HNI Corp. (NYSE: HNI) reported Q4 EPS of $1.12, $0.07 better than the analyst estimate of $1.05. Revenue for the quarter came in at $616.1 million versus the consensus estimate of $628.27 million.

Highlights

• Fourth quarter non-GAAP operating margin expanded 80 basis points year-over-year, driven by solid cost control.
• Fourth quarter free cash flow exceeded expectations, strengthening the Corporation’s financial flexibility.
• Fiscal year 2020 guidance assumes relatively stable domestic end markets, benefits of annual productivity and cost savings, and significant investments in future growth and margin expansion.

“Our teams delivered a strong fourth quarter. We generated our best top line growth rate of the year and expanded operating margins despite choppy demand and tariff challenges. Our annual productivity and cost savings initiatives continue to gain momentum and drive improved profitability. Overall, our results show the performance our organization can drive and I am optimistic about what we can accomplish in the future,” said Jeff Lorenger, HNI Corporation, Chairman, President, and Chief Executive Officer.

GUIDANCE:

HNI Corp. sees FY2020 EPS of $2.60-$2.90, versus the consensus of $2.89. HNI Corp. sees FY2020 revenue of $2.3-2.35 billion, versus the consensus of $2.3 billion.

"Looking ahead to 2020, we expect solid revenue growth in both Office Furniture and Hearth Products. Our key markets are showing greater stability; our e-commerce efforts are driving growth; and our recent investments are generating results.

We expect higher volume and our annual productivity and cost savings initiatives to drive improvement in gross profit margin. In line with our long-term strategy, we are increasing our level of investment in key go-to-market initiatives. As a result, operating margin expansion will be less robust over the near-term. These initiatives will support top line growth, margin expansion, and free cash flow generation in the coming years. I am optimistic about the results we can drive in the future,” said Mr. Lorenger.

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