HNI Corporation Reports Third Quarter 2026 Results

(NYSE:HNI) HNI Corporation reported net sales of $1.6 billion and net income of $90.0 million for the third quarter ended October 3, 2026. Non-GAAP net income for the quarter was $118.7 million. GAAP diluted earnings per share (EPS) totaled $1.23, while non-GAAP diluted EPS was $1.62. The company attributed its strong third quarter results to SG&A cost management, price-cost benefits, investment timing, and productivity savings, which offset slightly lower-than-expected volume growth. The Workplace Furnishings segment saw volume growth turn positive, with organic net sales growth of six percent, while Residential Building Products achieved nearly five percent net sales growth driven by structural changes and growth investments. HNI continues to expect manufacturing network optimization savings in its legacy Workplace Furnishings businesses to total nearly $30 million, adding an expected $0.30 to non-GAAP diluted EPS in 2026 through 2028. Synergies from the integration of Steelcase are now expected to add at least $130 million of operating profit when fully mature, surpassing the original $120 million target, which is now expected to be achieved by the end of year four. Workplace Furnishings segment GAAP operating margin was 15 percent, an improvement of 250 basis points year-over-year, and non-GAAP operating margin excluding Steelcase expanded 390 basis points year-over-year to a record 16 percent. Including Steelcase, non-GAAP operating income was more than double the prior-year level. Excluding Steelcase, third quarter net sales were up nearly six percent year-over-year. Steelcase integration efforts are ahead of plan, with net sales and orders improved year-over-year, and total synergies expected to reach at least $130 million when fully mature. In Residential Building Products, net sales grew five percent in the quarter, with double-digit growth in the remodel-retrofit business offsetting weakness in new construction. Residential Building Products operating margin expanded by 180 basis points to 19.8 percent, and profit grew 16 percent year-over-year. Consolidated net sales increased 133 percent from the prior-year quarter to $1,592.9 million, driven by the acquisition of Steelcase in December 2025. On an organic basis, net sales increased 5.6 percent year-over-year. The acquisition of Steelcase and a workplace furnishings dealer increased year-over-year net sales by $870.6 million. Gross profit margin expanded 50 basis points to 42.6 percent, and SG&A expenses as a percentage of net sales increased 220 basis points to 33.5 percent. Acquisition and related costs of $0.9 million and restructuring and impairment charges of $7.3 million were recorded in the quarter. Non-cash purchase accounting related to the Steelcase acquisition totaled $24.8 million. Workplace Furnishings net sales increased 174 percent to $1,417.9 million, with operating income of $131.7 million and operating margin of 9.3 percent. Residential Building Products net sales increased 4.8 percent to $175.0 million, with operating income of $34.7 million and operating margin of 19.8 percent. Orders in the Workplace Furnishings segment increased six percent year-over-year, and orders in Residential Building Products grew four percent. For the fourth quarter of 2026, HNI expects legacy Workplace Furnishings net sales to increase at a low-single-digit rate year-over-year, and total Workplace Furnishings net sales (including Steelcase) to nearly double from the prior-year period. Residential Building Products net sales are expected to be roughly unchanged versus the same period in 2025. Non-GAAP diluted EPS for the fourth quarter of 2026 is expected to increase at a mid-20 percent rate from fourth quarter 2025 levels. HNI expects to achieve cumulative Steelcase synergies of $70 million by the end of 2027, with total synergies now expected to exceed $130 million when fully mature.