Hits nails — hard wood initially to penetrate (7)

'hits' is the definition.
(thwacking is a kind of hitting)

'nails hard wood initially to penetrate' is the wordplay.
'nails' becomes 'tacks' (tack is a kind of nail).
'initially' suggests taking the first letters.
'to penetrate' is an insertion indicator.
The initial letters of 'hard wood' is 'hw'.
'tacks' placed around 'hw' is 'THWACKS'.