Leggett & Platt’s second quarter results met Wall Street’s expectations for both revenue and adjusted earnings, but the market responded negatively to ongoing sales declines and persistent demand challenges. Management attributed the 6.3% year-over-year revenue decrease to soft demand in key residential end markets, as well as the impact of ongoing restructuring initiatives. CEO Karl Glassman noted, “Our team has done a terrific job driving these results through the execution of our restructuring plan and disciplined cost management,” but acknowledged continued headwinds from tariffs and weak consumer demand, especially in the Bedding and Furniture segments.
Is now the time to buy LEG? Find out in our full research report (it’s free).
Leggett & Platt (LEG) Q2 CY2025 Highlights:
- Revenue: $1.06 billion vs analyst estimates of $1.06 billion (6.3% year-on-year decline, in line)
- Adjusted EPS: $0.30 vs analyst estimates of $0.31 (in line)
- Adjusted EBITDA: $105.3 million vs analyst estimates of $104.2 million (10% margin, 1.1% 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: 8.5%, up from -54.4% in the same quarter last year
- Market Capitalization: $1.21 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 From Leggett & Platt’s Q2 Earnings Call
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Robert Kenneth Griffin (Raymond James) asked for clarity on Bedding segment volume trends and share dynamics. CEO Karl Glassman and Bedding President Tyson Hagale explained that while U.S. spring volumes declined, the impact was driven mainly by restructuring-related attrition, not market share loss.
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Griffin (Raymond James) inquired about the sustainability and drivers of metal margin expansion. Glassman stated that metal margins are benefiting from tariffs and are expected to remain favorable as long as current trade policies continue.
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Griffin (Raymond James) questioned why some facilities previously slated for closure were retained. Glassman and Hagale explained that evolving customer needs and shifting market risks prompted the decision to keep certain operations open.
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Charles Perron-Piché (Goldman Sachs) asked about consumer health and demand expectations. Glassman described sequential improvement in consumer sentiment but cautioned that inflation and tariffs could still pose risks to demand.
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Peter Jacob Keith (Piper Sandler) sought insight on tariff enforcement and its impact on mattress imports. Glassman expressed optimism that stricter enforcement and new duties could level the playing field for domestic manufacturers, while also referencing flammability regulations as a factor affecting imports.
Catalysts in Upcoming Quarters
Looking forward, our analyst team will be monitoring (1) the pace at which restructuring cost savings translate into sustained margin improvement, (2) the evolution of tariff enforcement and its impact on supply chains and domestic demand, and (3) stabilization or recovery in residential end markets such as Bedding and Home Furniture. Additional focus will be placed on progress with portfolio optimization and the redeployment of capital from divestitures.
Leggett & Platt currently trades at $8.97, down from $9.53 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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