Joining me on the line today from HNI Corporation are Kurt Tjaden, Vice President and Chief Financial Officer, and Stan Askren, Chairman, President and CEO. Stan and Kurt will review the results and then open up the call for questions.
Before we begin, please be advised that statements made by the corporation during this call that are not strictly historical facts are forward-looking statements. Forward-looking statements are subject to known and unknown risks. Actual results could differ materially from expected results. Additional information concerning factors that could affect actual results can be found in the conference call presentation posted to the HNI Corporation website. The corporation assumes no obligation to update any forward-looking statements made during the call.
I now have the pleasure of turning the call over to Stan Askren. Stan?
Stanley AskrenGood morning everyone. I’ll share an assessment of the second quarter of 2011 and provide some outlook thoughts regarding third quarter, while Kurt Tjaden, our CFO will then open the call up for questions. We executed well and delivered solid results in the second quarter. Sales in our office furniture contract and international businesses remained especially strong and exceeded our expectations with 25% top line growth primarily driven by large projects. Overall sales in our supplies business declined 5% year-over-year. Core demand in our supplies-driven business was relatively flat, consistent with uncertainty in small business confidence. The quarter was adversely impacted by a substantial inventory reduction of $12 million by our large wholesale partners, who took advantage of our streamlined fulfillment model and their initiatives to improve their return on invested capital. Our Hearth business significantly exceeded expectations. Remodel-retrofit sales increased 32% as remodeling activity improved and our alternative fuel products were constantly impacted by higher oil prices. The new construction channel was down 11%, due to the difficult housing market and the prior year benefit comparison of the home buyer tax credit.