Leggett & Platt, Incorporated LEG reported fourth-quarter 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, both metrics declined.

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The quarterly results indicated a weak demand in the company’s residential end markets due to a challenging macro environment and soft consumer spending. Softening in Automotive and Hydraulic Cylinders further impacted the company’s performance. Although LEG carried out its restructuring and operating efficiency improvement initiatives, the headwinds mentioned above overshadowed the prospects to a great extent.

Leggett believes that the weakness in demand will continue in 2025 due to economic uncertainty. The company remains focused on strengthening its balance sheet, improving operational efficiency and enhancing margins. Ongoing efforts aim to support long-term growth and profitability.

Leggett's Q4 in Details

Leggett reported adjusted earnings of 21 cents per share, which met the consensus estimate but decreased 19.2% from 26 cents reported a year ago.

Net trade sales of $1.056 billion surpassed the consensus mark of $1.034 billion by 2.2%, but declined 5% from the prior-year quarter’s $1.115 billion (all organic). Volume declined 4% due to continued demand softness in residential end markets, the expected loss of a customer in Specialty Foam and demand headwinds in Automotive and Hydraulic Cylinders. Raw material-related selling prices and currency impact lowered sales by 1%.

Adjusted EBIT declined 16% to $55.6 million from the prior-year quarter’s level of $66.1 million. The decline was due to metal margin compression and lower volume. This was partially offset by lower amortization, operational efficiency improvements and restructuring benefits.

Adjusted EBIT margin contracted 60 basis points (bps) to 5.3% from the year-ago quarter’s figure of 5.9%. Adjusted EBITDA margin also contracted 140 bps from the year-ago quarter to 8.5%.

Leggett’s Segmental Details

Bedding Products' net trade sales decreased 6% from the year-ago quarter’s level to $420.2 million. Our model predicted trade sales for the segment to decline 10.6%. A volume decline of 3% was caused by the demand softness in U.S. and Europe’s bedding markets expected loss of a customer in Specialty Foam and restructuring-related sales attrition, partially offset by higher trade rod and wire sales. Raw material-related selling price, net of currency benefit, reduced sales by 3%.

Adjusted EBIT margin contracted 40 bps to 2%. Adjusted EBITDA margin also contracted 270 bps year over year to 5.6%.

The Specialized Products segment's trade sales decreased 5% from the prior-year quarter’s figure to $303.7 million. Our model predicted trade sales for the Specialized Products segment to decline 4.2%. Volume was down 5% due to declines in Automotive and Hydraulic Cylinders, partially offset by growth in Aerospace.

Adjusted EBIT margin remained flat year over year at 10%. EBITDA margin grew 80 bps year over year to 13.8%.

Trade sales in the Furniture, Flooring & Textile Products segment declined 4% from the prior-year quarter’s level to $332.5 million. Our model predicted trade sales for the segment to decrease 6.2%. A volume decline of 2% was caused by continued weak demand in residential end markets, partially offset by growth in Geo Components and Fabric Converting. Raw material-related selling price decreases, net of currency benefit, reduced sales 2%.

Adjusted EBIT margin of 5.1% was down 130 bps from the prior year, mainly due to lower volumes. Adjusted EBITDA margin also declined 130 bps to 6.7%.

LEG’s Financials

As of Dec. 31, 2024, Leggett had $793 million in liquidity. It had cash and equivalents worth $350.2 million at the end of the fourth quarter, down from $365.5 million at 2023-end.

Long-term debt totaled $1.86 billion, up from $1.68 billion recorded at 2023-end. The trailing 12-month net debt-to-adjusted EBITDA was 3.76x compared with 3.16x at the end of 2023.

Cash from operations totaled $305.7 million during 2024, down from $497.2 million in the prior-year period, due to weaker earnings and reduced gains from working capital. Capital expenditures totaled $82 million for the year.

2024 Highlights of LEG

Net revenues for the year totaled $4.384 billion, down 7% organically, from $4.725 billion recorded in the year-ago period. Volume was down 4% due to demand softness in residential end markets, expected loss of a customer in Specialty Foam and demand headwinds in Automotive and Hydraulic Cylinders. Reduced raw material-related selling price and currency impact lowered sales by 3%.

Adjusted EBIT fell 20% from the prior-year level to $266.5 million, owing to lower volume and an unfavorable sales mix, along with raw material-related pricing adjustments, metal margin compression and other expected higher expenses such as bad debt and medical costs.

Adjusted EBIT margin also contracted 100 bps from the year-ago figure to 6.1%.

Adjusted earnings were $1.05 per share compared with $1.39 in 2023. Adjusted EBITDA margin declined 170 bps to 9.2%.

LEG’s 2025 Guidance

Leggett expects sales of $4-$4.3 billion, indicating a 2-9% decline year over year. Volume is expected to be down low to mid-single digits. Raw-material-related price decreases and currency impact are likely to reduce sales by low-single digits.

Volume is likely to be down mid-single digits in both Bedding Products and Specialized Products segments. The same is expected to be down low-single digits in the Furniture, Flooring & Textile Products segment.

Adjusted EPS is anticipated to be between $1 and $1.25. This includes an increase at the midpoint compared with 2024, driven by restructuring benefits and operational efficiency improvements, partially offset by lower volume.

LEG now expects the adjusted EBIT margin to be in the band of 6.4-6.8%.

Capital expenditures, depreciation and amortization costs, and operating cash flow are estimated to be $100 million, $135 million and $275-$325 million, respectively. Net interest expense is expected to be $70 million. The effective tax rate for the year is anticipated to be 25%. Fully diluted shares are predicted to be approximately 139 million.

LEG’s Zacks Rank & Recent Consumer Discretionary Releases

Leggett currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The company’s performance during the quarter was driven by stronger pricing on close-in demand and continued strength in onboard revenues. RCL’s diversified fleet offerings, accompanied by its commercial and vacation experiences, are witnessing robust demand trends amid an improving global market backdrop. Thanks to these tailwinds, RCL could achieve its Trifecta goals before the schedule, pointing out the benefits it is realizing from the current improving scenario.

Adtalem Global Education Inc. ATGE posted better-than-expected results in second-quarter fiscal 2025. Earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year, driven by strong enrollment growth and strategic initiatives.

Adtalem's operational excellence strategy, Growth with Purpose, has driven six consecutive quarters of enrollment growth while supporting its mission to develop skilled healthcare professionals. Furthermore, strong demand at Chamberlain University and Walden University drove results. ATGE now expects fiscal 2025 adjusted earnings to be in the band of $6.10-$6.30 per share compared with the earlier prediction of $5.75-$5.95.

Las Vegas Sands Corp. LVS reported fourth-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. Both metrics declined on a year-over-year basis.

The company reported solid financial and operational performance at Marina Bay Sands, Singapore and continued recovery in the Macao market. LVS continues to execute strategic objectives and remains optimistic about achieving industry-leading growth in both Macao and Singapore through its ongoing capital investment initiatives. It is optimistic about the introduction of new suite offerings, enhanced service levels and increased tourism spending in Asia.

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