Leggett & Platt’s first quarter results prompted a strong positive market reaction, as management credited the improvement to ongoing restructuring efforts and cost discipline. CEO Karl Glassman emphasized that “earnings improvement is a testament to the excellent execution of our restructuring plan and operational efficiency improvement initiatives, as well as disciplined cost management.” Growth in steel rod and wire sales provided a buffer against persistent weakness in mattress and adjustable base demand, while the company also benefited from modest gains in geo components and aerospace. Management acknowledged that many residential-facing markets remain pressured, but highlighted that restructuring actions are helping offset industry headwinds.
Is now the time to buy LEG? Find out in our full research report (it’s free).
Leggett & Platt (LEG) Q1 CY2025 Highlights:
- Revenue: $1.02 billion vs analyst estimates of $1.02 billion (6.8% year-on-year decline, in line)
- Adjusted EPS: $0.24 vs analyst estimates of $0.22 (10.3% beat)
- Adjusted EBITDA: $98.2 million vs analyst estimates of $93.4 million (9.6% margin, 5.1% beat)
- The company reconfirmed its revenue guidance for the full year of $4.15 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $1.10 at the midpoint
- Operating Margin: 6.2%, in line with the same quarter last year
- Market Capitalization: $1.24 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Leggett & Platt’s Q1 Earnings Call
- Susan Maklari (Goldman Sachs) asked how restructuring benefits will roll through the business and whether upside is possible with future volume recovery. CEO Karl Glassman and CFO Ben Burns pointed to ongoing cost savings and said incremental margins could improve significantly if demand rebounds.
- Maklari (Goldman Sachs) also probed the potential for channel inventory pull-forward due to tariffs. Glassman stated they could not identify any significant pull-forward, but Tyson Hagale, Bedding Products President, noted some imported components and finished mattresses may have arrived ahead of tariffs.
- Maklari (Goldman Sachs) inquired about the profile of the specialized products segment post-aerospace divestiture. Burns declined to provide specific guidance before the sale closes but referenced forthcoming disclosures in the 10-Q.
- Bobby Griffin (Raymond James) focused on deleveraging, asking if proceeds from asset sales and operating cash flow could eliminate commercial paper outstanding. Burns agreed this scenario is possible by year-end if plans proceed as expected.
- Peter Keith (Piper Sandler) questioned the volume guidance reduction in bedding, asking about recent demand trends. Glassman explained that while January was soft, demand stabilized in subsequent months, and the forecast reflects a continuation of current trends.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace and magnitude of restructuring savings as the company completes its plan, (2) evolving tariff and trade dynamics, particularly their impact on competitive positioning and input costs, and (3) stabilization or recovery in residential end-market demand. Progress on the aerospace divestiture and subsequent deleveraging will also be key milestones.
Leggett & Platt currently trades at $9.19, up from $7.26 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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