HNI (HNI) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales rose 121% year-over-year to $1.47 billion, driven by the Steelcase acquisition, which contributed $806.9 million in incremental sales; organic net sales were flat year-over-year.

• Non-GAAP EPS was $1.27, up 14% year-over-year and in line with expectations; GAAP diluted EPS was $0.70.

• Profitability benefited from operational productivity, net tariff impacts, and cost actions, but was offset by acquisition and restructuring costs.

• Integration of Steelcase is progressing well, contributing to doubled operating profit year-over-year and expected to deliver at least $120 million in synergies when fully mature.

• Order acceleration and improved backlog in Workplace Furnishings signal strengthening demand.

Financial highlights

• Q2 2026 net sales: $1,472.4 million (up 121% YoY); gross profit margin expanded 110 bps to 44.0% (GAAP) and 150 bps to 44.4% (non-GAAP).

• Q2 2026 operating income: $92.1 million (GAAP), $141.4 million (non-GAAP); up 35% and 93% YoY, respectively.

• Non-GAAP EPS for Q2 was $1.27, up 14% year-over-year; GAAP diluted EPS was $0.70.

• Segment operating margin expanded 470 basis points year-over-year to 20.4% (non-GAAP); GAAP operating margin was 6.3%.

• Free cash flow reduced net debt by $100 million; quarter-ending leverage at 2.4x, down from 2.5x last quarter.

Outlook and guidance

• Expecting 20–25% non-GAAP EPS growth for full-year 2026, including net tariff impacts.

• Third quarter 2026 non-GAAP EPS expected to increase mid to high 20% range year-over-year.

• Double-digit EPS growth projected again for 2027, driven by Steelcase synergies and network optimization.

• Leverage expected to return to pre-acquisition levels within 18-24 months of Steelcase deal closing.

• Capital expenditures for 2026 projected at $130–$140 million, focused on technology and manufacturing improvements.