The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how HNI (NYSE: HNI) and the rest of the office & commercial furniture stocks fared in Q1.
The sector faces a tepid outlook as workplace dynamics continue to evolve. Hybrid work means that enterprise demand for office furniture is lower. Consumer demand for the same products likely will not offset the loss from enterprises, as individual workers tend to have less space and need for the sector's wares. The Trump administration also possesses a high willingness to impose tariffs on key partners, which could result in retaliatory actions, all of which could pressure those selling furniture that may feature components or labor from overseas. Lastly, the COVID-19 pandemic showed that there is always a risk that something disrupts supply chains, and companies need contingency plans for this.
The 4 office & commercial furniture stocks we track reported a strong Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 7.7% on average since the latest earnings results.
Best Q1: HNI (NYSE: HNI)
With roots dating back to 1944 and a significant acquisition of Kimball International in 2023, HNI (NYSE: HNI) manufactures and sells office furniture systems, seating, and storage solutions, as well as residential fireplaces and heating products.
HNI reported revenues of $599.8 million, up 2% year on year. This print exceeded analysts’ expectations by 3.3%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ EPS estimates.
“Our first quarter results demonstrate our ability to manage through varying macroeconomic conditions, while remaining focused on the future. And while we expect macro headwinds and demand volatility over the near-term, based on our leading indicators—both external and internal, we expect strong results to continue, driven by our margin expansion efforts and a return of volume growth,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
HNI scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 12.9% since reporting and currently trades at $48.91.
Is now the time to buy HNI? Access our full analysis of the earnings results here, it’s free.
Steelcase (NYSE: SCS)
Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE: SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services.
Steelcase reported revenues of $788 million, up 1.7% year on year, in line with analysts’ expectations. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EPS guidance for next quarter estimates.
The market seems content with the results as the stock is up 2% since reporting. It currently trades at $10.82.
Is now the time to buy Steelcase? Access our full analysis of the earnings results here, it’s free.
Slowest Q1: MillerKnoll (NASDAQ: MLKN)
Created through the 2021 merger of industry icons Herman Miller and Knoll, MillerKnoll (NASDAQ: MLKN) designs, manufactures, and distributes interior furnishings for offices, healthcare facilities, educational settings, and homes worldwide.
MillerKnoll reported revenues of $876.2 million, flat year on year, falling short of analysts’ expectations by 4.6%. It was a disappointing quarter with full-year revenue guidance missing analysts’ expectations.
MillerKnoll delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $18.18.
Read our full analysis of MillerKnoll’s results here.
Interface (NASDAQ: TILE)
Pioneering carbon-neutral flooring since its founding in 1973, Interface (NASDAQ: TILE) is a global manufacturer of modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring that specializes in carbon-neutral and sustainable flooring solutions.
Interface reported revenues of $297.4 million, up 2.6% year on year. This number met analysts’ expectations. It was a strong quarter as it also logged an impressive beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
Interface pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 16.9% since reporting and currently trades at $22.
Read our full, actionable report on Interface here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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