MUSCATINE, Iowa – Office and contract furniture giant HNI reported $679.8 million in fourth quarter consolidated net sales, a gain of 19% from last year, largely thanks to its acquisition of Kimball last year. Not counting the acquisition, organic sales fell 6.4%.
Earnings per share rose 23% from last year, while operating margin expanded 410 basis points. Reasons for the improved margin were price-cost improvement, productivity gains and benefits from recent cost savings initiatives.
“We made outstanding progress in 2023 and finished the year on a strong note, delivering greater than 50% earnings growth in the fourth quarter,” said CEO Jeff Lorenger in an earnings report. “Our Workplace Furnishings profit transformation plan continues to pay dividends and drove segment fourth quarter operating margin to pre-pandemic levels. The synergy capture associated with the Kimball acquisition is ahead of schedule; moreover, we now expect total synergies to be $10 million higher than our initial projection. In Residential Building Products, our actions to support profitability fueled margins to near record levels despite housing market weakness.”
Workplace furnishings’ net sales rose 39.7% from the prior year to $490.7 million. Without Kimball, which added $147.4 million in quarterly sales, sales fell 2.3%. The company’s residential building products division saw sales fall 13.1% to $189.1 million, which the company attributed to housing market weakness.
For the full year, consolidated net sales increased 3.1% from last year to $2.43 billion. Organically, and without Kimball, sales fell 10.6% primarily due to declines in residential building products. The Kimball acquisition increased year-over-year sales by $361.4 million.
Workplace furnishings sales for the full year increased 17.1% but fell 4.2% organically. Residential building product sales fell 20.8% from last year to $693.7 million.