Shares of Leggett & Platt (LEG 0.17%) were down 12.1% on Friday after the diversified manufacturer announced mixed quarterly results relative to Wall Street's expectations.
Leggett & Platt continues to battle with weak demand
Leggett & Platt's fourth-quarter revenue fell 7% year over year, to just under $1.12 billion, while adjusted (non-GAAP) net income fell by a third to $0.26 per share. Analysts, on average, were looking for slightly higher earnings of $0.27 per share on roughly the same revenue.
CEO Mitch Dolloff called it "another challenging year for residential end markets," citing weak demand for the company's bedding products and furniture, flooring and textile products segments. That weakness was only partially offset by continued improvements from Leggett & Platt's specialized products segment, which has benefited from a rebound in industrial end markets.
What's next for Leggett & Platt shareholders?
Last month Leggett & Platt announced a restructuring of its bedding products segment (and to a lesser extent its furniture, flooring and textile products segment), which will result in $20 million to $25 million of restructuring-related expenses in the first half of 2024. Over the longer term, the move should reposition the company for improved profitability by focusing on key product growth.
Still, the company expects residential end-market demand to remain soft throughout the year.
Leggett & Platt issued full-year 2024 guidance accordingly, calling for sales to decline 2% to 8% year over year to a range of $4.35 billion to $4.65 billion. On the bottom line, that should translate to adjusted earnings per share in the range of $1.05 to $1.35. Both ranges are below consensus estimates, which predicted 2024 earnings of $1.36 per share on revenue of $4.68 billion.
In the end, this was a straightforward quarterly miss punctuated by underwhelming forward guidance. And it's no surprise to see Leggett & Platt stock falling hard in response.
