Diversified furniture components manufacturer Leggett & Platt has reported a decline in second quarter sales.
According to its latest trading update, Q2 2024 sales were $1.1bn, an 8% decrease versus the second quarter last year, with volumes also down 4%, primarily from continued weak demand in residential end markets and the earlier than expected loss of a customer in Specialty Foam.
Second quarter EBIT was a loss of $614 million, down $710 million from second quarter 2023 EBIT. EBIT decreased primarily from a $675 million non-cash goodwill impairment charge.
In the quarter, its Bedding Products division saw sales fall 13% with volumes down 7%, primarily due to the earlier than anticipated loss of a customer in its Specialty Foam business and demand softness in US and European bedding markets.
Furniture, Flooring & Textile Products sales were down 6%, with volumes also down 3%, primarily from declines in Geo Components and continued weak demand in residential end markets.
The group said that the restructuring plan in its Bedding Products segment and in its Furniture, Flooring & Textile Products segment is “progressing as planned”, adding that it has also initiated a “small restructuring opportunity” in its Specialized Products segment during the period.
Looking ahead, sales are expected to be $4.3–$4.5 billion, down 5% to 9% versus 2023 (vs prior guidance of $4.35–$4.65 billion). Volume is expected to be down low to mid-single digits.
President and CEO Karl Glassman commented: “While our second quarter results reflect the ongoing challenging macro environment, I am immensely proud of our team’s execution. The restructuring plan is on track, with some elements of the plan progressing ahead of schedule and exceeding expectations. We paid down $73 million of debt and adjusted EBIT margin improved by 50 basis points sequentially this quarter. We remain committed to investing in our key businesses to drive profitable growth when market conditions improve.
“Demand in our residential end markets remains weak as consumers continue to delay big-ticket, discretionary purchases. Additionally, the global automotive market remains volatile due to a slower than expected shift to electric vehicles and disruption from new Chinese market entrants. Due to these factors and continued deflationary pressure, we are lowering our full year sales guidance. We are also narrowing our adjusted EPS guidance, with a slightly lower mid-point. This revision reflects the impacts of lower volume, increased inventory write-downs/reserves, and higher bad debt reserves, partially offset by continued strong execution of our restructuring plan, operational efficiency improvements, and pricing discipline.
“We are currently conducting a strategic review of our diverse portfolio, assessing how each business fits into our long-term vision. This review, in addition to our restructuring plan and operational improvement initiatives, is leading to a clearer vision of the opportunities ahead. We fully expect the future Leggett & Platt to be more focused and more profitable.”
