HNI Margins Drive Adjusted EPS Beat
Before the open, HNI reported 4Q23 results, beating on adjusted EPS and roughly in line on the consolidated revenue line. Adjusted EPS was $0.98, well ahead of our estimate of $0.84 and consensus of $0.83. The adjusted number excluded ~$0.50 of restructuring asset impairment and acquisition-related costs. Revenue was $679.8 million, up 19.5% Y/Y, just below our estimate, and about $5 million below consensus. Residential Building Products (RBP) revenue fell 13.1% versus the same period a year ago to $189 million but was ahead of our estimate by $9 million. Workplace Furnishings (WF) revenue was about $10 million lower than we expected. On the operating margin line, RBP (Hearth) delivered a staggering 22.3% operating margin, up 240 bps versus the adjusted operating margin in the prior year and 430 bps better than we expected. WF adjusted operating margin rose 6.4% Y/Y but fell sequentially and missed our expectations. A summary of the results is shown below. We will have revised estimates after the conference call at 11:00 am ET.HNI provides office furniture and hearth products. The company's Office Furniture segment designs, manufactures, and markets a range of workplace furnishings. The company's portfolio includes panel-based and freestanding furniture systems and complementary products such as seating, storage, tables, and architectural products. The company provides office panel system products, benching, freestanding tables, storage, and social collaborative products. The company's Hearth Products segment manufactures and markets prefabricated fireplaces, hearth stoves, and related products. The company's line of hearth products includes a range of gas, wood, electric, and pellet fueled fireplaces, inserts, stoves, facings, and accessories.
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