Diversified furniture components manufacturer Leggett & Platt has reported a decline in fourth quarter sales but a small increase in full year revenues.
According to its latest trading update, Q4 2022 sales were $1.2bn, a 10% decrease on 2021. Organic sales were down 12%, primarily from continued demand softness in residential end markets.
As for the full year, overall sales increased 1% to $5.15bn against the previous year. Organic sales were flat, while volume was down 7%. EBIT was $485m, down $111m or 19% from 2021. Looking ahead, the company expects sales to be $4.8–$5.2bn, -7% to +1%, during 2023.
Within its business segments, Bedding Products saw trade sales decrease 4% and volumes down by 16%. This was due to demand softness in U.S. and European bedding markets, which was partially offset by trade sales growth in its Steel Rod and Drawn Wire businesses. The Kayfoam acquisition, net of divestitures of small operations in Drawn Wire and International Bedding, added 1%.
EBIT decreased $102m, primarily from lower volume, lower overhead absorption as production and inventories were adjusted to meet reduced demand, operating inefficiencies in Specialty Foam, and the non-recurrence of prior year gain from sale of real estate associated with exited Fashion Bed business ($28m). These decreases were partially offset by higher metal margin.
As for the Furniture, Flooring & Textile Products division, trade sales increased 3%, while volumes decreased 6% due to declines in Home Furniture, Flooring, and Fabric Converting, which was partially offset by growth in Work Furniture. Raw material-related selling price increases added 10%.
President and CEO Mitch Dolloff commented: “Leggett & Platt’s diverse portfolio of businesses, strong cash discipline, and the ingenuity and agility of our employees helped deliver solid results in 2022 despite weak demand in residential end markets. As we moved through the year, the dynamic macroeconomic and geopolitical environment pressured our markets and affected our results. We anticipate 2023 to be a challenging year driven by continued economic uncertainty.
“We are focused on improving the things that we can control and continuing to mitigate the impacts of market challenges on our business. We are working with our customers on new product opportunities, continuing our focus on improving operating efficiency, and driving strong cash management. Our financial strength gives us confidence in our ability to successfully navigate challenging markets while investing in long-term opportunities.
“Finally, I would like to thank our dedicated employees for continually making Leggett & Platt a better company. Your collaboration, dedication, and commitment to our values helped us navigate the many recent challenges and obstacles and will help us to capitalize on opportunities in the future.”