Leggett & Platt Shares Decline Due to Lowered Guidance

CARTHAGE, Mo. - Leggett & Platt (NYSE:LEG) shares fell by 5.4% after the diversified manufacturer reported third-quarter earnings that were below analyst estimates and lowered its annual guidance, citing ongoing weakness in residential end markets and challenges in its automotive business.
The company reported adjusted earnings of $0.32 per share for the third quarter, falling short of the $0.33 analyst consensus. Revenue was $1.1 billion, in line with expectations but down 6% compared to the same period last year.
Leggett & Platt reduced its full-year guidance for 2024, now expecting adjusted earnings per share to be between $1.00 and $1.10; this is below the previous analyst consensus of $1.14. The company also lowered its revenue forecast to $4.3-$4.4 billion, down from the previous range of $4.3-$4.5 billion.
President and CEO Karl Glassman stated, "We expect the weak demand in our residential end markets to continue in the fourth quarter due to a more challenging macro environment and a softening in consumer spending." He added that the company's automotive business continues to face challenges related to the transition to electric vehicles, consumer affordability issues, and an economic slowdown in Europe.
The company reported a 6% decline in organic sales, primarily due to a 4% volume decrease in its key segments. Bed Products sales fell by 8% year-on-year, while the Custom Products and Furniture, Flooring & Textile Products segments experienced declines of 6% and 4%, respectively.
Despite the challenges, Leggett & Platt highlighted progress in its restructuring efforts, paying down $124 million in debt during the quarter. The company now expects to achieve an annual EBITDA benefit of $50-$60 million from these initiatives by the end of 2025, which is higher than its previous estimate of $40-$50 million.