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LEGGETT & PLATT INC (LEG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered slight top- and bottom-line beats versus consensus, with revenue of $1.022B and adjusted EPS of $0.24; EBIT margin expanded 50 bps YoY to 6.2% and adjusted EBIT margin expanded 70 bps to 6.5 . EPS and revenue modestly exceeded Street estimates (EPS $0.218, revenue ~$1.020B), a small but positive surprise driven by restructuring benefits and disciplined cost management, partially offset by volume pressure and metal margin compression . Values retrieved from S&P Global.*
  • Full-year 2025 sales and adjusted EPS guidance were maintained ($4.0–$4.3B; adjusted EPS $1.00–$1.20), but assumptions shifted to lower volumes (especially bedding) offset by steel-related tariff benefits, implying near-term resiliency with macro caution .
  • Management emphasized ongoing restructuring (realized ~$14M incremental EBIT benefit in Q1) and portfolio focus (signed agreement to sell Aerospace; expected cash proceeds ~$240M after tax) to support deleveraging and potential future capital returns post-close .
  • Tariffs are expected to be a net positive in aggregate (expanded rod/wire margins and demand), though management cautioned about inflation, consumer confidence, and discretionary demand risks; bedding remains soft and adjustable bases face disadvantage versus import competition .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBIT rose to $66.6M (+$3M YoY) and adjusted EBIT margin improved to 6.5% (+70 bps YoY), driven by restructuring benefits, operational efficiencies, and disciplined cost control .
  • Specialized Products segment delivered strong profitability: adjusted EBIT $31.8M (+34% YoY) and margin 10.6% (+310 bps), reflecting cost discipline and restructuring benefits despite modest volume declines .
  • Tariff dynamics are supporting rod/wire demand and metal margins; mills are “sold out,” providing offset to residential softness and aiding Geo Components through strong civil construction demand .

What Went Wrong

  • Organic sales declined 7%, with volume down 5% on continued weakness across residential end markets, softness in Automotive and Hydraulic Cylinders, and restructuring-related sales attrition; raw-material pricing and FX each reduced sales by ~1% .
  • Bedding Products underperformed: trade sales -13% YoY, adjusted EBIT -24% YoY, with volume -10% on market softness, Specialty Foam customer exit, and attrition; metal margin compression also weighed on profitability .
  • Adjustable beds face tariff-driven disadvantages versus import competitors; management expects broader tariff-related inflation/consumer confidence headwinds even if aggregate net impact is positive .

Financial Results

Quarterly Performance vs YoY and Sequential

MetricQ1 2024Q4 2024Q1 2025
Trade Sales (Revenue, $USD Billions)$1.097 $1.056 $1.022
Diluted EPS ($)$0.23 $0.10 $0.22
Adjusted EPS ($)$0.23 $0.21 $0.24
EBIT Margin (%)5.7% 4.1% 6.2%
Adjusted EBIT Margin (%)5.8% 5.3% 6.5%
Cash from Operations ($USD Millions)$(6.1) $122.3 $6.8

Actual vs S&P Global Consensus (Q1 2025)

MetricConsensusActualSurprise
Revenue ($USD)$1,019,806,750*$1,022,100,000 +$2,293,250*
EPS ($)$0.2175*$0.24 +$0.0225*
# of Estimates (EPS / Revenue)4 / 4*——

Values retrieved from S&P Global.*

Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentQ1 2024 Trade Sales ($MM)Q1 2025 Trade Sales ($MM)YoYQ1 2024 Adjusted EBIT ($MM)Q1 2025 Adjusted EBIT ($MM)YoYQ1 2024 Adj EBIT MarginQ1 2025 Adj EBIT Margin
Bedding Products$448.0 $390.7 (13%) $17.1 $13.0 (24%) 3.8% 3.3%
Specialized Products$315.9 $300.1 (5%) $23.7 $31.8 +34% 7.5% 10.6%
Furniture, Flooring & Textile$333.0 $331.3 (1%) $22.9 $21.7 (5%) 6.9% 6.5%

