Executive Summary

Q3 2026 primary-source materials (8-K press release and earnings call transcript) are not yet available. This recap synthesizes HNI’s latest reported quarter (Q3 2025) and the prior two quarters, with S&P Global consensus to frame expectations into 2026. We will update upon release of Q3 2026 documents.
Q3 2025 delivered an EPS beat despite a slight revenue miss vs consensus: non-GAAP EPS $1.10 vs $1.07* and revenue $683.8M vs $691.5M*; EBITDA came in below consensus. Record third-quarter non-GAAP operating margin of 10.8% underscored solid execution.
Management reiterated “elevated earnings visibility” through 2026, now calling for mid-teens % growth in 2025 non-GAAP EPS and highlighting $0.75–$0.80 of cumulative EPS benefit from KI synergies and Mexico through 2025–2026.
Q4 2025 outlook: high-single-digit sales growth in both segments and slightly higher non-GAAP EPS YoY, aided by backlog and an extra week, partly offset by investment and insurance costs.
Strategic catalyst: pending Steelcase acquisition expected to close before year-end 2025 with $120M synergies and ~$1.20/sh accretion at maturity; leverage expected to ~2.1x at close and return to 1.0–1.5x in 18–24 months.

What Went Well and What Went Wrong

What Went Well
- Record third-quarter non-GAAP operating margin of 10.8% and 7% YoY non-GAAP EPS growth as productivity, transformation, and synergy benefits offset macro/tariff noise. “This non-GAAP EBIT margin was the highest on record for the third quarter.”
- Workplace Furnishings: organic sales +3% with non-GAAP segment margin >12%; backlog +7% YoY (ex-hospitality), supported by improving office fundamentals and return-to-office traction.
- Residential Building Products maintained strong profitability (18.0% op margin) with orders +2% YoY and strengthening remodel/retrofit activity exiting the quarter.
What Went Wrong
- Top-line slightly missed Street and EBITDA trailed: revenue $683.8M vs $691.5M* and EBITDA ~$94.4M vs $98.4M*; GAAP operating margin compressed 80 bps YoY on acquisition-related costs.
- SG&A deleveraged +160 bps YoY on one-time Steelcase transaction costs ($8.3M) and higher inputs; GAAP EPS -10% YoY due to non-deductible deal costs.
- Continued tariff-driven volatility and hospitality order lumpiness required adjusted order/backlog metrics; mix also weighed near-term margins (more project/system business).

Financial Results

HNI headline metrics by quarter

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$599.8	$667.1	$683.8
GAAP Diluted EPS ($)	$0.29	$1.02	$0.88
Non-GAAP Diluted EPS ($)	$0.44	$1.11	$1.10
GAAP Operating Margin %	4.1%	10.2%	9.4%
Non-GAAP Operating Margin %	5.3%	11.0%	10.8%

Q3 2025 actuals vs S&P Global consensus

Metric	Actual	Consensus*	Outcome
Revenue ($USD Millions)	$683.8	$691.5*	Slight miss
EPS ($, Primary/Non-GAAP context)	$1.10	$1.07*	Beat
EBITDA ($USD Millions)	~$94.4	~$98.4*	Miss

Values with asterisks retrieved from S&P Global.

Segment performance

Segment Metric	Q2 2025	Q3 2025
Workplace Furnishings – Net Sales ($M)	$516.0	$516.9
Workplace Furnishings – Operating Income ($M)	$65.8	$62.5
Workplace Furnishings – Operating Margin % (GAAP)	12.8%	12.1%
Workplace Furnishings – Operating Margin % (Non-GAAP)	13.1%	12.3%
Residential Building Products – Net Sales ($M)	$151.1	$166.9
Residential Building Products – Operating Income ($M)	$23.7	$30.0
Residential Building Products – Operating Margin %	15.7%	18.0%

