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1. Company Snapshot

1.a. Company Description

HNI Corporation, together with its subsidiaries, manufactures and sells workplace furnishings and residential building products primarily in the United States.The company operates through two segments, Workplace Furnishings and Residential Building Products.The Workplace Furnishings segment offers a range of commercial and home office furniture, including panel-based and freestanding furniture systems, seating, storage, tables, and architectural products under the HON, Allsteel, Beyond, Gunlocke, Maxon, HBF, OFM, Respawn, Lamex, and HNI India brands.


This segment sells its products through independent dealers, wholesalers, office product distributors, e-commerce retailers, and wholesalers, as well as directly to end-user customers; and federal, state, and local governments.The Residential Building Products segment provides various gas, wood, electric, and pellet-fueled fireplaces; inserts; stoves; facings; and accessories primarily for home use under the Heatilator, Heat & Glo, Majestic, Monessen, Quadra-Fire, Harman, Vermont Castings, PelPro, SimpliFire, The Outdoor GreatRoom Company, and Stellar brand names.This segment markets its products through independent dealers and distributors, and corporation-owned distribution and retail outlets.


The company was incorporated in 1944 and is headquartered in Muscatine, Iowa.

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1.b. Last Insights on HNI

HNI Corporation's recent performance faced challenges due to increased scrutiny over its acquisition of Steelcase, Inc. A class action firm, Monteverde & Associates PC, is investigating the merger, which may have contributed to investor uncertainty. Additionally, the company's efforts to exchange $450,000,000 of Steelcase's outstanding notes for new HNI notes may have added to the uncertainty. Despite beating Q3 earnings estimates with $1.1 per share, the company's growth prospects and integration risks remain a concern. The acquisition is expected to close in Q4 2025, subject to customary closing conditions.

1.c. Company Highlights

2. HNI Corporation Delivers Strong Q3 with Margin Expansion

HNI Corporation reported a robust third quarter, with non-GAAP earnings per share increasing 7% year-over-year to $1.1, beating analyst estimates of $1.06. The company's Workplace Furnishings segment saw organic net sales rise 3% year-over-year, driven by growth across all major brands, while Residential Building Products revenue remained roughly unchanged. The company achieved a record third-quarter non-GAAP operating margin of 10.8%, demonstrating effective cost management and pricing strategies.

Publication Date: Nov -21

📋 Highlights
  • Non-GAAP EPS Growth:: 7% year-over-year driven by record 10.8% non-GAAP operating margin.
  • Workplace Segment Growth:: 3% organic net sales increase across all major brands.
  • 2025 EPS Outlook:: Mid-teens percentage growth, with Mexico facility contributing $0.75–$0.80 EPS in 2025-2026.
  • Steelcase Synergies:: $120M in synergies expected, $1.20/share accretion when mature.
  • Residential Backlog:: 13% increase in backlog, supporting high single-digit Q4 growth despite flat revenue.

Segment Performance

The Workplace Furnishings segment orders increased 2% after excluding the estimated impact of prior quarter pull-forward activity and hospitality orders. Adjusted orders from contract customers outperformed those from small- to medium-sized businesses. In Residential Building Products, remodel and retrofit sales grew modestly, with orders increasing 2% and backlog rising 13%, indicating potential for high single-digit growth in the quarter. As Jeffrey Lorenger noted, "The Workplace segment reflects both return to office and non-office verticals," highlighting the company's diversified revenue streams.

Outlook and Guidance

HNI expects continued revenue growth and margin expansion to support ongoing year-over-year EPS improvement. The company anticipates mid-teens percent EPS growth in 2025, driven by investments in growth initiatives, including the ramp-up of its Mexico facility, which is expected to contribute $0.75 to $0.80 to EPS in the 2025-2026 period. With a strong balance sheet and ability to generate continued free cash flow, HNI is well-positioned for future growth.

Valuation and Metrics

With a P/E Ratio of 12.84 and EV/EBITDA of 6.32, HNI's valuation appears reasonable compared to its earnings growth prospects. The company's ROE of 17.21% and ROIC of 11.63% indicate strong profitability. Analysts estimate revenue growth at 4.1% next year, which is lower than the company's expected mid-teens percent EPS growth, suggesting potential for multiple expansion. The Dividend Yield of 3.43% and Free Cash Flow Yield of 10.6% provide a floor for the stock, making it an attractive investment opportunity.

