Diversified furniture components manufacturer Leggett & Platt has reported a decline in first quarter sales and profit.
According to its latest trading update, Q1 2024 sales were $1.1bn, a 10% decrease versus first quarter last year, with volumes also down 6%, primarily from continued weak demand in residential end markets.
First quarter EBIT was $63m, down $26m or 29% from first quarter 2023 EBIT. This reduction was due lower volume, increased bad debt reserve, less benefit from a reduction to a contingent purchase price liability associated with a prior year acquisition, and the non-recurrence of pandemic-related cost reimbursements.
The group added that its restructuring plan in its Bedding Products segment and in its Furniture, Flooring & Textile Products segment is “progressing as planned”, with an annualised EBIT benefit of $40–$50m expected to be realised after initiatives are fully implemented in late 2025.
In the quarter, its Bedding Products division saw sales fall 15% due to demand softness in the US and European bedding markets. Meanwhile, its Furniture, Flooring & Textile Products segment experienced a decline of 9%, mainly due to continued weakness in residential end market demand.
The company said that its full year guidance remains unchanged, with sales expected to be $4.35–$4.65bn, -2% to -8% versus 2023.
President and CEO Mitch Dolloff commented: “First quarter results were in line with our expectations and our full year sales and EPS guidance range remain unchanged. We are making steady progress on the restructuring plan announced in January to optimize our manufacturing and distribution footprint and remain on track to achieve our objectives within our stated timeline.
“We are taking proactive steps to ensure the long-term success of our business and deliver sustainable returns for our shareholders. Our near- to mid-term strategic priorities include strengthening our balance sheet and liquidity, improving margins by optimizing operations and our general and administrative cost structure, and positioning the company for profitable growth opportunities.
“Consistent with these priorities, we are reducing the dividend to free up capital to accelerate the deleveraging of our balance sheet and solidify our long-held financial strength. Over the longer term, we expect to grow our business both organically and through strategic acquisitions, while also returning cash to shareholders via a combination of dividends and share buybacks. We are confident that the actions we are taking will better position us for the future and enhance shareholder value.”
