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Leggett & Platt, Incorporated LEG reported first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. On a year-over-year basis, the top line declined, but the bottom line increased.
The quarterly results indicated continued demand softness in the company’s residential end markets due to a challenging macro environment and soft consumer spending. Softening in Automotive and Hydraulic Cylinders further impacted the company’s performance. Although LEG carried out its restructuring and operating efficiency improvement initiatives, the headwinds mentioned above overshadowed the prospects to a great extent.
Despite macroeconomic uncertainties and trade policy concerns, the company is maintaining its sales and adjusted EPS guidance for 2025. While the domestic bedding industry is expected to face more challenges than previously anticipated, the lower volume is likely to be offset primarily by steel-related tariff benefits. The company remains confident in its ability to execute strategic priorities and create long-term shareholder value.
Leggett's Q1 in Details
Leggett reported adjusted earnings per share (EPS) of 24 cents, which topped the consensus estimate of 23 cents by 4.3%. In the year-ago quarter, it reported an adjusted EPS of 23 cents. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Net trade sales of $1.022 billion missed the consensus mark of $1.028 billion by 0.5% and declined 7% from the prior-year quarter’s $1.097 billion (all organic). Volume declined 5% due to continued demand softness in residential end markets, the expected loss of a customer in Specialty Foam, demand headwinds in Automotive and Hydraulic Cylinders, and restructuring-related sales attrition. Raw material-related selling prices and currency impact lowered sales by 1%.
Leggett & Platt, Incorporated Price, Consensus and EPS Surprise
Leggett & Platt, Incorporated price-consensus-eps-surprise-chart | Leggett & Platt, Incorporated Quote
Adjusted EBIT increased 4.6% to $66.6 million from the prior-year quarter’s level of $63.7 million, driven by restructuring benefits, operational efficiency improvements and disciplined cost management. This upside was partially offset by lower volume and metal margin compression.
Adjusted EBIT margin expanded 70 basis points (bps) to 6.5% from the year-ago quarter’s figure of 5.8%. Adjusted EBITDA margin also expanded 80 bps from the year-ago quarter to 9.6%.
Leggett’s Segmental Details
Bedding Products' net trade sales decreased 13% from the year-ago quarter’s level to $390.7 million. Our model predicted trade sales for the segment to decline 9%. A volume decline of 10% was caused by the demand softness in the U.S. and Europe’s bedding markets, expected loss of a customer in Specialty Foam and restructuring-related sales attrition, partially offset by higher trade rod and wire sales. Raw material-related selling prices and currency impact lowered sales by 2%.
Adjusted EBIT margin contracted 50 bps to 3.3%. Adjusted EBITDA margin also contracted 40 bps year over year to 6.7%.
The Specialized Products segment's trade sales decreased 5% from the prior-year quarter’s figure to $300.1 million. Our model predicted trade sales for the Specialized Products segment to decline 5.2%. Volume was down 4% due to declines in Automotive and Hydraulic Cylinders, partially offset by growth in Aerospace. Raw material-related selling price increases added 1%, while currency impact lowered sales by 2%.
Adjusted EBIT margin expanded 310 bps year over year to 10.6%. Adjusted EBITDA margin also grew 340 bps year over year to 14.1%.
Trade sales in the Furniture, Flooring & Textile Products segment declined 1% from the prior-year quarter’s level to $331.3 million. Our model predicted trade sales for the segment to decrease 2.9%. A volume increase of 2% was driven by growth in Textiles. However, this was partially offset by continued weak demand in residential end markets. Raw material-related selling price decrease and currency translation impacted sales by 2% and 1%, respectively.
Adjusted EBIT margin of 6.5% was down 40 bps from the prior year, mainly due to raw material-related pricing adjustments. However, this was partially offset by higher volume. Adjusted EBITDA margin also declined 50 bps to 8%.