HNI Corp. (NYSE: HNI) reported Q2 EPS of $0.44, $0.10 better than the analyst estimate of $0.34. Revenue for the quarter came in at $543.6 million versus the consensus estimate of $525 million.

"Our strong sales momentum continued during the second quarter. Results were better than expected in both our Hearth and Office Furniture businesses. The investments we've made in product, selling, and fulfillment capabilities are paying dividends. I'm pleased with our quarterly results and our progress driving long-term shareholder value," said Jeff Lorenger, HNI Corporation President and Chief Executive Officer.

Outlook

"We expect to continue generating solid top-line growth in the second half of 2018. I like our competitive position and am excited about our opportunities to grow the business and deliver improved earnings for our shareholders. In the short term, we are experiencing additional headwinds from increasing input costs and timing related to our cost savings and productivity initiatives," said Mr. Lorenger.

The Corporation expects full year organic sales to be up 6 to 8 percent. Including the impact of closing and divesting small office furniture companies, full year sales are expected to be up 3 to 5 percent. The Corporation estimates full year non-GAAP earnings per share to be in the range of $2.35 to $2.55, which excludes restructuring and transition costs. This compares to prior guidance of non-GAAP earnings per share of $2.40 to $2.70. The impact of rising input costs and the slower ramp up of cost savings and productivity initiatives are the primary drivers of the reduced earnings outlook.

For the third quarter, the Corporation expects organic sales to be up 4 to 7 percent compared to the same quarter last year. Including the impact of closing and divesting small office furniture companies, third quarter sales are expected to be up 1 to 4 percent. Third quarter non-GAAP earnings per share are anticipated to be in the range of $0.80 to $0.90, which excludes restructuring and transition costs.

GUIDANCE:

HNI Corp. sees FY2018 EPS of $2.35-$2.55, versus the consensus of $2.58.

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