HNI Corporation Reported Mixed Results for 2Q16

HNI Corporation (HNI) has a market cap of $2.2 billion. It fell by 1.9% to close at $48.71 per share on July 21, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -1.3%, 3.8%, and 37.0%, respectively, on the same day.

HNI is trading 2.8% above its 20-day moving average, 5.7% above its 50-day moving average, and 21.0% above its 200-day moving average.

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 0.13% of its holdings in HNI. The ETF tracks a market-cap-weighted index of growth companies culled from the S&P 400. The YTD price movement of IVOG was 9.0% on July 21.

The Vanguard Small-Cap ETF (VB) invests 0.08% of its holdings in HNI. The ETF tracks the CRSP US Small Cap Index. The market-cap-weighted index includes the bottom 2%–15% of the investable universe.

The market caps of HNI’s competitors are as follows:

• Steelcase (SCS) — $1.7 billion
• Herman Miller (MLHR) — $1.9 billion
• Knoll (KNL) — $1.2 billion

HNI reported fiscal 2Q16 net sales of $536.5 million, a fall of 5.6% compared to net sales of $568.2 million in fiscal 2Q15. Net sales of the Office Furniture and Hearth Products segments fell by 5.0% and 7.8%, respectively, in fiscal 2Q16 compared to fiscal 2Q15.

The company’s gross profit margin and operating income rose by 7.3% and 16.8%, respectively, in fiscal 2Q16 compared to fiscal 2Q15. It reported restructuring expense of $572,000 in fiscal 2Q16 compared to -$560,000 in fiscal 2Q15.

Its net income and EPS (earnings per share) rose to $29.0 million and $0.64, respectively, in fiscal 2Q16 compared to $23.9 million and $0.52, respectively, in fiscal 2Q15.

HNI’s cash and cash equivalents fell by 14.4% and its inventories rose by 35.9%, respectively, in fiscal 2Q16 compared to fiscal 4Q15. Its current ratio fell to 0.99x and its debt-to-equity ratio rose to ~1.7x in fiscal 2Q16, compared to a current ratio and a debt-to-equity ratio of ~1.0x and ~1.7x, respectively, in fiscal 4Q15.

HNI Corporation has made the following projections for fiscal 3Q16 and 2016:

Fiscal 3Q16

• sales in the range of flat to a 3% rise, which includes the impacts of acquisitions and divestitures
• non-GAAP EPS in the range of $0.90–$0.95

Fiscal 2016

• It expects non-GAAP EPS in the range of $2.80–$2.95, which excludes restructuring and transition costs and a non-recurring gain.

Now, we’ll discuss Coty (COTY).