Diversified manufacturer Leggett & Platt has reported a decline in third quarter sales with its bedding division experiencing a softness in demand.
According to its Q3 trading update, total sales were down 2% to $1.29bn against the same period last year. Volume was down 8%, primarily from demand softness in residential end markets.
The company saw its Bedding division sales fall 12%, with volumes decreasing 20%, as continued demand softness in US and European bedding markets impacted performance.
Within its Furniture, Flooring & Textile Products segment, sales were flat, while volume was down 6% with declines in Home Furniture, Fabric Converting, and Flooring partially offset by growth in Geo Components and Work Furniture.
Third quarter EBIT was $113 million, down $31 million from third quarter 2021. EBIT decreased primarily from lower volume, lower overhead absorption from reduced production, and operational inefficiencies in Specialty Foam, partially offset by metal margin expansion.
President and CEO Mitch Dolloff commented: “The current global economic environment and its effect on the consumer negatively impacted our third quarter results. As anticipated, we continue to experience demand and margin recovery in our Specialized Products segment. The U.S. bedding market remains fairly stable but at relatively weak levels, and we began to see slowing in other markets such as European bedding, home furniture, work furniture, and steel. As a result of these lower demand levels and the increasingly challenging macroeconomic environment, we lowered our full year guidance on October 10th.
“Third quarter earnings per share were slightly better than expected primarily due to incentive compensation adjustments. At the midpoint of guidance, fourth quarter is now expected to be slightly lower than third quarter primarily due to further reductions in steel rod production in response to the slowing steel market.
“We continue to focus on things we can control and are taking action to mitigate the impact of these challenges by aligning costs, production levels, and inventory with demand; evaluating near-term opportunities with our customers and working with them on new product developments; and continuing to build out our existing businesses through acquisitions. Our strong balance sheet and cash flow give us confidence in our ability to navigate challenging markets while investing in long-term opportunities.”