Leggett & Platt, Incorporated Q4 FY2024 earnings call

• Karl Glassman congratulated Sam Smith on his promotion. 2024 was a year of significant change with a restructuring plan focused on bedding, home furniture, flooring, and hydraulic cylinders. Teams achieved $22 million in EBIT benefit from restructuring, with $48 million in restructuring costs incurred. Product innovation remained a core strength with healthy product pipelines. Restructuring activities continued into 2025 with ongoing initiatives in bedding, flooring, and hydraulic cylinders. Ben Burns discussed Q4 and full-year 2024 financials, including sales, EBIT, EPS, and cash flow. Mentioned progress on restructuring plan with updated cost and benefit expectations for 2025.

In the fourth quarter of 2024, sales were $1.1 billion, down 5% year-over-year. Bedding products segment sales decreased 6%, specialized products declined 5%, and furniture, flooring, and textile products were down 4%. For the full year 2024, sales decreased 7% to $4.4 billion. Bedding products segment sales were impacted by residential end market weakness, while specialized products and furniture, flooring, and textile products also faced soft demand. EBIT for the fourth quarter was $44 million, and full-year EBIT decreased due to goodwill impairment charges. Revenue contributions by segment: Bedding products, Specialized Products, and Furniture, Flooring, and Textiles each had respective sales declines in Q4 and full-year 2024.

2025 sales expected to be $4.0 billion to $4.3 billion, down 2% to 9% from 2024. Volume expected to be down low to mid-single digits across segments. EPS expected to be $0.83 to $1.24, with adjusted EPS $1.00 to $1.20. Full-year adjusted EBIT margin range 6.4% to 6.8%. Cash from operations expected to be $275 million to $325 million. Restructuring costs expected to be approximately $30 million in 2025, with incremental EBIT benefit of $35 million to $40 million in 2025 and $5 million to $10 million in 2026.

• Tariff threats, particularly related to adjustable bed production in Mexico and textiles purchases from China. Macro-economic uncertainties including consumer confidence weakness, inflation reigniting, interest rates leveling out, household affordability issues, and low housing turnover. Demand challenges in residential end markets impacting sales in bedding, furniture, flooring, and textiles segments.

Q: Susan Maklari asked about the bifurcation in the bedding market and its implications for recovery.

A: Karl Glassman and Tyson Hagale discussed the significant import of innersprings and foam mattresses at the low end, with a gap in mid-price points, and how recovery may see consumers move towards quality products.

Q: Susan Maklari inquired about the increase in EBIT benefit from restructuring and potential upside.

A: Karl Glassman thanked teams for restructuring efforts, noting theoretical upside from running more volume through efficient assets.

Q: Ben Burns was asked about segment margins and seasonality in 2025.

A: Ben Burns discussed segment volume and margin expectations, seasonality with Q1 and Q4 being lower, and factors like stock comp expense, retirements, bad weather, and tariffs impacting Q1 earnings.

Q: Bobby Griffin asked about bedding segment restructuring and adjustable beds.

A: Tyson Hagale and Karl Glassman discussed bedding footprint, trade rod usage, and adjustable bed mix issues related to macroeconomic factors.

Q: Keith Hughes inquired about bedding guide and adjustable beds.

A: Karl Glassman and Tyson Hagale explained bedding segment underperformance due to macroeconomic factors like consumer confidence and housing turnover, and adjustable bed mix issues.

Q: Peter Keith asked about tariffs, imports, and their impact.

A: Karl Glassman and Tyson Hagale discussed tariff impacts on steel pricing and downstream products, and import issues with finished mattresses affecting open coil products.

Q: Susan Maklari asked about specialized products and consumer health.

A: Sam Smith discussed aerospace growth, hydraulics challenges, automotive market dynamics, and Karl Glassman addressed consumer health concerns impacting demand for consumer-focused businesses.