Research Desk Line-up: Avery Dennison Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 1, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on HNI Corp. (NYSE: HNI), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=HNI, following the Company's posting of its third quarter fiscal 2017 operating results on October 23, 2017. The maker of office furniture and fireplaces reported a 10.6% organic gain in sales, while it also provided guidance for Q4 2017, FY17, and FY18. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Business Equipment industry. Pro-TD has currently selected Avery Dennison Corporation (NYSE: AVY) for due-diligence and potential coverage as the Company announced on October 25, 2017, its preliminary unaudited financial results for Q3 2017 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Avery Dennison when we publish it.
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HNI announced sales for the third quarter ended September 30, 2017, of $599.5 million, up 2.5% compared to net sales of $584.6 million in Q3 2016. On an organic basis, the Company's sales jumped 10.6%. The net impact of acquisitions and divestitures of small office furniture companies decreased sales by $42.5 million compared to the prior year's same quarter. HNI's revenue numbers topped analysts' estimates by $14.43 million.
During Q3 2017, HNI's GAAP gross profit margin decreased 100 basis points compared to the prior year quarter to 36.9%. Of this decline, 50 basis points were driven by unfavorable product and business mix and input cost inflation, while the remaining drop of 50 basis points was attributed to higher restructuring and transition costs. The Company's selling and administrative expenses decreased as a percentage of sales to 28.3%, due to lower incentive-based compensation and the impact of divestitures.
For Q3 2017, HNI recorded $2.3 million of restructuring costs and $3.6 million of transition costs in connection with facility closures and structural realignments. Of these charges, $5.1 million was included in cost of sales. The Company also recorded a $6.0 million non-recurring gain from the sale and license of a previously acquired intangible asset and a $0.8 million gain on the sale of a closed facility in the reported quarter.
HNI reported net income of $37.27 million, or $0.84 per diluted share, for Q3 2017 compared to net income of $33.81 million, or $0.74 per diluted share, in Q3 2016. The Company recorded non-GAAP net income per diluted share of $0.82 compared to $0.80 in the prior year's same quarter. HNI's earnings beat Wall Street's expectations of $0.80 per share.
HNI's Segment Review
During Q3 2017, Office furniture's net sales grew 2.3% to $465.3 million on a y-o-y basis. On an organic basis, the segment sales advanced 12.9%, driven by increases in the North American contract, supplies-driven, and international businesses.
In the reported quarter, Office furniture's GAAP operating profit margin decreased 130 basis points to 8.5%. Of this decline, 50 basis points were driven by unfavorable product and business mix, input cost inflation, and strategic investments, and the remaining decrease of 80 basis points was due to higher restructuring and transition costs.
For Q3 2017, the Hearth products' net sales gained 3.4% to $134.1 million driven by increases in the new construction and retail businesses. The segment posted operating profit of $28.7 million, up 50.4% versus operating profit of $19.1 million in Q3 2016. Hearth products' GAAP operating profit margin increased 670 basis points to 21.4%, driven by structural cost reductions and higher volume as well as non-recurring gains and lower restructuring and transition costs.
For Q4 2017, the Company is forecasting sales to be flat to down 3%. HNI's upcoming quarter organic sales, which exclude the impacts of acquisitions and divestitures, are expected to be flat to up 3%. The Company's Q4 2017 non-GAAP earnings per share are anticipated to be in the range of $0.38 to $0.45.
For FY17, HNI is forecasting non-GAAP earnings per share to be in the range of $1.88 to $1.95, which excludes restructuring and transition costs and other non-recurring gains. This compares to the prior guidance of non-GAAP earnings per share of $2.35 to $2.55.
For FY18, the Corporation estimates non-GAAP earnings per share to be in the range of $2.15 to $2.65 with consolidated organic net sales up 2% to 5%.
At the close of trading session on Tuesday, October 31, 2017, HNI Corp.'s stock price rose slightly by 0.18% to end the day at $34.22. A total volume of 193.72 thousand shares were exchanged during the session. The Company's shares are trading at a PE ratio of 22.98 and have a dividend yield of 3.33%. At Tuesday's closing price, the stock's net capitalization stands at $1.50 billion.
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SOURCE: Pro-Trader Daily