Positive Q4 for HNI

Positive Q4 for HNI

(FEBRUARY 20, 2020) Manufacturer HNI has reported organic growth of almost 6% in its office furniture segment for the fourth quarter of 2019.

The group’s Q4 office furniture sales were just under $450 million, up by 4.6% as reported and by 5.9% excluding several small dealer divestments. Organic growth in the contract channel was 3% while the supplies-driven side of the business was up 8.5%. This supplies furniture number was less than the double-digit growth HNI had predicted in its third quarter results – the HON brand owner blamed this on lower-than-expected e-commerce sales during the holiday period.

Adjusted operating profit for the quarter jumped by 39% to $37 million, representing a 200 basis-point improvement in adjusted operating margin to 8.2%. HNI said this was driven by pricing, productivity gains and lower core SG&A spend, partially offset by lower volume, higher input costs and unfavourable product mix.

During the quarter, HNI recorded $1.2 million of restructuring costs in connection with “structural realignments” in its office furniture segment.

For the full year, office furniture sales were up organically by 0.8% to $1.7 billion. Adjusted operating profit was $106.5 million, up 13.3% versus 2018 while adjusted operating margin climbed by 80 basis points to 6.3%.

For 2020, HNI is forecasting office furniture sales to be up between 2-4% year on year. - (OPI)