Leggett & Platt, Incorporated Q3 FY2025 earnings call

• Karl Glassman noted solid results despite soft residential demand, reaffirmed full-year guidance, and highlighted progress on strategic initiatives like restructuring, cost management, and balance sheet strengthening via Aerospace divestiture.
• Ben Burns discussed third quarter sales, segment performance, EBIT, and balance sheet, reaffirmed full-year guidance, and provided details on restructuring benefits, sales attrition, and real estate proceeds.
• Tyson Hagale and Sam Smith provided insights on Bedding, Specialized, and Furniture segments, including market stability, innovation pipeline, and growth areas like private label finished bedding and GEO textiles.

Third quarter sales were just over $1 billion, down 6% year-over-year. Bedding product sales decreased 10% year-over-year but improved 3% sequentially; Specialized product sales declined 7%; Furniture, Flooring and Textile product sales were flat. In Bedding Products, sales weakness at a certain customer and retailer changes drove volume declines in adjustable bed and specialty foam. U.S. spring unit volume was in line with industry but domestic volume negative year-over-year. Specialized Products saw modest sales declines in automotive and hydraulic cylinders. Furniture, Flooring and Textiles had continued growth in textiles and Work Furniture offset by home furniture and flooring declines.

Reaffirmed midpoint of sales and adjusted EPS guidance. Sales expected $4.0 billion to $4.1 billion (down 6% to 9% vs 2024). Earnings per share $1.52 to $1.72 and adjusted earnings per share $1 to $1.10. Adjusted EBIT margin expected 6.4% to 6.6%, cash from operations ~$300 million. CapEx $60 million to $70 million this year, returning to normalized levels longer term.

Import issues, wide-ranging tariffs driving inflation, consumer confidence impact, supply chain disruptions, customer demand disruptions. Also, misclassification of shipments and understated product values as challenges for domestic manufacturers competing against imports.

Q: Talk about the benefit from cost actions and restructuring and future outlook for Bedding demand.

A: Ben Burns discussed restructuring execution meeting/exceeding expectations, EBIT benefits, sales attrition reduction, and real estate proceeds. Karl Glassman and Tyson Hagale talked about Bedding segment challenges, innovation pipeline, and future growth from innovation.

Q: On Furniture segment sequential improvement and end customer behavior across price points.

A: Sam Smith discussed sequential improvement in Home Furniture due to normalization post tariffs, and continued divergence in performance with higher price points more stable and lower price points under pressure.

Q: On Bedding segment steel rod volume inflection and growth opportunities.

A: Tyson Hagale explained steel rod volume inflection due to elimination of billet sales, and Karl Glassman mentioned long-term growth opportunity in finished bedding.

Q: On organic growth opportunities, capital allocation, and segment margins.

A: Karl Glassman and others discussed organic growth in finished bedding, GEO textiles, and Work Furniture; Ben Burns talked about long-term net debt leverage target of 2x and potential M&A in textiles; Benjamin Burns provided details on segment margin changes for Bedding, Specialized, and Furniture Flooring and Textile segments