KPIs and demand indicators

KPI	Q1 2025	Q2 2025	Q3 2025
Workplace Furnishings orders YoY	Flat; contract +15% ex-hospitality	+1% (ex-hospitality; contract > SMB)	-3% headline; +2% ex-hospitality/pull-forward
Workplace Furnishings backlog YoY	+16%	+5%	+7% (ex-hospitality)
Residential Building Products orders YoY	+8%	-2% (improved into May/June)	+2% (R&R led; improved through qtr)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP EPS growth	FY 2025	“Double-digit %” EPS growth expected	Mid-teens % EPS growth expected	Raised
Net sales growth – Workplace Furnishings	Q4 2025	—	High single-digit YoY (benefits from backlog + extra week)	New
Net sales growth – Residential Building Products	Q4 2025	—	High single-digit YoY (pricing primary driver)	New
Non-GAAP EPS	Q4 2025	—	Slight increase YoY (offset by investments and insurance)	New
Second-half tax rate	2H 2025	—	24.4% (full-year 23%)	Updated
Leverage post-transaction	Post SCS close	—	Net leverage ~2.1x at close; target 1.0–1.5x in 18–24 months	New
Dividend policy	Ongoing	Maintain dividend	Reaffirmed commitment to longstanding dividend	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Return-to-office and office demand	Q1: RTO momentum; backlog +16% . Q2: “business-as-usual” mindset returning; pent-up demand; SMB rebound; hospitality tariff pause	Castle swipe data at post-COVID highs; top 10 Class A markets ~98% peak-day occupancy; net absorption >6M sq ft in Q3; vacancy falling as new office growth cycle begins (JLL/KPMG data cited)	Improving
Tariffs & hospitality volatility	Q2: Tariff-related demand pause in hospitality; adjusted orders/backlog ex-hospitality	Continued tariff-driven volatility; hospitality excluded from adjusted metrics; pipeline building for 2026	Volatile but stabilizing
Synergies & cost programs (KII, Mexico)	Q1: +$0.70–$0.80 EPS over 2025–2026; Q2: ~$0.24 realized 1H25; leaning to upper end	$0.75–$0.80 EPS total expected across 2025–2026; $45–$50M recognized over 2025–2026 (more in 2025)	Building
Steelcase acquisition	—	Expected close before YE25; $120M synergies; ~$1.20/sh accretion when mature; keep front-end commercial engines intact during integration	Execution focus
Residential Building Products	Q1: RBP orders +8%; Q2: orders -2% but improving; margin expansion	RBP orders +2% YoY; backlog growth and remodel strength into Q4; 18.0% margin	Gradual improvement

Management Commentary

“Our non-GAAP operating margin expanded 10 basis points year over year, 10.8%. This non-GAAP EBIT margin was the highest on record for the third quarter.”
“Adjusted [Workplace Furnishings] orders… increased 2%… adjusted segment backlog… up 7% from the third quarter of 2024.”
“Castle Card Swipe data… reached post-COVID highs… Class A buildings in the top 10 markets approaching 98% peak-day occupancy… JLL estimates more than 6 million square feet was absorbed on a net basis in the third quarter of 2025… office vacancy rates are falling… a new office growth cycle.”
“KI synergies and the ramp of our Mexico facility are expected to continue to drive significant savings… expected to contribute a total of $0.75 to $0.80 of EPS in the 2025–2026 period.”
On Steelcase: “We currently expect synergies to reach $120 million and ultimate accretion to total $1.20 per share when fully mature…”

Q&A Highlights

Steelcase accretion: ~$1.20/sh corresponds to $120M synergy plan; management confident and open to upside if additional savings are identified during integration.
KI/Mexico contribution cadence: $45–$50M recognized across 2025–2026 with slightly more in 2025; total $0.75–$0.80 EPS expected for 2025–2026.
Office cycle headroom: Industry volumes still ~30–35% below pre-pandemic on a pure volume basis; even recovering half could drive years of mid-single-digit volume expansion.
Q4 moving pieces: Revenue broadly in line with prior expectations; mix shift to project/system work near term is dilutive, with ancillary follow-on expected next quarter; insurance pressure and a higher 2H tax rate (24.4%) noted.
Residential demand: Remodel/retrofit accelerating, backlog up; unit growth expected in Q4 despite a tough macro; retail season favorable ex-West Coast.

Estimates Context

Q3 2025 vs Street: EPS beat ($1.10 vs $1.07*) despite a revenue miss ($683.8M vs $691.5M*); EBITDA below consensus (~$94.4M vs ~$98.4M*).
FY consensus baseline: FY2025 EPS 3.55* and revenue ~$2.65B*; FY2026 EPS 4.06* and revenue ~$2.75B*. With Q4 guided to high-single-digit sales growth in both segments and slightly higher non-GAAP EPS YoY, Street models may tilt toward maintaining FY25 EPS near mid-teens growth and assessing upside from integration synergies in 2026.
Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

Quality of earnings: Record third-quarter non-GAAP margin (10.8%) and an EPS beat despite a small revenue shortfall show disciplined execution and cost control.
Demand setup improving: RTO and office absorption metrics are strengthening; WF backlog +7% YoY ex-hospitality supports Q4 growth, with 2026 hospitality pipeline building.
2025 guide firmer: Upgraded to mid-teens % non-GAAP EPS growth, supported by synergies and Mexico productivity; Q4 guided to high-single-digit sales growth in both segments.
Watch mix/tax/SG&A headwinds: Near-term mix tilts to project/system work (margin dilutive), insurance costs and a 24.4% 2H tax rate temper EPS flow-through.
Strategic catalyst: Steelcase combination (expected close before YE25) with $120M synergies and ~$1.20/sh accretion; maintaining front-end commercial focus during integration reduces disruption risk.
Residential resilience: 18% margin with improving orders and favorable remodel trends into Q4 underpins earnings durability through macro noise.
Update trigger: Upon release of Q3 2026 materials, revisit trajectory, integration progress, and synergy capture timing to recalibrate FY26 EPS path.

Note on source availability: Q3 2026 earnings documents were not available as of this writing; this recap is based on HNI’s Q3 2025 8-K press release and full earnings call, plus Q1/Q2 2025 disclosures and calls for trend analysis.

HNI CORP (HNI)·Q3 2026 Earnings Summary