Leggett & Platt (LEG -15.39%), a diversified manufacturer best known for its bedding components and engineered products, issued its second quarter earnings results on July 31, 2025. The key news is that GAAP revenue reached $1.058 billion, exactly matching analyst estimates (non-GAAP), but fell by 6% compared to Q2 2024. Adjusted earnings per share (EPS) was $0.30, also in line with non-GAAP EPS estimates, while GAAP revenue exceeded expectations and was slightly higher than last year's adjusted EPS of $0.29. The quarter showed ongoing progress in cost management and restructuring, helping offset continued softness in core end markets. However, operating cash flow dropped to $84.0 million, and broader demand trends remained challenged. Overall, it was a mixed quarter with some operational improvements but little indication of a meaningful rebound in underlying demand.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS, Adjusted (Non-GAAP) | $0.30 | $0.30 | $0.29 | 3.4% |
| Revenue | N/A | N/A | $1.13 billion | N/A |
| Adjusted EBIT | $75.6 million | $71.2 million | 6.2% | |
| Adjusted EBIT Margin | 7.1% | 6.3% | 0.8 pp | |
| Operating Cash Flow | $84.0 million | $94.0 million | (10.6%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Snapshot and Strategic Priorities
Leggett & Platt is a multi-industry manufacturer supplying products such as bedding innersprings, wire, steel rod, specialty foams, automotive components, and textiles. Its business stretches across segments including Bedding Products, Specialized Products for auto and aerospace, and Furniture, Flooring & Textile Products.
The company's present focus is on vertical integration—particularly in steel rod and wire production—product innovation, and executing a major restructuring plan launched in 2024. It is also working to manage its global operations in a competitive market. Key factors for success include its ability to control costs through integration, continue developing new products like ComfortCore coils for bedding, and reshape its portfolio to focus on areas with stronger growth prospects.
Quarter in Detail: Revenue, Margins, and Restructuring
The earnings release highlighted declining revenue and volumes across Leggett & Platt's three main segments. Bedding Products, its largest business, saw sales drop by 11% as demand for innersprings and adjustable beds in the U.S. and Europe remained weak. Organic sales across the company were down 6%. The decline reflects subdued consumer activity in residential and automotive end markets, with company-wide volume falling 7% and Bedding Products volume down 12%.
Despite lower sales, the company delivered stronger EBIT and adjusted EBIT margins. Adjusted EBIT rose to $75.6 million, with adjusted EBIT margin improving to 7.1% from 6.3% in Q2 2024. The improvements were largely due to strict cost control and what management called “metal margin expansion”—a result of steel tariffs favoring its in-house steel rod and wire business, as discussed in management commentary. Selling and administrative expenses also declined 10% from the prior year (GAAP). The company realized $13 million in EBIT benefit from restructuring, with a targeted annualized EBIT benefit of $60–$70 million once all initiatives are fully implemented.
The restructuring plan continued at a steady pace, helping eliminate costs and streamline the business. However, one consequence was $11 million in sales “attrition” linked to facility closures and divestitures. Management expects total sales attrition from restructuring to reach $65 million when completed, as updated in guidance, but also forecasts substantial long-term savings. Net debt was reduced, with total debt down by $143 million. The sale of the Aerospace business is on track for completion in 2025, and part of restructuring included $19 million in net real estate sale proceeds.
Product innovation remained a priority, with the company pointing to growth in the textiles segment and new sales in work furniture, as well as the continued rollout of ComfortCore coils in bedding. The bedding segment benefits from differentiated innerspring technologies and in-region production, which allow for some price control and customer loyalty even as demand weakens. However, the company noted that sales advances in these innovative areas are not yet enough to offset the softness in its core residential segment.
Volume declines persisted in all segments. Specialized Products—including lightweight seating for automakers and products for the aerospace industry—saw a 5% drop in sales and a 6% drop in volume. The Furniture, Flooring & Textile Products segment saw sales decline by 2%, with home furniture and flooring down but offset by gains in textiles and commercial work furniture. Segment adjusted EBIT margins varied: Bedding Products margin increased by 3.2 percentage points, Specialized Products margin was up 1.3 percentage points, while Furniture, Flooring & Textiles margin slipped by 2.5 percentage points.
On the capital and liquidity side, the balance sheet showed ongoing deleveraging. Net debt to trailing twelve-month adjusted EBITDA improved to 3.5x, within amended bank covenants. The company amended and extended its primary credit facility, reducing its size and extending the maturity date. Total liquidity was $878 million at June 30, 2025.
The dividend remained unchanged at $0.05 per share per quarter. This follows a significant reduction in 2024, when the dividend was cut from $0.46 to $0.05 per share per quarter as part of the broader restructuring and deleveraging plan. Dividends paid out totaled $6.8 million, largely flat since the reduction.
Looking Ahead: Management’s Outlook and Investor Considerations
Full-year 2025 guidance was maintained despite ongoing demand softness. Leggett & Platt expects sales between $4.0 billion and $4.3 billion, and adjusted EPS between $1.00 and $1.20. Bedding Products volume is now projected to be down in the mid-teens. Restructuring and cost actions are expected to support margins and help meet guidance targets, with anticipated operating cash flow of $275–$325 million and planned capital expenditures between $80 and $90 million.
Investors should monitor demand signals in core bedding and automotive sectors, the ongoing impact of steel and trade tariffs, and continuing progress in restructuring and cost management. There were no major changes to forward guidance or capital allocation beyond debt reduction and sustaining the current dividend level.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
