Leggett & Platt, Incorporated Q2 FY2025 earnings call

• Introduced Steve West as new VP of Investor Relations and promoted Cassie Branscum. - Second quarter results: Earnings grew vs last year, balance sheet strengthened, cash flow generated. Restructuring plan progress: Bedding restructuring mostly complete, Flooring Phase 2 consolidation steady, Hydraulic Cylinders manufacturing efficiency improvements. Company-wide restructuring to be substantially complete by year-end. Strategic efforts: Sold small Mexico Work Furniture operation, on track to close Aerospace transaction. Navigated tariff landscape, leveraging global footprint, pricing actions, and pursuing domestic demand.

Bedding Products sales decreased 11% compared to Q2 2024, with strong trade rod and wire sales offset by weakness in mattresses and adjustable bases. Specialized Products declined 5% year-over-year, with Aerospace growth of 6% offset by declines in Automotive and Hydraulic Cylinders. Furniture, Flooring & Textile Products sales were down 2%, with Work Furniture and Textiles showing positive growth but offset by declines in home furniture and flooring. Bedding's U.S. Spring volume was down mid-single digits, Specialty Foam and Adjustable Bed were impacted by a customer and retail changes. Specialized Products' Aerospace grew 6% but Automotive and Hydraulic Cylinders declined. Furniture, Flooring & Textile Products' Work Furniture and Textiles grew, but Home Furniture and Flooring declined.

• Restructuring costs revised to $15M-$25M in 2025 (down from prior $30M-$40M), total projected $65M-$75M. - Full year 2025 sales guidance $4.0B-$4.3B (down 2%-9% vs 2024). Adjusted EPS $0.88-$1.17. Adjusted EBIT margin 6.5%-6.9%, cash from operations $275M-$325M. Expect to repay commercial paper later this year using Aerospace divestiture proceeds and operations cash.

• Tariff volatility impacting consumer confidence and demand. Reciprocal tariff enforcement uncertainty. Disruption risk in rare earth minerals supply chain. Aggressive competitive discounting in Flooring and Textiles leading to pricing adjustments.

Q: Bobby Griffin from Raymond James asked about connecting Bedding consumption to U.S. volume and metal margin.

A: Tyson Hagale explained U.S. Spring volume, Specialty Foam and Adjustable Bed impacts, and Karl Glassman noted metal margin expansion due to 232 tariffs and sustainability.

Q: Charles Perron-Piché from Goldman Sachs asked about consumer health, price cost dynamics, and segment operating margin.

A: Karl Glassman discussed consumer confidence improvement, pricing pass-through for tariff impacts, and Ben Burns provided segment-wise sales volume and margin expectations.

Q: Peter Keith from Piper Sandler asked about Bedding industry improvement, mattress imports, and SG&A leverage.

A: Tyson Hagale and Karl Glassman talked about Bedding industry improvement, tariff impact on mattress imports, and Benjamin M. Burns noted SG&A leverage from restructuring.

Q: Keith Hughes from Truist Securities asked about Home Furniture performance.

A: Sam Smith discussed bifurcation in Home Furniture, impact of price points, and start-stop nature of Asian operations due to tariffs.