10-Q · May 6, 2026
HNI Corporation's Q1 2026 results show a significant revenue increase of 125% year-over-year, driven largely by the Steelcase acquisition. Despite this growth, the company reported a net loss of $38.8 million compared…
Earnings analysis · 10-Q
HNI earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
HNI's Q2 revenue increased 121% year over year to $1.472 billion, principally from the $806.9 million Steelcase revenue contribution, while GAAP EPS fell to $0.70 from $1.02 and operating margin compressed 390 basis…
Read full summary
HNI's Q2 revenue increased 121% year over year to $1.472 billion, principally from the $806.9 million Steelcase revenue contribution, while GAAP EPS fell to $0.70 from $1.02 and operating margin compressed 390 basis points to 6.3%. Gross margin improved 110 basis points to 44.0% on tariff refunds and productivity, but acquisition accounting, restructuring, higher variable compensation, and sharply higher interest expense constrained earnings conversion. Cash generation weakened materially, with a $32.0 million first-half operating cash outflow and $64.7 million of capex, although management expects liquidity to be adequate for at least 12 months.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.7
What stood out
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Revenue more than doubled with Steelcase
Second-quarter net sales rose 121% year over year to $1.472 billion from $667.1 million, with $806.9 million of the increase attributable to the December 2025 Steelcase acquisition.
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Gross margin expanded 110 bps
Gross margin expanded 110 basis points year over year to 44.0%, driven by 240 basis points of tariff refunds and improved productivity, partly offset by acquisition and restructuring effects.
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Net income grew despite lower GAAP EPS
GAAP net income increased 5.9% to $51.1 million from $48.2 million, although diluted GAAP EPS declined to $0.70 from $1.02 because of a higher share base and acquisition-related costs.
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Residential margins held despite soft sales
Residential Building Products maintained a 15.7% operating margin despite a 1.6% sales decline to $148.7 million; favorable tariff impacts contributed 420 basis points to segment margin.
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Management sees adequate near-term liquidity
Management expects liquidity to fund operations for at least the next 12 months; the revolving credit facility totals $425 million, with $103 million outstanding at July 4, 2026.
What to watch
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Acquisition costs compressed operating margin
Operating margin contracted 390 basis points year over year to 6.3%, as selling and administrative expense rose to 36.2% of sales from 32.3%. The quarter included $21.9 million of purchase-accounting intangible amortization and $17.9 million of restructuring, impairment, and divestiture charges.
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Working-capital use drove negative free cash flow
First-half operating cash flow was an outflow of $32.0 million versus a $43.7 million inflow a year earlier, while capital expenditures increased to $64.7 million from $31.2 million. Calculated free cash flow was negative $96.7 million for the first half.
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Acquisition financing sharply raised interest cost
Net interest expense increased to $23.7 million in Q2 from $6.1 million a year earlier, reflecting higher borrowings used to fund Steelcase. The company had $103 million outstanding under its $425 million revolving facility at July 4, 2026.
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Housing weakness pressured Residential sales
Residential Building Products sales fell 1.6% to $148.7 million as weaker new-home-market demand was only partly offset by remodel-retrofit growth. Management cites housing-market pressure from interest-rate volatility and affordability issues.
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Steelcase integration and restructuring execution risk
The filing reports no new or revised Item 1A risk factors versus the 2025 Form 10-K, but integration execution remains material: first-half restructuring, impairment, and loss-on-divestiture charges were $35.9 million, versus $8.9 million a year earlier.
Management's outlook
The 10-Q provides no quantitative revenue or EPS outlook. Management expects 2026 capital expenditures of approximately $130 million to $140 million, states Steelcase synergy realization remains consistent with expectations, and expects additional legacy Workplace Furnishings network-optimization savings over the next 3 years.
Earlier filings 4
10-K · March 3, 2026
HNI completed a transformative acquisition of Steelcase on December 10, 2025 and reported consolidated net sales of $2.8 billion for fiscal 2025, with workplace furnishings representing $2.2 billion (76%) and…
10-Q · November 5, 2025
HNI reported third-quarter net sales of $683.8 million, up $11.6 million (+1.7%) versus the prior-year quarter, with gross profit of $288.1 million (gross margin ~42.1%). Operating income declined to $64.6 million (down…
10-Q · July 29, 2025
HNI reported Q2 net sales of $667.1M, up from $623.7M in Q2 2024, with gross profit of $286.2M and diluted EPS of $1.02 (vs $0.75). Gross margin expanded to 42.9% and operating margin improved to 10.2% (from 41.9% and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.