Q2 2024 HNI Corp Earnings Call Transcript
Key Points
- HNI Corp (HNI) reported a record non-GAAP EPS of $0.79 for Q2 2024, exceeding internal expectations and marking a 44% increase year-over-year.
- Workplace Furnishings segment achieved a multi-decade high operating margin of 11.9%, reflecting strong productivity gains and efficiency improvements.
- The acquisition of Kimball International (KI) has been highly accretive, contributing significantly to earnings and providing new growth opportunities.
- Residential Building Products segment posted a 17% year-over-year increase in non-GAAP operating profit, despite ongoing challenges in the housing market.
- HNI Corp (HNI) expects revenue growth in both Workplace Furnishings and Residential Building Products segments in the second half of 2024, driven by improving market dynamics and strategic initiatives.
- The outlook for Workplace Furnishings revenue growth has been revised down from mid-single digits to low-single digits for the second half of 2024, primarily due to timing issues in the contract space.
- Despite positive pre-order metrics, the translation of orders in the Workplace Furnishings segment is taking longer, indicating potential delays in revenue realization.
- New construction in the Residential Building Products segment has been slower than expected, reflecting ongoing affordability pressures and a mix of housing challenges.
- The company faces ongoing volatility in order trends, particularly in the contract business, which could impact future revenue growth.
- HNI Corp (HNI) has acknowledged that the market for fireplaces in new single-family homes remains flat, with affordability and construction lags posing challenges to growth in this segment.
Thank you for standing by. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the HNI Corporation second-quarter results conference call. (Operator Instructions)
Thank you. Mr. McCall, you may begin your conference.
Good morning, my name is Matt McCall. I'm Vice President, Investor Relations and Corporate Development for HNI Corporation. Thank you for joining us to discuss our second quarter fiscal 2024 results. With me today are Jeffrey Lorenger Chairman, President and CEO, and Marshall Bridges, Senior Vice President and CFO.
Copies of our financial news release and non-GAAP reconciliations are posted on our website. Statements made during this call that are not strictly historical facts are forward-looking statements, which are subject to known and unknown risks.
Actual results could differ materially from the financial news release posted on our website includes additional
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