Supplies Business Stabilizing, says HNI

Supplies Business Stabilizing, says HNI

HON and Allsteel brand owner HNI has said its office furniture supplies-driven business should grow in the double digits in the fourth quarter.

This type of shorter-cycle, more transactional selling model through dealer resellers, wholesalers and online channels has been a volatile area for HNI in recent quarters, but the company pointed to an improving trajectory driven by e-commerce efforts. As a result, this side of the business is expected to grow in the double digits in the fourth quarter.

E-commerce represents about 5% of HNI’s supplies business, but is has been growing at a 30% clip so far this year.

In Q3, supplies fell by around 2%, but HNI’s office furniture revenue was up almost 4% on an organic basis to $485 million after a 12% uptick in the contract channel. The large-project market has been relatively strong, but HNI said it expected the growth rate to decline in the fourth quarter.

Q3 adjusted operating profit in office furniture was $51.7 million, a 13% year-on-year increase. Adjusted operating margin climbed by 100 basis points to 10.7% due to improved pricing and productivity, although it should be noted that sales volumes were down. — (OPI)