MUSCATINE, Iowa — HNI Corporation has announced net sales of $683.8 million and net income of $41.2 million for the third quarter ended September 27, 2025.

Third quarter total net sales increased two percent, and organic net sales increased three percent, both on a year-over-year basis. Consolidated third quarter 2025 operating margin contracted 80 basis points on a GAAP basis but expanded 10 basis points on a non-GAAP basis, reaching an all-time high for the third quarter. The improvement was driven by profit transformation initiatives, core productivity gains, synergy benefits, and operating expense control. Non-GAAP to GAAP reconciliations follow the financial statements in this release.

The Corporation continues to realize significant savings from the Kimball International (“KII”) acquisition synergies and from the ramp-up of its Mexico facility. These two initiatives are expected to contribute a total of $0.75 to $0.80 to diluted non-GAAP EPS in 2025-2026.

Workplace Furnishings orders were up two percent year-over-year, when excluding the impact of orders placed by customers ahead of tariff-related price increases and hospitality orders. Quarter-ending backlog was up seven percent versus the same period of 2024, also excluding hospitality orders. Third quarter Residential Building Products orders increased two percent compared to the prior year period, led by strength in the remodel retrofit space. Order patterns improved as the quarter progressed.

The corporation reduced debt by $120 million during the quarter, in advance of the anticipated closing of the acquisition of Steelcase. As a result, gross debt leverage at the end of the third quarter was 0.9x, as calculated in accordance with the Corporation’s debt agreements.

The corporation continues to expect the acquisition of Steelcase to close before the end of 2025. This combination brings together two companies with highly complementary capabilities, dealer networks, brand portfolios, and customer segments. For further information see the previously shared HNI investor briefing here.

During a conference call, Chairman, President, and Chief Executive Officer Jeff Lorenger stated: “Our members delivered another strong quarter, despite ongoing tariff-driven volatility and continuing macro uncertainty. The positive momentum of our strategies, the benefits of our diversified revenue streams, our focus on items within our control, and the merits of our customer-first business model continue to deliver strong shareholder value.

“In the Workplace Furnishings segment, organic net sales increased three percent year-over-year, fueled by growth across all major brands. We delivered similar organic growth rates in our brands focused on small- and medium-sized businesses and on contract customers. Our adjusted order rates were up slightly in the quarter, year-over-year, and adjusted segment backlog increased seven percent from the third quarter of 2024. Third quarter profitability benefited from our profit transformation efforts, recognition of KII synergies, and modest volume growth, offset somewhat by continued growth investments. Non-GAAP segment operating profit margin expanded 40 basis points year-over-year and exceeded 12 percent. Looking ahead, we expect year-over-year revenue growth in the segment to accelerate in the fourth quarter, with continued year-on-year margin expansion, while we continue to invest to drive growth.

“In Residential Building Products, revenue was roughly unchanged versus the prior-year period. Consistent with expectations discussed on last quarter’s earnings call, the third quarter segment operating profit margin contracted year-over-year, driven by continued investment, among other items. New construction revenue was down slightly, while remodel-retrofit grew slightly, 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. Third quarter segment order and backlog growth, the strength of our market-leading positions, and our unique operating model support our expectations of revenue and profit growth in the fourth quarter of 2025.

“Our third quarter performance demonstrates the strength of our strategies and our ability to manage through varying macroeconomic conditions and daily uncertainty, while remaining focused on investing for the future. We expect strong results to continue, driven by our margin expansion efforts and continued volume growth."

Outlook

The Corporation's outlook below excludes expected impacts from the pending Steelcase acquisition.

Fourth quarter net sales. 

The Corporation expects fourth quarter 2025 net sales in Workplace Furnishings to increase at a high single-digit rate year-over-year. In Residential Building Products, fourth quarter 2025 net sales are expected to increase at a high-single digit rate compared to the same period in 2024. These projected growth rates include the benefit of an extra week in the fourth quarter of 2025.

Fourth quarter non-GAAP diluted earnings per share. 

Non-GAAP diluted earnings per share in the fourth quarter of 2025 are expected to increase slightly from 2024 levels. This improvement is expected to be driven by price-cost, volume growth, and productivity benefits, which will be partially offset by increased investment levels and insurance-related expenses.

Double-digit diluted non-GAAP EPS growth in 2025 and elevated earnings growth visibility through 2026. 

The Corporation’s outlook for 2025 full year earnings reflects expectations for mid-teens percent diluted non-GAAP EPS growth. In addition to increased profits from volume growth, KII synergies and the ramp-up of the Mexico facility are expected to continue to drive significant savings. These two initiatives are expected to contribute a total of $0.75 to $0.80 to diluted non-GAAP EPS in 2025-2026.

Balance sheet. 

The Corporation reduced debt during the quarter, in advance of the anticipated closing of the pending acquisition of Steelcase. Following the closing, strong cash flow generation and available borrowing capacity will continue to provide the Corporation with significant financial flexibility. The Corporation remains committed to payment of its longstanding dividend and continuing to invest in the business to drive future growth.