HNI Corp. (NYSE: HNI) reported Q4 EPS of $0.98, $0.15 better than the analyst estimate of $0.83. Revenue for the quarter came in at $679.8 million versus the consensus estimate of $684.85 million.

Outlook

2024 non-GAAP earnings per share are expected to increase solidly year-over-year primarily driven by continued margin expansion in Workplace Furnishings and accretion from Kimball International.
2024 demand environment. The Corporation expects 2024 organic revenue to grow at a low-single-digit rate in both Workplace Furnishings and Residential Building Products. For Workplace Furnishings, this outlook assumes demand conditions remain generally in-line with those experienced in the second-half 2023. In Residential Building Products, the Corporation expects growth in new construction to be partially offset by continued declines in remodel/retrofit.
2024 impact of Kimball International. The Corporation expects KII to add $215 to $225 million of incremental revenue to 2024 and be solidly accretive to earnings.
Balance Sheet. The Corporation expects to further reduce leverage and improve its already strong balance sheet during 2024 through modest debt reduction and continued EBITDA growth. Low leverage and consistent cash flow generation will provide the Corporation with substantial capacity for capital deployment. The Corporation’s current priorities for capital deployment are reinvesting in the business, funding dividends, and pursuing share buybacks and M&A opportunities.
First quarter non-GAAP earnings per share are expected to increase year-over-year, with margin expansion and accretion from Kimball International more than offsetting macro-driven top line pressure. The Corporation expects first quarter Workplace Furnishings organic revenue to be down in the low-single digits versus the same quarter of 2023. KII is expected to add $125 to $130 million of revenue. In Residential Building Products, the Corporation expects first quarter revenue to be down in the low- to mid-teens year-over-year. This primarily reflects the impact from unwinding the elevated remodel-retrofit backlog in the year-ago period, partially offset by forecasted growth in new construction.

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