Streamlined Priorities Enhance Focus on Profit Growth
• Actions to combat demand pressures associated with geopolitics helped deliver solid first quarter results
• GAAP diluted EPS for Q1 was $(0.55). On a non-GAAP basis, diluted EPS totaled $0.34
• For the full year 2026, low-single digit organic net sales growth is expected in both segments
• Cost management — including the termination and reprioritization of projects at Steelcase, synergy recognition, and legacy network optimization savings will offset lower volume growth expectations and continued investment
• The Corporation expects to deliver a fifth straight year of double-digit non-GAAP EPS growth in 2026
• Expectations of sales growth, strategic initiatives, and synergies support an outlook for multiple years of elevated EPS growth visibility
HNI Corporation (NYSE: HNI) today announced net sales of $1.3 billion and a net loss of $38.8 million for the first quarter ended April 4, 2026.
Highlights
• Solid first quarter results. GAAP diluted EPS totaled $(0.55) and diluted non-GAAP EPS of $0.34 modestly exceeded internal expectations. While volume activity was negatively impacted by geopolitical conditions, especially in the Workplace Furnishings segment, expense control, price-cost, and productivity benefits partially offset volume softness and continued investment in initiatives aimed at driving future growth. GAAP results include the impact of Steelcase purchase accounting, the details of which can be found later in the release. Non-GAAP to GAAP reconciliations follow the financial statements in this release.
• Net sales growth expected in 2026. While industry-specific indicators and internal metrics are encouraging, Workplace Furnishings segment volume is expected to be negatively impacted by effects of the Middle East conflict in the first half of 2026, with price recognition driving low-single digit organic growth for the full year. In Residential Building Products, our structural changes organizing around the consumer and growth investments are expected to drive continued market outperformance, with modest price-driven net sales growth expected in 2026.
• Cost management efforts expected to complement accretion from Steelcase and benefits from network optimization. During the first quarter, the Corporation made certain key decisions pertaining to the Steelcase integration that will have positive longer-term implications. As an example, Steelcase’s multi-year ERP implementation was terminated. This move is part of a broader corporate-wide effort to streamline priorities to focus on profitable growth, while also avoiding disruption, eliminating substantial future ERP investment, and redeploying resources back into the business—toward customer-focused initiatives. In addition, the Corporation began aggressively managing costs across all businesses in response to softer volume growth to begin the year, driven by the current geopolitical uncertainty. The Corporation continues to expect network optimization savings in its legacy Workplace Furnishings businesses to total nearly $30 million (or $0.30 to non-GAAP diluted EPS) over the next three years. Synergies associated with the integration of Steelcase are on track and expected to add $120 million (or $1.20 to non-GAAP diluted EPS) when fully mature.
“Our members continued to focus on controlling the controllables in the first quarter of fiscal 2026. Through focused cost management and benefits of price-cost and productivity, we managed the middle of the income statement and were able to deliver solid first quarter results. This was despite demand softness to begin the year, especially in Workplace Furnishings, amid concerns related to the conflict in the Middle East, the U.S. economy broadly, and the impacts of tariffs specifically. The positive momentum of our on-going strategies, the benefits of our diversified revenue streams, and the merits of our customer-first business model will continue to deliver strong shareholder value.
“In our legacy Workplace Furnishings businesses, first quarter net sales were down about five percent year-over-year on an organic basis, with modest organic growth in our businesses focused on small- and medium-sized workplace customers. The impacts of global macro uncertainty were most prevalent during January and February. Including Steelcase, operating profit was nearly double the prior-year level. Looking ahead, we expect modest organic revenue growth for the full year and solid margin expansion in our legacy Workplace Furnishings businesses, while we continue to invest to drive growth.
“In Residential Building Products, revenue increased slightly more than two percent versus the prior-year period. These are strong results given the ongoing weakness in the new home construction market. First quarter segment operating profit margin expanded 190 basis points year-over-year, reaching 17.6 percent. New construction revenue was down mid-single digits, while remodel-retrofit was up 13 percent, both on a year-over-year basis. Despite expectations of ongoing uncertainty, we remain encouraged about the opportunities tied to the broader housing market and we continue to invest to grow our operating model and revenue streams.
