HNI Corporation ( HNI - Free Report) , a Zacks Rank #5 (Strong Sell) company has two reportable core operating segments: office furniture and hearth products. They are the second largest office furniture manufacturer in the United States and the nation's leading manufacturer and marketer of gas- and wood-burning fireplaces. Recent Earnings Data Last Monday, HNI posted Q3 17 earnings where they beat both the Zacks consensus earnings and revenue estimates. On a year over year basis the company saw gains in net sales +2.5%, operating income +11.7%, and diluted EPS +13.5%. Negative Future Outlook In the earnings report, management lowered their 2017 non-GAAP EPS guidance from $2.35-2.55 to $1.88-1.95 for several reasons. First, the company is expecting lower volumes in Q4 in the supplies driven business (office furniture). Second, increased costs in operating expenses; which is expected to continue into the first half of 2018. Third, management is expecting an unfavorable environment for business and product mix in the near term. These issues are expected to negatively impact both the top and bottom lines into 2018. Management’s Take According to Stan Askren, Chairman, President and CEO, “ We are expecting a significant decline in our fourth quarter profit as we work through two major challenges. First, we continue to confront highly dynamic conditions in our supplies-driven office furniture business, resulting in increased investment and lower near-term sales. Second, our operational transformations have been more difficult than anticipated, resulting in higher costs.." "We are confident in our ability to meet these challenges. Our supplies-driven business has market access, brands, and scale unmatched by its competition, even in this new environment. We are establishing direct service capabilities which will provide economic advantages to our dealer partners with improved responsiveness and delivery. We are confident we will stabilize our transformations and return to driving cost improvements and continue to grow the top line Price and Earnings Consensus Graph As you can see, the stock price was improving as of late, but the recent negative guidance caused both the stock price and future earnings estimates to decline.