KPIs and Cash/Liquidity

KPIQ1 2025
Net Debt / TTM Adjusted EBITDA (x)3.77x
Total Debt ($MM)$1,936.4
Cash & Equivalents ($MM)$412.6
Total Liquidity ($MM)$817 (Cash $413 + RCF capacity $404)
Operating Cash Flow ($MM)$6.8
Capex ($MM)$13.3
Dividends Paid ($MM)$6.7
Avg Diluted Shares (MM)138.6

Non-GAAP Adjustments (Q1 2025)

  • Restructuring charges: $6.9M; gain on sale of real estate: $3.2M; adjusted EPS impact +$0.02 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SalesFY 2025$4.0–$4.3B $4.0–$4.3B Maintained
EPS (GAAP)FY 2025$0.83–$1.24 $0.85–$1.26 Slightly raised range top/bottom
Adjusted EPSFY 2025$1.00–$1.20 $1.00–$1.20 Maintained
Volume (overall)FY 2025Down low to mid-single digits Down low to high-single digits Lowered
Volume (Bedding midpoint)FY 2025Down mid-single digits Down low double digits Lowered
Volume (Specialized midpoint)FY 2025Down mid-single digits Down mid-single digits Maintained
Volume (FF&T midpoint)FY 2025Down low single digits Down low single digits Maintained
Raw material pricing net of FXFY 2025Low single-digit reduction to sales Flat to low single-digit increase to sales Raised
D&AFY 2025$135M $135M Maintained
Net interest expenseFY 2025$70M $70M Maintained
Effective tax rateFY 202525% 25% Maintained
Diluted sharesFY 2025139M 139M Maintained
Operating cash flowFY 2025$275–$325M $275–$325M Maintained
CapexFY 2025$100M $100M Maintained
Capital allocationFY 2025Minimal acquisitions/share repurchases Minimal until after aerospace sale; may adjust priorities later Clarified path post-divestiture
Dividends2025Quarterly dividend at $0.05/share Maintained; Q2 declared $0.05/share Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
Restructuring benefitsSequential adjusted EBIT margin improved; plan expanded to $50–$60M annualized; year-end cash proceeds targeted ~$14M incremental EBIT benefit realized; estimates unchanged ($60–$70M annualized); continued sales attrition pacing; real estate sales progressing Executing to plan; benefits building through 2025
Aerospace divestitureExploring potential sale Signed agreement to sell to Tinicum; expected ~$240M after-tax proceeds; held-for-sale accounting; Q1 aerospace sales $53M, EBIT $7M Accelerating portfolio focus; close targeted in 2025
Tariffs & metal marginsMetal margin compression cited; pricing differentials impacted 2024 Tariffs a net positive in aggregate; rod/wire demand strong; April metal margins improved; adjustable beds disadvantaged vs imports Tailwinds in steel; mixed effects across products
Bedding market demandPersistent weakness into Q4’24; imports gaining share Domestic mattress production down low double digits; consumption down high single to low double digits; volume outlook lowered to low double digits in bedding Continued softness; cautious customer ordering
AutomotiveHeadwinds in 2H’24; EV transition, Europe softness Expect disruption risk from global auto part tariffs; USMCA compliance limits direct impact; indirect impacts possible; sales above expectations Mixed; watch tariff implementation
Deleveraging & capital allocationDebt reduction; dividend cut to $0.05 Potential to eliminate commercial paper by year-end; revisit buybacks sub-2.5x leverage post-aerospace Improved leverage path; optionality ahead

Management Commentary

  • “We are pleased to report better-than-anticipated first quarter earnings. Our earnings improvement is a testament to the excellent execution of our restructuring plan and operational efficiency improvement initiatives, as well as disciplined cost management.” — Karl Glassman, CEO .
  • “We now expect lower volume in our domestic bedding business due to softer U.S. mattress production, offset primarily by increased U.S. rod and wire pricing due to steel-related tariff benefits.” — Benjamin Burns, CFO .
  • “Tariffs present positive and negative impacts across our businesses, but in aggregate, are likely a net positive for us… steel tariffs have the potential to benefit domestic innerspring producers.” — Karl Glassman, CEO .

