- HNI Corp (NYSE:HNI) reported third-quarter FY22 sales growth of 2.1% year-on-year to $598.8 million, missing the consensus of $642.29 million.
- Workplace Furnishings sales decreased 4.6% Y/Y, and Residential Building Products sales rose 15.5%.
- The gross profit margin expanded 170 basis points Y/Y to 35%. The operating margin expanded 920 basis points to 13.7%, and operating income for the quarter jumped 212.1% to $81.9 million.
- Adjusted EPS of $0.71 beat the analysts' consensus of $0.64.
- HNI held $23.1 million in cash and equivalents as of October 1, 2022. Net cash provided by operating activities for nine months ended October 2, 2022, totaled $33.9 million.
- "We are prepared for a difficult near-term environment and remain committed to our core strategies, which will expand margins in Workplace Furnishings and drive long-term revenue growth in Residential Building Products," said Chairman and CEO Jeff Lorenger.
- In response to softer demand trends, the anticipation of weaker macro conditions, and ongoing efforts to improve long-term profitability, HNI initiated corporate-wide cost savings actions during Q3. The savings are estimated to be $30 million on an annual basis once they become fully mature in early 2023.
- Outlook: HNI expects Q4 non-GAAP earnings to decrease sequentially but modestly exceed year-ago results primarily due to favorable price-cost.
- HNI expects Q4 Workplace Furnishings revenue to decline at a low-teens percent range compared to the prior-year quarter due to reduced demand.
- It expects Q4 Residential building products revenue to drive growth rates in the low-to-mid single-digits.
- Price action: HNI shares closed higher by 1.15% at $28.08 on Friday.
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