LEGGETT & PLATT, INCORPORATED—10-Q FOR THE PERIOD ENDED MARCH 31, 2025
Leggett & Platt, Inc. reported its quarterly financial results for the period ended March 31, 2025. The company’s net sales increased 4.5% to $1.23 billion, driven by growth in its Industrial and Commercial segments. Net income was $64.1 million, or $0.48 per diluted share, compared to $56.3 million, or $0.42 per diluted share, in the same period last year. The company’s operating margin expanded 130 basis points to 14.1%, driven by cost savings and pricing initiatives. As of March 31, 2025, the company had $1.14 billion in cash and cash equivalents and $2.45 billion in total debt. The company’s common stock outstanding as of May 1, 2025 was 135,144,514 shares.
Financial Overview of Leggett & Platt, Incorporated
Leggett & Platt, Incorporated is a diversified manufacturer that produces a wide range of engineered components and products found in many homes, offices, and automobiles. The company operates in three main segments: Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products.
Financial Performance
In the first quarter of 2025, Leggett & Platt reported trade sales of $1,022 million, a 7% decrease compared to the same period in 2024. Earnings per share (EPS) was $0.22, down from $0.23 in the first quarter of 2024. Earnings Before Interest and Taxes (EBIT) was $63 million, flat compared to the prior year period.
The decline in sales and earnings was primarily due to continued weak demand in residential end markets, soft demand in the Automotive and Hydraulic Cylinders businesses, and the expected loss of a customer in the Specialty Foam business. These declines were partially offset by higher trade rod and wire sales and growth in the Textiles and Aerospace businesses.
Segment Performance
Bedding Products: This segment saw a 13% decrease in trade sales, with organic sales down 12%. EBIT decreased $6 million, primarily from lower volume, the non-recurrence of a real estate sale gain, and metal margin compression, partially offset by restructuring benefits and lower restructuring costs.
Specialized Products: Trade sales decreased 5%, with organic sales also down 5%. EBIT increased $5 million, driven by disciplined cost management, operational efficiency improvements, and restructuring benefits, partially offset by lower volume and less benefit from a reduction to a contingent purchase price liability.
Furniture, Flooring & Textile Products: Trade sales decreased 1%, with organic sales down 1%. EBIT increased $1 million, primarily from a real estate sale gain, lower restructuring costs, and higher volume, partially offset by raw material-related pricing adjustments and the non-recurrence of a tornado damage insurance gain.
Liquidity and Capitalization
Leggett & Platt ended the first quarter of 2025 with $413 million in cash and cash equivalents, primarily held by its international operations. The company generated $7 million in operating cash flow during the quarter, an increase of $13 million compared to the prior year period.
The company’s total debt was $1.9 billion at the end of the quarter, with an average interest rate of 3.8% and average maturity of 11.1 years. Leggett & Platt has a $1.2 billion commercial paper program, of which $404 million was available for borrowing at the end of the quarter. The company also has a $1.2 billion revolving credit facility that serves as a backup to the commercial paper program.
Restructuring and Divestiture Activities
In 2024, Leggett & Platt committed to a restructuring plan, primarily focused on its Bedding Products segment. The plan includes consolidating 15-20 production and distribution facilities and is expected to generate $60-$70 million in annualized EBIT benefits once fully implemented. The company realized $22 million in EBIT benefits from the plan in 2024 and expects to realize $35-$40 million in 2025.
Additionally, Leggett & Platt entered into an agreement to sell its Aerospace Products Group for $285 million in cash, subject to customary closing conditions and regulatory approvals. The company expects to receive approximately $240 million in after-tax proceeds from the sale.
Outlook and Risks
Leggett & Platt expects overall demand to be down in 2025 compared to 2024 levels due to continued macroeconomic uncertainties, including the potential impact of wide-ranging tariffs on consumer confidence and demand.
Key risks facing the company include:
Goodwill and long-lived asset impairment: A significant portion of Leggett & Platt’s assets consists of goodwill and other long-lived assets, which could be subject to impairment if market conditions or the company’s outlook deteriorates.
Tariff impacts: Leggett & Platt sources a significant amount of materials from foreign countries, including China, which could be impacted by tariffs. The company is working to mitigate these risks through sourcing changes and price adjustments, but tariffs could still have a material negative impact.
Supply chain disruptions: The company has experienced challenges related to freight, logistics, and supply chain issues, which could result in additional costs and delays in delivering products to customers.
Litigation contingencies: Leggett & Platt is exposed to various legal proceedings, and while the company has recorded an immaterial accrual, it estimates reasonably possible losses in excess of accruals could be as high as $15 million.
Climate change risks: Leggett & Platt faces both transition risks, such as changes in laws and regulations, as well as physical risks from severe weather events that could disrupt its operations and supply chain.
Conclusion
Leggett & Platt faced a challenging first quarter of 2025, with declines in sales and earnings across most of its business segments. The company is actively working to restructure its operations and divest its Aerospace business to improve its financial position. However, the company continues to navigate macroeconomic headwinds, supply chain disruptions, and other risks that could impact its future performance. Investors will be closely watching Leggett & Platt’s ability to execute its strategic initiatives and manage these challenges in the coming quarters.