“Our first quarter performance demonstrates the strength of our strategies and our ability to manage daily uncertainty through varying macroeconomic conditions, all while remaining focused on investing for the future. We expect strong results to continue in 2026, driven by our margin expansion efforts and modest organic revenue growth,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
HNI Corporation — First Quarter Summary Comments
• Consolidated net sales increased 125 percent from the prior-year quarter to $1.3 billion, driven by the fourth quarter 2025 acquisition of Steelcase. On an organic basis, net sales decreased 3.2 percent year-over-year. The acquisition of Steelcase increased year-over-year sales by $774.0 million, while the divestiture of HNI India in the second quarter of 2025 decreased year-over-year sales by $7.1 million. A reconciliation of organic net sales, a non-GAAP measure, to net sales follows the financial statements in this release.
• Gross profit margin contracted 260 basis points compared to the prior-year quarter. The decrease was driven by impacts from the acquisition of Steelcase and lower organic net sales volume, partially offset by improved net productivity and favorable price-cost.
• Selling, general, and administrative expenses as a percentage of net sales increased 360 basis points compared to the prior-year quarter. The increase was driven by impacts from the acquisition of Steelcase, lower organic net sales, and increased input costs.
• Acquisition costs of $3.5 million were recorded during the current period in connection with the acquisition of Steelcase. Acquisition costs consist of retention compensation, other professional service fees, and change in control compensation expense adjustments.
• Incremental non-cash purchase accounting adjustments totaled $64.2 million for the current quarter related to the Steelcase acquisition. Of this total, $36.4 million was included in cost of sales and related to the inventory step-up and additional depreciation for the preliminary valuation adjustment to property, plant and equipment. The remaining $27.8 million was included in operating expenses and related to amortization of intangibles and additional depreciation for the preliminary valuation.
• Restructuring and impairment charges of $18.0 million were incurred in the current quarter, primarily related to the termination of Steelcase’s multi-year ERP implementation project, and the Corporation’s network optimization program. In the prior-year quarter, the Corporation incurred $6.4 million of such charges, primarily related to the HNI India business.
• Income tax rate comparability versus the prior-year quarter was primarily impacted by transaction costs associated with the acquisition of Steelcase that are not tax deductible.
• Net income (loss) per diluted share was $(0.55) compared to $0.29 in the prior-year quarter. On a non-GAAP basis, net income per diluted share decreased to $0.34 from $0.44 in the prior-year quarter. The changes were driven by lower organic net sales volume, increased interest expense, and increased shares outstanding, partially offset by impacts from the acquisition of Steelcase, improved net productivity, and favorable price-cost.
Workplace Furnishings — First Quarter Summary Comments
• Workplace Furnishings net sales increased 169 percent from the prior-year quarter to $1.2 billion. On an organic basis, net sales decreased 5.2 percent year-over-year. The acquisition of Steelcase during the fourth quarter of 2025 increased year-over-year sales by $774.0 million, while the divestiture of HNI India in the second quarter of the prior year decreased year-over-year net sales by $7.1 million and lower organic volume partially offset by price.
• Workplace Furnishings operating profit margin of (3.6) percent contracted by 770 basis points versus the prior-year quarter, driven by lower organic net sales, impacts from the acquisition of Steelcase, incremental purchase accounting adjustments, increased restructuring costs, and acquisition costs, partially offset by improved net productivity. On a non-GAAP basis, segment operating profit margin of 4.1 percent contracted 170 basis points year-over-year.
Residential Building Products — First Quarter Summary Comments
• Residential Building Products net sales increased 2.1 percent from the prior-year quarter to $162.1 million, as increased net sales in remodel-retrofit were partially offset by decreased net sales in the new home market.
• Residential Building Products operating profit margin of 17.6 percent expanded by 190 basis points year-over-year driven by improved net productivity and favorable price-cost, partially offset by lower volume.
First Quarter Order Rates
• In the Workplace Furnishings segment, orders in the first quarter decreased one percent compared to the prior-year period organically. Orders from small-to-medium-sized customers were up low single-digits and orders from contract customers were down mid-single digits, versus first quarter 2025 levels on an organic basis. Year-over-year organic order growth improved in March, with five-week average organic order growth, as of the end of the quarter, up high single-digits. Steelcase order patterns were consistent with the legacy Workplace Furnishings trends.
