Furniture components manufacturer delivers record second quarter

Diversified manufacturer Leggett & Platt has reported record quarterly sales in the second quarter with both bedding and furniture divisions experiencing growth.

According to its Q2 trading update, total sales were up 5% to $1.33bn against the same period last year. Volume was down 6%, primarily from demand softness in residential end markets.

The company saw its Bedding division grow sales by 1%, although volume decreased 15%, primarily from demand softness in US and European bedding markets, which was partially offset by strong trade demand in its Steel Rod and Drawn Wire businesses.

Within its Furniture, Flooring & Textile Products segment, sales rose 10%, while volume was down 2% with declines in Home Furniture, Textiles, and Flooring, but was partially offset by growth in Work Furniture.

Second quarter EBIT was $143m, down $29m from second quarter 2021, and down $1m from second quarter adjusted EBIT.

EBIT decreased primarily from the non-recurrence of last year’s $28m gain on the sale of real estate associated with its exited Fashion Bed business.

EBIT decreased versus prior year’s adjusted EBIT primarily from volume declines and lower overhead absorption as production and inventory levels were adjusted to meet reduced demand mostly in Bedding. These decreases were largely offset by metal margin expansion and pricing discipline in the Furniture, Flooring & Textile Products segment.

Commenting on the results, President and CEO Mitch Dolloff said: “We delivered quarterly record sales, solid earnings, and strong cash from operations. These results are attributable to the excellent work of our employees as they continue to effectively navigate a dynamic operating environment and reflects the value of the diversity of our portfolio.    

“We are lowering our full-year guidance to reflect macroeconomic uncertainties including impacts of inflation, tightening monetary policy, and softening consumer demand continuing through the back half of the year. We expect solid demand in our industrial and automotive end markets to partially offset softer consumer markets.

“The strength of our balance sheet supports our capital allocation discipline. We continue to invest in our businesses to capture near- and long-term growth opportunities, both organically and through strategic, bolt-on acquisitions. During the second quarter, we increased our dividend and marked 51 consecutive years of annual dividend increases. We also repurchased $35 million of our stock in the quarter. As we move through the remainder of the year, we will continue to evaluate our capital deployment options while monitoring the current macroeconomic uncertainties.”

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