Diversified furniture components manufacturer Leggett & Platt has reported a decline in second quarter sales.
According to its latest trading update, Q2 sales fell 8% to $1.22bn, with organic sales down 11%. Volume was down 6%, primarily from demand softness in residential end markets, partially offset by growth in its Automotive, Aerospace, and Hydraulic Cylinders businesses.
Raw material-related selling price decreases reduced sales by 5%, while acquisitions increased sales by 3%.
Second quarter EBIT was $96m, down $47m or 33% from second quarter 2022 EBIT, and adjusted EBIT was $92m, a $51m decrease.
Within its business segments, Bedding Products sales fell 18% with volumes decreasing 9%, primarily due to demand softness in bedding markets and lower trade demand in its Steel Rod and Drawn Wire businesses partially offset by growth in Specialty Foam. EBIT decreased $46m, primarily from lower volume and lower metal margin.
Furniture, Flooring & Textile Product sales fell 14%, with volumes down by also 14%. EBIT decreased $12m, primarily from lower volume partially offset by a $3 million gain from net insurance proceeds from tornado damage at a Home Furniture manufacturing facility.
Due to the results, the group has lowered its full year guidance, with sales expected to be $4.75–$4.95bn, -4% to -8% versus 2022.
President and CEO Mitch Dolloff commented: “Second quarter earnings were in line with expectations on lower than anticipated sales. We saw sustained strength in the Specialized Products segment results although weak consumer demand continued to affect results in the Bedding Products and Furniture, Flooring & Textile Products segments.
“We are lowering our full year guidance to reflect continued volatility in the macroeconomic environment and low visibility in several of our end markets. Our previous guidance anticipated a modest improvement in residential end markets in the second half of the year. We are encouraged by the continued recovery in our industrial businesses but have yet to see an upward trajectory in residential end markets.
“We are maintaining our emphasis on improving areas within our control and proactively addressing the effects of the macroeconomic impacts on our business. Our employees are doing an excellent job engaging with our customers on new product opportunities and driving operational efficiency and strong cash management. Our focused execution and enduring fundamentals position Leggett for long-term success.”