• Orders in the Residential Building Products segment increased four percent compared to the first quarter of 2025. Remodel-retrofit orders outperformed those from the new construction channel. The year-over-year average order growth rate over the final five weeks of the quarter was in line with the quarter overall.
Outlook
• Second quarter net sales. The Corporation expects second quarter 2026 net sales in legacy Workplace Furnishings to increase at a low single-digit rate year-over-year. Including Steelcase, total Workplace Furnishings net sales are expected to increase approximately 155-160 percent versus the prior-year period. In Residential Building Products, second quarter 2026 net sales are expected to decrease at a low single-digit rate compared to the same period in 2025.
• Second quarter non-GAAP diluted earnings per share. Non-GAAP diluted earnings per share in the second quarter of 2026 are expected to decline modestly from 2025 levels. The addition of Steelcase is expected to be net neutral to diluted non-GAAP earnings per share in the quarter. The year-over-year non-GAAP earnings pressure is expected to be driven by lower organic volume and continued investment.
• Second half strength expected. The Corporation’s outlook for 2026 full-year earnings reflects expectations for mid-teens percent diluted non-GAAP EPS growth, with accelerating double-digit earnings growth in the second half of the year. Productivity, cost management, network optimization initiatives, Steelcase accretion, and price-cost benefits are expected to more than offset operating profit headwinds associated with volume pressure and continued investment.
• Double-digit diluted non-GAAP EPS growth again next year, with multiple years of elevated earnings growth visibility beyond 2027. The combination of Steelcase accretion and legacy workplace network optimization initiatives are expected to yield total cumulative savings exceeding $70 million (or $0.70 in diluted non-GAAP EPS) in 2027 and more than $150 million (or $1.50 in diluted non-GAAP EPS) when fully mature.
• Balance sheet. The Corporation remains committed to the reduction of debt levels, payment of its longstanding dividend, and continuing to invest in the business to drive future growth. Net financial leverage is expected to return to pre-deal levels in the 1.0-1.5 times range with two years of the deal
closing.
Concluding Remarks
“Our members remain focused on our strategies, we managed our businesses well, and the Corporation delivered a solid quarter that modestly exceeded our expectations. This was despite order and shipment patterns in our Workplace Furnishings segment that saw clear impact from the geopolitical landscape and resulting uncertainty, and ongoing housing market weakness. As we look forward, we expect volume pressure to persist in the second quarter as macro pressures tied to the conflict in the Middle East and tariffs linger.
“Our current outlook for the remainder of 2026, which is supported by both external macro and industry metrics and by our internal pipeline data, points to accelerating revenue growth in our Workplace Furnishings segment. In Residential Building Products, we expect modest price-driven revenue growth in the second half, despite expectations of ongoing housing market softness. From a profitability perspective, we anticipate both our legacy Workplace Furnishings and our Residential Building Products segments to expand margins in 2026. While we are optimistic about the year and expect another year of double-digit non-GAAP EPS growth, we will remain focused, conservative, and ready to adjust as required. Our outlook demonstrates the anticipated benefits of our ongoing visibility story and our proven ability to manage through changing economic conditions.
“The integration of Steelcase is going well, synergy capture and accretion are on track, and our cultures are melding nicely. We continue to expect modest accretion in 2026, with total non-GAAP EPS benefit reaching $1.20 when fully mature. The benefits of the Steelcase acquisition, the strength of our strategies, and our financial discipline are expected to drive strong free cash flow, which will help us quickly deleverage our balance sheet over the next couple of years.
“Our HNI members remain focused on driving growth and expanding margins. And we will continue to invest for the future with confidence,” concluded Mr. Lorenger.
The full text of HNI’s 1Q26 earnings release, including all tables, may be accessed at investors.hnicorp.com/news. A webcast replay of the company’s May 6 conference call for investors is available on HNI Corporation’s website at
investors.hnicorp.com/events-and-presentations.
About HNI Corporation
HNI Corporation (NYSE: HNI) has been improving where people live, work, and gather for more than 75 years. HNI is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation’s leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation’s website at www.hnicorp.com.