Q&A Highlights

  • Restructuring ramp: ~$14M EBIT benefit realized in Q1; tracking toward 55–60% of 2025 target run-rate, with additional layering into 2026; real estate sales under contract in Q2 support cash generation .
  • Segment margin guide: Bedding up ~150 bps; Specialized up ~50 bps; FF&T down ~50 bps for 2025, reflecting mix and pricing dynamics .
  • Capital allocation and leverage: Potential to be out of commercial paper by year-end with ~$400–$450M debt reduction from cash/real estate/Aerospace proceeds; leverage targeted toward 2x; buybacks considered below ~2.5x post-deleveraging .
  • Bedding dynamics: Underperformance versus U.S. consumption tied to restructuring attrition (~3% impact), import share gains, and lumpy noncontract orders; January was notably soft; stability observed in Feb–Apr .
  • Tariffs and metal margins: April metal margins improved YoY; rod/wire mills sold out with overflow to commercial construction; adjustable bases face tariff disadvantage versus importers .

Estimates Context

  • Q1 2025 results modestly beat consensus: adjusted EPS $0.24 vs $0.2175*; revenue $1,022.1M vs $1,019.8M*. The beat was driven by restructuring/efficiency benefits and disciplined costs, partially offset by volume and metal margin compression . Values retrieved from S&P Global.*
  • With management lowering volume assumptions (especially bedding) but maintaining adjusted EPS guidance via tariff benefits and efficiency gains, Street estimates may need to reweight segment mix (higher rod/wire profitability, lower bedding volumes) and incorporate tariff pathways more explicitly into margin models .

Key Takeaways for Investors

  • Slight beat with margin expansion: Q1 adjusted EBIT margin up 70 bps YoY to 6.5%; execution on restructuring is translating into better profitability despite soft volumes .
  • Guidance unchanged but tougher volume assumptions: Bedding midpoint lowered to low double-digit decline; offsets expected from steel-related tariffs and improved rod/wire margins, supporting adjusted EPS range .
  • Portfolio simplification catalyst: Aerospace sale (held-for-sale; expected ~$240M after-tax proceeds) enhances deleveraging capacity and raises potential for future buybacks once leverage approaches ~2–2.5x .
  • Tariff dynamics are a net positive overall: Expanded metal margins and rod/wire demand; monitor adjustable bed disadvantages vs imports and potential consumer demand impacts .
  • Bedding remains the swing factor: Continued demand weakness and import competition; resilience hinges on tariff enforcement and domestic production shifts; rod/wire provides partial offsets .
  • Cash and liquidity stable: $817M liquidity; OCF guided to $275–$325M for 2025; dividend maintained at $0.05/quarter, signaling deleveraging priority over near-term yield expansion .
  • Near-term trading catalysts: Tariff implementation/reciprocity signals, aerospace close timing, metal margin trajectory, bedding demand normalization, and confirmation of deleveraging milestones (commercial paper reductions) .


## Appendix: Additional Detail

### First Quarter Narrative Drivers
- Sales drivers: Volume down 5%; raw-material pricing -1%; FX -1%; partially offset by higher rod/wire sales and growth in Textiles/Aerospace **[58492_20250428CG74298:0]**.
- Adjustments: $6.9M restructuring, $3.2M gain on real estate; adjusted EPS $0.24 vs GAAP $0.22 **[58492_20250428CG74298:1]** **[58492_20250428CG74298:10]**.
- Segment detail: Bedding EBIT down $6M (adjusted -$4M); Specialized adjusted EBIT +$8M; FF&T adjusted EBIT -$1M **[58492_20250428CG74298:2]** **[58492_20250428CG74298:3]** **[58492_20250428CG74298:9]**.
- Liquidity/debt: Total debt $1.936B; commercial paper $440M; net debt/TTM adj EBITDA 3.77x; liquidity $817M **[58492_20250428CG74298:1]** **[58492_20250428CG74298:10]**.

### Prior Quarter Benchmarks
- Q4 2024: Revenue $1.056B; adjusted EPS $0.21; adjusted EBIT margin 5.3%; headwinds included metal margin compression and lower volumes; restructuring benefit present **[58492_20250213CG18947:1]** **[58492_20250213CG18947:8]**.
- Q3 2024: Revenue $1.102B; adjusted EPS $0.32; adjusted EBIT margin 6.9%; guidance lowered on weaker end-market demand; portfolio review initiated for Aerospace **[58492_20241028CG41515:0]** **[58492_20241028CG41515:2]**.