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The company announced adjusted earnings per share (EPS) of $0.23, which was $0.01 lower than the analyst estimate of $0.24. Revenue for the quarter was also below the consensus, coming in at $1.1 billion compared to the expected $1.11 billion.
The company’s first-quarter results marked a 10% decrease in sales compared to the first quarter of the previous year. This decline was attributed to a 6% drop in volume, primarily due to ongoing weak demand in residential end markets, and a 4% decrease in sales due to raw material-related price reductions.
Adjusted earnings before interest and taxes (EBIT) saw a $25 million decrease, mainly due to lower volume, increased bad debt reserve, and other factors partially offset by lower current year amortization expenses.
In response to the earnings release, Leggett & Platt’s stock experienced a significant drop, indicating a negative market reaction to the soft earnings and revenue miss.
President and CEO Mitch Dolloff stated, “First quarter results were in line with our expectations and our full year sales and EPS guidance range remain unchanged.” He emphasized the company’s commitment to a restructuring plan aimed at optimizing operations and improving margins, as well as reducing the dividend to free up capital.
For the full year 2024, Leggett & Platt’s guidance remains unchanged with sales expected to range between $4.35 billion and $4.65 billion, and adjusted EPS forecasted to be between $1.05 and $1.35.
The midpoint of the EPS guidance range is $1.20, slightly above the analyst consensus of $1.16. However, the midpoint of the revenue guidance range is $4.5 billion, marginally above the consensus estimate of $4.496 billion.
The company’s restructuring plan is anticipated to yield an annualized EBIT benefit of $40–$50 million once fully implemented by late 2025, with approximately $5–$10 million expected to be realized in the second half of 2024. Leggett & Platt also expects to incur $20–$25 million of restructuring and related costs in the first half of 2024.
Despite the current challenges, Dolloff remains optimistic about the company’s strategic priorities and long-term success, stating, “We are confident that the actions we are taking will better position us for the future and enhance shareholder value.”
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