Leggett & Platt Inc (LEG) Q2 2025 Earnings Call Highlights: Navigating Challenges with ...
Bedding Products Sales: Decreased 11% compared to Q2 2024.
Specialized Products Sales: Declined 5% year-over-year.
Furniture, Flooring & Textile Products Sales: Down 2% year-over-year.
Adjusted EBIT: $76 million, up $4 million versus Q2 2024.
Adjusted EPS: $0.30, a 3% increase from Q2 2024 adjusted EPS of $0.29.
Operating Cash Flow: $84 million, a decrease of $10 million versus Q2 2024.
Total Debt Reduction: $143 million in Q2, bringing total debt to $1.8 billion.
Liquidity: $878 million, including $369 million cash on hand.
Restructuring Costs: Expected $15 million to $25 million in 2025, down from prior estimate.
Full Year 2025 Sales Guidance: $4.0 billion to $4.3 billion, down 2% to 9% versus 2024.
Adjusted EBIT Margin Range: Expected between 6.5% and 6.9%.
Cash from Operations: Expected $275 million to $325 million for the year.
Warning! GuruFocus has detected 5 Warning Signs with LEG.
Release Date: August 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Leggett & Platt Inc (NYSE:LEG) reported growth in earnings compared to the previous year, indicating improved financial performance.
The company successfully executed its restructuring plan, leading to strengthened balance sheet and cash flow generation.
Metal margin expansion contributed positively to the company's earnings, supported by the 232 steel tariffs.
The company reduced its total debt by $143 million in the second quarter, improving its financial leverage.
Leggett & Platt Inc (NYSE:LEG) maintained its full-year 2025 sales and adjusted EPS guidance, reflecting confidence in its financial outlook.
Negative Points
Second quarter sales were down 6% compared to the same period last year, driven by soft demand in residential end markets and restructuring-related sales attrition.
Bedding Products segment sales decreased by 11%, with ongoing challenges in mattresses and adjustable bases.
The company faced significant tariff exposure in its domestic adjustable bed business, impacting profitability.
Aggressive competitive discounting in Flooring and Textiles led to pricing adjustments, affecting margins.
The company anticipates continued headwinds in the Bedding segment due to customer sales challenges and retailer merchandising changes.
Q & A Highlights
Q: Can you explain the connection between the consumption number for the Bedding business and your U.S. volume number? A: Karl Glassman, CEO, explained that the U.S. Spring volume was down 9% year-over-year, with about a third of that due to sales attrition from restructuring. Tyson Hagale, President of Bedding Products, added that the specialty foam and adjustable bed businesses were impacted by specific customer challenges and changes in promotional strategies.
Q: Are you seeing an acceleration in metal margins, and is this related to tariffs on imported rod? A: Karl Glassman, CEO, confirmed that metal margins are expanding both sequentially and year-on-year, partly due to the 232 tariffs. He emphasized that the expansion is sustainable and beneficial for U.S. steel manufacturers.
Q: What changes led to the decision to retain some facilities initially slated for closure in the restructuring plan? A: Karl Glassman, CEO, and Tyson Hagale, President of Bedding Products, noted that the decision was based on evaluating customer relationships and market dynamics, which led to adjustments in their restructuring plan to better align with current opportunities and risks.
Q: How do you assess the health of the consumer, and what are your expectations for volume and demand in the second half of the year? A: Karl Glassman, CEO, mentioned that consumer confidence improved as the second quarter progressed, with strong promotional periods like Memorial Day and the 4th of July. However, the impact of tariffs on consumer spending remains uncertain.
Q: How are you managing price-cost dynamics across segments in light of tariffs? A: Karl Glassman, CEO, stated that they are working with suppliers to absorb tariff impacts and passing through pricing where necessary. He emphasized that tariffs are expected to be a net positive for the company, with pricing power maintained across business units.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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