HNI Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated net sales for the third quarter of 2026 were $1.6 billion, a 133% increase year-over-year, driven by the Steelcase acquisition; organic net sales increased 5.6%.
• GAAP diluted EPS was $1.23, up 39.8% year-over-year; Non-GAAP diluted EPS was $1.62, up 47.3% year-over-year.
• GAAP net income was $90.0 million compared to $41.2 million in the prior-year quarter; Non-GAAP net income was $118.7 million.
• GAAP operating income was $136.7 million (112% increase YoY); Non-GAAP operating income was $173.1 million (134% increase YoY).
• GAAP gross profit margin was 42.6% (up 50 basis points YoY); Non-GAAP gross profit margin was 42.8% (up 60 basis points YoY).
• SG&A expenses as a percentage of net sales were 33.5% GAAP (up 220 basis points YoY) and 31.9% Non-GAAP (up 60 basis points YoY).
• Restructuring and impairment charges were $7.3 million in the current quarter versus $0.8 million in the prior-year quarter.
• Acquisition and related costs were $0.9 million in the current quarter versus $8.3 million in the prior-year quarter.
• Net debt levels were reduced meaningfully during the quarter following the Steelcase acquisition.

Guidance and Future Outlook:

• Full-year 2026 organic net sales growth expectations remain in the low-single-digit range for both segments.
• Non-GAAP diluted EPS growth for full-year 2026 is expected to be 20-25%, marking the fifth straight year of double-digit growth.
• Fourth quarter 2026 net sales in legacy Workplace Furnishings are expected to increase at a low-single-digit rate year-over-year; total Workplace Furnishings sales (including Steelcase) are expected to nearly double.
• Fourth quarter 2026 net sales in Residential Building Products are expected to be roughly unchanged versus the prior-year period, including a three percentage point headwind from an extra week in 2025.
• Fourth quarter 2026 Non-GAAP diluted EPS is expected to increase in the mid-20 percent range from the prior-year quarter.
• Double-digit Non-GAAP diluted EPS growth is expected for 2027, with cumulative Steelcase synergies of $70 million expected by the end of 2027.
• Total Steelcase synergies are now expected to exceed $130 million when fully mature, with the original $120 million target expected to be achieved by the end of year four.
• Legacy manufacturing network optimization savings are expected to total nearly $30 million in 2026, with cumulative benefits reaching $20 million in 2027 and $30 million in 2028.
• Price-cost neutrality is expected to return in 2027 after temporary inflationary pressure in 2026.

Business Segments and Product Lines:

• Workplace Furnishings: Net sales increased 174% to $1.4 billion; organic sales grew 5.9%. Orders increased 6% year-over-year, with contract customers outperforming small and medium-sized businesses. GAAP operating margin was 9.3% (down 280 basis points YoY); Non-GAAP operating margin was 11.7% (down 60 basis points YoY).
• Residential Building Products: Net sales increased 4.8% to $175.0 million; orders grew 4% year-over-year. Remodel-retrofit revenue increased double-digits, offsetting weakness in new construction. GAAP operating margin was 19.8% (up 180 basis points YoY); Non-GAAP operating margin was 20.2% (up 220 basis points YoY).
• Steelcase Integration: Synergy capture is progressing ahead of plan. Net sales and orders improved year-over-year. International markets face headwinds from geopolitical turmoil and inflation, partially offsetting cost actions.
• Acquisitions: The Steelcase acquisition (completed December 2025) contributed $870.6 million to year-over-year sales growth. A workplace furnishings dealer was acquired in the current quarter.

Market and Competitive Landscape:

• Workplace Furnishings segment volume growth turned positive in the third quarter, fueled by price recognition and improved net productivity.
• Residential Building Products continued to outperform the market despite a challenging housing backdrop, driven by a lean operating model and growth investments.
• Order patterns in both segments showed solid year-over-year improvement, with pre-order activity, orders, and backlog providing optimistic leading indicators.
• Steelcase order growth was stronger than legacy Workplace Furnishings trends.

Risks and Challenges:

• Temporary price-cost pressure from accelerating inflation is expected to offset synergy upside in the near term.
• Geopolitical turmoil and war-driven revenue pressure are slowing earnings improvement in Steelcase's international markets.
• Ongoing housing market softness presents headwinds for the Residential Building Products segment.
• Forward-looking statements involve risks including integration challenges, economic conditions, trade policy, supply chain disruptions, and cybersecurity threats.

Management Commentary and Tone:

• Jeff Lorenger, Chairman, President, and CEO, stated that results significantly exceeded internal expectations due to volume growth, cost management, and price-cost benefits.
• Management expressed confidence in the "profit transformation efforts" in legacy Workplace Furnishings and the "strength of our growth strategies."
• The tone was optimistic regarding the integration of Steelcase, noting synergy capture is ahead of plan and the business is positioned for significant accretion in 2027 and beyond.
• Management emphasized a "customer-first business model" and the ability to manage through changing economic conditions while maintaining financial discipline.

Other Key Points:

• The Corporation acquired Steelcase Inc. in December 2025, which is the primary driver of the 133% consolidated sales growth.
• Non-cash purchase accounting totaled $24.8 million for the current quarter related to the Steelcase acquisition.
• The Corporation maintains a strong balance sheet and is committed to paying its longstanding dividend.
• Capital expenditures for the nine months ended October 3, 2026, were $91.1 million.
• Net cash flows from operating activities for the nine months ended October 3, 2026, were $163.3 million.
• Dividends paid for the nine months ended October 3, 2026, were $77.6 million.
• Purchase of HNI Corporation common stock for the nine months ended October 3, 2026, was $5.6 million.