Leggett & Platt, Incorporated LEG is scheduled to release fourth-quarter 2024 results on Feb. 13, after market close.

In the last reported quarter, the company’s earnings and trade sales missed the Zacks Consensus Estimate by 3% and 0.4%, respectively. On a year-over-year basis, both metrics declined 11% and 6%, respectively.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Leggett’s earnings topped the consensus mark in two of the trailing four quarters and missed on two occasions, with a negative average of 315.3%.

Trend in LEG’s Estimate Revision

The Zacks Consensus Estimate for Leggett’s fourth-quarter 2024 earnings has remained stable at 21 cents per share in the past 60 days. The estimated figure indicates a 19.2% decline from the year-ago earnings of 26 cents per share.

The consensus mark for revenues is pegged at $1 billion, indicating a 7.3% fall year over year.

Factors to Note Ahead of LEG’s Q4 Earnings Release

Revenues

Leggett’s fourth-quarter trade sales are expected to have declined year over year due to soft demand in residential end markets. A challenging macro environment and soft consumer spending are likely to have impacted demand. Meanwhile, the automotive business is likely to have been impacted by the transition to electric vehicles, affordability concerns and economic softness in Europe.

The company expects demand in these businesses to have remained soft through the fourth quarter due to the above-mentioned headwinds. The impact is expected to have been more significant than previously anticipated. For the to-be-reported quarter, LEG expected trade sales in the range of $973-$1,073 million.

Despite recent interest rate cuts by the Federal Reserve, the rise in mortgage rates is likely to have added pressure to consumer spending and slowed demand for home furnishings. The company expects a delay between improvements in housing trends and a rebound in mattress demand. It expects the domestic mattress market to have remained under pressure in the fourth quarter.

Segment-wise, our model anticipates Bedding Products’ trade sales (accounting for 40.4% of third-quarter 2024 total net sales) to have declined 10.6% year over year to $400.8 million. We expect the Furniture, Flooring & Textile Products’ (comprising 32.3% of total net sales) net sales to have fallen 6.2% to $326.4 million. For Specialized Products (comprising 27.2% of total net sales), we expect net sales to have decreased 4.2% to $305 million.

However, the company’s focus on driving long-term growth, expanding product lines and extending geographic footprint are commendable and are likely to have aided its fourth-quarter 2024 performance.

Margins

The bottom line of Leggett is likely to have been affected by higher costs and lower volume. The company expects adjusted EPS to have been in the range of 16 -26 cents. Raw material-related price decreases and currency impact are likely to have added to the woes.

Our model expects adjusted EBITDA and adjusted EBITDA margin to have declined year over year in the fourth quarter of 2024 by 15.5% to $93.8 million and 80 bps to 9.1%, respectively.

Nonetheless, its restructuring efforts and focus on operating efficiency improvements are expected to have helped control costs.

What Does Our Quantitative Model Predict for LEG?

Our proven model does not conclusively predict an earnings beat for Leggett this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you will see below.

Earnings ESP of LEG: It has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

LEG’s Zacks Rank: Leggett currently carries a Zacks Rank #2.

Stocks With the Favorable Combination

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.

Life Time Group Holdings, Inc. LTH has an Earnings ESP of +14.29% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LTH is expected to register a 10.5% increase in earnings for the to-be-reported quarter. It reported earnings beats in three of the trailing four quarters and missed on one occasion, with an average surprise of 46.2%.

Carnival Corporation & plc CCL currently has an Earnings ESP of +28.1% and a Zacks Rank of 3.

CCL reported earnings beats in each of the trailing four quarters, with an average surprise of 326.4%. Its earnings for the to-be-reported quarter are expected to increase 114.3%.

Rush Street Interactive, Inc. RSI currently has an Earnings ESP of +22.22% and a Zacks Rank of 1.

RSI’s earnings for the to-be-reported quarter are expected to increase 800%. It reported earnings beats in each of the trailing four quarters, the average surprise being 225%.

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