What happened Shares of office furniture and hearth products company HNI (NYSE: HNI) were slammed on Tuesday. Shares fell as much as 26.3% in the morning but are down about 19.7% at 12:10 p.m. EDT. The stock's decline follows the company's third-quarter earnings release. While HNI reported higher-than-expected revenue and non-GAAP EPS, management said it expected profitability to take a hit in its fourth quarter as it works through "two major challenges," including an increased investment in areas with lower near-term sales and operational transformation initiatives that have proved to be more difficult than expected. Image source: Getty Images. So what Management said these two major challenges will increase costs as a percentage of revenue. As a result, HNI significantly lowered its guidance for full-year non-GAAP earnings per share. It is now expecting non-GAAP EPS for the year to be between $1.88 and $1.95, down from a previous forecast of $2.35 to $2.55. "Lower fourth quarter volume in the supplies-driven business, higher costs related to operational transformations, and unfavorable business and product mix are primarily driving the reduced outlook," the company said about its revised guidance. Now what Management is optimistic that it will work through these challenges successfully. "We are confident we will stabilize our transformations and return to driving cost improvements and continue to grow the top line," said HNI CEO Stan Askren. 10 stocks we like better than HNIWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and HNI wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of October 9, 2017Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.