HNI (HNI) investor relations material

Executive summary

• Q3 net sales rose 133% YoY to $1.593B, including Steelcase; organic sales grew 5.6%. GAAP diluted EPS was $1.23 (+39.8%) and non-GAAP EPS was $1.62 (+47.3%).

• Net income increased to $90.0M from $41.2M; results benefited from productivity, price-cost favorability, and organic volume growth in both segments.

• Both segments delivered volume and order growth; results exceeded internal expectations.

• Management expects FY2026 non-GAAP EPS growth of 20%-25% and double-digit non-GAAP EPS growth again in 2027.

Financial highlights

• Q3 gross profit was $678.5M versus $288.1M; operating income was $136.7M versus $64.6M, and net income was $90.0M versus $41.2M.

• GAAP gross margin rose 50 bps to 42.6%; non-GAAP gross margin increased 60 bps to 42.8%, supported by price-cost and productivity, partly offset by Steelcase mix.

• SG&A was 33.5% of sales, up 220 bps YoY, reflecting Steelcase and higher input costs, partly offset by higher sales.

• 9M net sales increased 126% to $4.413B and operating income rose 22.4% to $192.4M; diluted EPS was $1.40 versus $2.19.

Outlook and guidance

• FY2026 non-GAAP EPS growth is forecast at 20%-25% over FY2025's $3.46; Q4 non-GAAP EPS is expected to rise at a mid-20% rate YoY.

• FY2026 organic revenue growth is expected in the low single digits in both segments.

• Q4 legacy Workplace Furnishings sales are expected to grow at a low-single-digit rate, or mid-single digits excluding the prior-year extra week; consolidated Workplace sales including Steelcase are expected to nearly double.

• Q4 Residential Building Products sales are expected unchanged YoY, or up at a low-single-digit rate excluding the prior-year extra week; full-year non-GAAP margin is expected to expand significantly.

• Double-digit non-GAAP EPS growth is expected in 2027; Steelcase synergies are projected to exceed $130M when mature, and legacy manufacturing optimization savings are expected to total ~$30M over 2026-2028.