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MUSCATINE, Iowa - On Thursday, HNI Corporation (NYSE:HNI), the workplace furnishings and residential building products manufacturer, reported second-quarter earnings that significantly exceeded analyst expectations, driven by strong volume growth across both business segments.
The company’s shares jumped 4.63% in pre-market trading after the results.
The company posted adjusted earnings per share of $1.11, handily beating the analyst estimate of $0.86. Revenue rose 7% to $667.1 million, surpassing the consensus estimate of $646.42 million. Organic sales increased 7.7% YoY, with the Workplace Furnishings segment growing 8.5% organically and Residential Building Products increasing 5.3%.
"Our members delivered another excellent quarter, despite ongoing tariff-driven volatility," said Jeff Lorenger, Chairman, President, and CEO. "The strength of our strategies, the benefits of our diversified revenue streams, and the merits of our customer-first business model continue to deliver strong shareholder value."
HNI’s second-quarter non-GAAP operating margin expanded to 11.0%, up 200 basis points from the prior year and reaching the highest second-quarter level on record. The improvement was driven by volume growth, profit transformation initiatives, and synergy benefits from the Kimball International acquisition.
The Workplace Furnishings segment, which accounts for about 77% of total revenue, saw operating profit margin expand to 13.1% on a non-GAAP basis, up 120 basis points YoY. Meanwhile, the Residential Building Products segment’s operating margin improved 190 basis points to 15.7%.
Looking ahead, HNI modestly raised its full-year 2025 outlook, now expecting double-digit EPS growth. The company anticipates mid-single-digit sales growth in both segments for the full year, excluding the benefit of an extra week in the fourth quarter.
Management highlighted significant earnings visibility through 2026, with KII acquisition synergies and the ramp-up of its Mexico facility expected to contribute an additional $0.50 to $0.60 of EPS benefit over the next 18 months, on top of the $0.24 EPS benefit already realized in the first half of 2025.
"For the full year 2025, we expect solid mid-single digit revenue growth in both segments, a modestly higher non-GAAP operating margin versus the year-ago period, and double-digit non-GAAP diluted earnings per share growth for the fourth consecutive year," Lorenger added.
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