According to Leggett & Platt's Q3 report, the company's 3Q sales amounted to $1.1 billion, a 6% decrease compared to last year. President and CEO Karl Glassman comments, 'We continued to make solid progress on our restructuring and operating efficiency improvement initiatives, although demand headwinds were more challenging than anticipated in the third quarter. Despite weaker than expected results, we paid down $124 million of debt and adjusted EBIT margin improved by 60 basis points sequentially this quarter.'
'We expect weak demand in our residential end markets to persist into the fourth quarter due to a more challenging macro environment and softening in consumer spending. Additionally, our Automotive business continues to face headwinds from varying impacts of the transition to electric vehicles, consumer affordability issues, and economic softness in Europe. As a result, we are reducing our sales and EPS guidance.
We are focused on simplifying our portfolio to businesses that are the right long-term fit. As a part of this strategic review, we are exploring the potential sale of our Aerospace business. Looking forward, we are confident that the actions we are taking to strengthen our balance sheet, improve operating efficiency and margins, and position ourselves for future growth opportunities will create long-term shareholder value.'
Further results showed that organic sales were down 6%; and volume was down 4% (primarily from continued weak demand in residential end markets, the expected loss of a customer in Specialty Foam, and demand headwinds in Automotive and Hydraulic Cylinders). These decreases were partially offset by higher trade sales in Steel Rod and Wire and growth in Aerospace.
Third quarter EBIT was $78 million, down $13 million from third quarter 2023 EBIT, and adjusted EBIT was $76 million, a $10 million decrease from third quarter 2023 adjusted EBIT.
These decreases were partially offset by lower amortization, operational efficiency improvements, and restructuring benefit.
2024 guidance
Full year 2024 sales and EPS guidance have been lowered as demand is weaker than previously anticipated, particularly within the Specialized Products and Furniture, Flooring & Textile Products segments. Sales are expected to be $4.3–$4.4 billion, down 7% to 9% versus 2023 (vs. prior guidance of $4.3–$4.5 billion). Volume is expected to be down mid-single digits (vs. prior guidance of down low to mid-single digits).
More information:
Leggett & Platt
www.leggett.com