Building products maker HNI's Q2 sales, EPS beats expectations

Overview

• HNI Q2 net sales rise 7% to $667.1 mln, beating analyst expectations

• Adjusted EPS for Q2 increases 41% to $1.11, exceeding estimates

• Growth driven by volume increases and synergy benefits from Kimball acquisition

Outlook

• Company expects Q3 net sales growth in Workplace Furnishings and Residential Building Products segments in low-single digits

• HNI expects productivity benefits and volume growth to drive Q3 EPS yoy increase

• HNI sees full-year 2025 mid-single-digit net sales growth in both segments

• Company anticipates double-digit EPS growth for full-year 2025

Result Drivers

• VOLUME GROWTH - Strong volume growth in Workplace Furnishings segment drove sales increase, per CEO Jeff Lorenger

• SYNERGY BENEFITS - Synergies from Kimball International acquisition and Mexico facility ramp-up contributed to earnings growth

• PRODUCTIVITY IMPROVEMENTS - Improved net productivity supported profit margin expansion, despite unfavorable price-cost dynamics

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the business support supplies peer group is "buy"

• Wall Street's median 12-month price target for HNI Corp is $63.00, about 16.7% above its July 23 closing price of $52.50

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 12 three months ago

Press Release: ID:nBwcd953Fa