3. NewsRoom

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HNI and Steelcase Announce Election Deadline for Steelcase Shareholders to Elect Form of Merger Consideration

Nov -25

Source: businesswire.com

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$HAREHOLDER ALERT: The M&A Class Action Firm Continues To Investigate Merger--AL, HNI, SCS, and ODP

Nov -05

Source: prnewswire.com

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HNI Corporation (HNI) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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HNI (HNI) Q3 Earnings Beat Estimates

Oct -28

Source: zacks.com

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HNI Corporation Reports Third Quarter 2025 Results

Oct -28

Source: businesswire.com

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HNI Corporation Announces Extension of Exchange Offer

Oct -28

Source: globenewswire.com

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Allsteel Explores the Office as a Hub for Collaboration, Culture, and Connection

Oct -20

Source: globenewswire.com

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HNI Corporation Announces Results of Early Participation in Exchange Offer and Consent Solicitation

Oct -10

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Workplace Furnishing

Expected Growth: 3.0%

HNI Corporation's Workplace Furnishing segment growth is driven by increasing demand for office furniture and hearth products, fueled by a strong job market and rising office construction. Additionally, the company's focus on product innovation, e-commerce capabilities, and strategic acquisitions are contributing to its 3.0% growth rate.

Residential Building Products

Expected Growth: 3.0%

HNI Corporation's Residential Building Products segment growth is driven by increasing demand for new housing, driven by low unemployment and rising wages, as well as a focus on renovation and remodeling activities. Additionally, the company's strategic acquisitions and investments in e-commerce capabilities have expanded its product offerings and improved customer reach, contributing to the 3.0% growth rate.

7. Detailed Products

Office Furniture

HNI Corporation offers a wide range of office furniture products, including desks, chairs, tables, and storage solutions, designed to enhance workplace productivity and comfort.

Hearth Products

HNI Corporation's hearth products include fireplaces, inserts, and accessories, providing warmth and ambiance to homes.

Residential Building Products

The company's residential building products comprise doors, windows, and other exterior building materials, designed to enhance the aesthetic appeal and functionality of homes.

8. HNI Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

HNI Corporation's office furniture products face moderate threat from substitutes, as customers have alternatives such as used or refurbished furniture, but the quality and customization offered by HNI Corporation differentiate its products.

Bargaining Power Of Customers

HNI Corporation's customers have low bargaining power due to the company's strong brand presence, wide distribution network, and customized products, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

HNI Corporation's suppliers have moderate bargaining power, as the company relies on a few large suppliers for raw materials, but it also has a diversified supply chain and long-term contracts to mitigate risks.

Threat Of New Entrants

The threat of new entrants is low in the office furniture industry, as it requires significant capital investment, technological expertise, and established distribution networks, making it difficult for new companies to enter the market.

Intensity Of Rivalry

The office furniture industry is highly competitive, with several established players, including Steelcase, Herman Miller, and Knoll, competing for market share, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 37.97%
Debt Cost 5.81%
Equity Weight 62.03%
Equity Cost 8.26%
WACC 7.33%
Leverage 61.22%

11. Quality Control: HNI Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ennis

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Value: 7.2

Growth: 4.1

Quality: 7.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.0

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REV Group

A-Score: 5.8/10

Value: 4.1

Growth: 6.2

Quality: 6.3

Yield: 4.0

Momentum: 10.0

Volatility: 4.0

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HNI

A-Score: 5.7/10

Value: 7.3

Growth: 4.6

Quality: 5.6

Yield: 6.0

Momentum: 3.0

Volatility: 7.7

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ACCO Brands

A-Score: 5.6/10

Value: 9.2

Growth: 1.8

Quality: 5.6

Yield: 9.0

Momentum: 2.5

Volatility: 5.3

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Steelcase

A-Score: 5.5/10

Value: 6.9

Growth: 4.6

Quality: 4.5

Yield: 7.0

Momentum: 8.0

Volatility: 2.0

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Apogee Enterprises

A-Score: 4.7/10

Value: 6.3

Growth: 6.1

Quality: 4.7

Yield: 5.0

Momentum: 0.5

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.92$

Current Price

40.92$

Potential

-0.00%

Expected Cash-Flows