MUSCATINE, Iowa – Workplace furnishings maker HNI Corp. announced second quarter sales of $621.7 million and a year-over-year increase in consolidated net sales of 21.8%.
On Thursday, July 28, the Muscatine-based office furniture manufacturer released its earnings report for the quarter ended July 2. HNI’s 2Q report highlighted strong sales that drove earnings growth in the second quarter as well as its divestiture from its China- and Hong Kong-based Lamex office furniture business.
“Our members delivered strong top- and bottom-line performance in the second quarter while we invested to strengthen our operational network and go-to-market capabilities,” HNI Chairman President and CEO Jeff Lorenger said in the earnings release. “We continued to improve our price-cost position, which also contributed to our profit growth. Our strategic initiatives focused on driving growth and simplifying our businesses have momentum and are positioning us for long-term success.”
In the second quarter report, HNI also highlighted the Lamex sale, noting that proceeds of the $75 million transaction completed this month would be used to repay existing debt – providing HNI additional financial flexibility.
Also in the quarter, HNI completed the acquisition of a Raleigh, North Carolina-based installing distributor. Once the deal closes, the corporation will have 27 installing-distributor locations nationwide supporting its residential building products business. In addition, the corporation returned more than $53 million to its shareholders in dividends and share repurchases.
HNI’s growth was supported by $215.1 million in residential building products sales – a 29.3% increase from the prior year quarter, according to the report. Workplace Furnishings net sales also increased 18.2% from the prior-year quarter to $406.7 million.
Workplace Furnishings orders also increased by 4% year-over-year. Order growth softened late in the quarter and was stronger from contract customers than small-to-medium-sized customers, the report said. Residential Building Products orders also were up 14% compared to the prior-year period with new construction order rates outperforming remodel/retrofit activity.
Despite its second quarter growth, the company said it is lowering its second half outlook due to “broader macroeconomic and recession concerns” that it said are “negatively impacting demand in key markets.” Even in that challenging environment, however, the report said HNI still expects strong revenue and profit growth in the second half compared to the prior year.
“Although the operating environment is becoming more challenging, we are staying focused on our long-term strategies,” Mr. Lorenger said. “We expect strong earnings growth in 2022 while maintaining a strong balance sheet. We continue to improve our long-term competitive position as we make progress on our core strategies of expanding margins in Workplace Furnishings and growing revenue in Residential Building Products. Our experienced team is prepared to confront an increasingly difficult economic environment, while driving our strategic initiatives.”