwinds.