Leggett & Platt (NYSE:LEG) executives said the company made “significant progress” in 2025 against priorities it outlined early last year, pointing to a largely completed restructuring plan, balance sheet improvement, and portfolio simplification steps that management believes have positioned the business to benefit when residential end markets recover.
Management highlights restructuring, deleveraging, and portfolio actions
CEO Karl G. Glassman said Leggett & Platt has “substantially completed” the restructuring plan launched in early 2024, and that actions taken over the past two years delivered “greater EBIT benefit at lower costs than originally expected.” He said the improvements are sustainable and should support better profitability and cash flow, enabling reinvestment and shareholder returns.
By year-end, net debt to adjusted EBITDA declined to 2.4x from 3.8x, moving closer to the company’s long-term leverage target of 2x. Glassman said the near-term goal remains getting closer to that target, and he suggested the company believes it can reach it conservatively by the end of calendar 2026, while noting the first quarter is typically a use of cash due to seasonal working capital needs.
Fourth-quarter results: sales down, adjusted EPS slightly higher
Burns said fourth-quarter 2025 sales were $939 million, down 11% from the fourth quarter of 2024. He attributed the decline to “sales weakness at a certain customer” and retailer merchandising changes in Adjustable Bed and Specialty Foam, continued soft demand in residential end markets, customer supply chain disruptions in Automotive, and lower demand in Hydraulic Cylinders. Growth in Textiles and Work Furniture, along with higher trade wire and rod sales, partially offset the declines.
By segment in the quarter:
- Bedding Products sales decreased 11% year over year.
- Specialized Products sales declined 21%, “mostly due to the Aerospace divestiture.”
- Furniture, Flooring, and Textile Products sales were down 3%.
Fourth-quarter EBIT was $32 million and adjusted EBIT was $48 million, down $8 million versus the prior-year quarter. Burns said the decline was primarily due to lower volume and the absence of earnings from the divested Aerospace business, partially offset by metal margin expansion and restructuring benefits.
Fourth-quarter earnings per share were $0.18, while adjusted EPS was $0.22, up 5% from $0.21 in the fourth quarter of 2024.
Full-year 2025: sales declined; operating cash flow increased
For the full year, Burns said 2025 sales fell 7% to $4.05 billion, driven by weak residential markets, customer and retailer changes affecting Adjustable Bed and Specialty Foam, divestitures, lower demand in Automotive and Hydraulic Cylinders, and restructuring-related sales attrition. Offsetting factors included growth in Textiles and Work Furniture, higher trade wire and rod sales, raw material-related selling price increases, and currency benefits.
Burns said EBIT increased $786 million primarily due to the nonrecurrence of $676 million in goodwill impairment charges recorded in 2024. Adjusted EBIT decreased $4 million to $263 million, driven primarily by lower volume, partially offset by restructuring benefits and metal margin expansion. Full-year EPS was $1.69 and adjusted EPS was $1.05, flat versus 2024.
Operating cash flow was $338 million, up $33 million year over year, which Burns attributed primarily to working capital benefits. Adjusted working capital ended the year at 11.6% of annualized sales, down 140 basis points from 2024. Burns said the company is not anticipating a working capital benefit in 2026 and expects “maybe a slight use of cash,” while continuing to focus tightly on working capital management.
Restructuring benefits exceed initial expectations
Burns said the restructuring plan has “significantly exceeded” the company’s original expectations. He outlined a full run rate of approximately $70 million of EBIT benefit and total cost of $80 million, about half of which were non-cash. In response to analyst questions, Burns said $63 million of benefits flowed through in 2025, with roughly another $5 million expected in 2026, bringing the plan to the $70 million run-rate level.
He said the benefits had “a very big impact” in Bedding, with additional benefits in Specialized Products (including Hydraulic Cylinders) and in Furniture, Flooring, and Textile Products, primarily in Home Furniture and Flooring. Burns also noted about $2 million of cost remains in the formal restructuring plan.
Burns said the company expects cash proceeds from real estate sales of $70 million to $80 million; $48 million had already been realized, with the remaining balance expected in 2026.
2026 outlook: sales expected down modestly; adjusted EPS targeted at $1.00 to $1.20
Burns guided to 2026 sales of $3.8 billion to $4.0 billion, down 1% to 6% versus 2025. Divestitures completed in 2025 are expected to reduce 2026 sales by 3%. Volume is expected to be flat to down low single digits, while inflation and currency combined are expected to increase sales low single digits.
For earnings, Burns guided to 2026 EPS of $0.92 to $1.38, including:
- $0.02 to $0.11 per share of restructuring costs tied to potential cost improvement and footprint optimization opportunities under evaluation,
- $0.05 to $0.08 per share of costs associated with an unsolicited offer from Somni Group, and
- $0.11 to $0.25 per share gain from sales of real estate.
Adjusted EPS is expected to be $1.00 to $1.20. Burns said the midpoint reflects operational efficiency improvements, disciplined cost management, favorable product mix, and a full-year benefit from metal margin expansion that began in the second quarter of 2025, partially offset by lower volume. The company expects normal seasonality, with lower sales and earnings in the first and fourth quarters. Adjusted EBIT margin is expected to be 6.3% to 7.0%.
Segment expectations discussed on the call included:
- Bedding Products: net trade sales and volume down low single digits; margins up about 150 basis points.
- Specialized Products (excluding Aerospace): organic sales and volume down low single digits; margins down about 150 basis points.
- Furniture, Flooring, and Textile Products: net trade sales and volumes flat; margins flat.
Management said residential markets—about half of company revenue—remain in a “multi-year depression.” Glassman emphasized the company did not build a macro recovery into its 2026 forecast, describing any such improvement as potential upside. In Bedding, executives said the U.S. mattress market was down low single digits in 2025, with domestic production down high single digits, improving in the second half. For 2026, the company expects Bedding segment demand to be down low single digits due to Adjustable Bed and Specialty Foam declines as it laps customer program changes from 2025, while U.S. Spring is anticipated to track a mattress market and domestic production outlook that management expects to be flat to up low single digits.
In Automotive, Sam Smith said customer supply chain disruptions affected results in the quarter, citing issues including a semiconductor supplier dispute affecting customers, an aluminum manufacturer fire in North America, a cyberattack that shut down an OEM’s European factories for several weeks, and an OEM inventory-related shutdown. Smith said those issues are “really behind us now.”
Executives also discussed margin pressures in Furniture, Flooring, and Textile Products during the fourth quarter, including pricing adjustments in Flooring and Textiles, currency impacts that were positive to the top line but negative to the bottom line, lower volume in Home Furniture and Flooring, and costs associated with ramping a new Vietnam Home Furniture facility. Smith said the Vietnam operation began late in the third quarter and ramped through the fourth; the team has shipped product to U.S. customers and is now focused on productivity improvements and increased shipments to Southeast Asian customers.
Glassman concluded by acknowledging ongoing discussions with Somni Group. He said the companies entered into a customary non-disclosure agreement and a six-month standstill, and that Leggett & Platt did not intend to provide further public comments or answer questions about the discussions during the call.
About Leggett & Platt (NYSE:LEG)
Leggett & Platt, Inc is a diversified manufacturer specializing in the design, engineering and production of a wide range of engineered components and products. The company’s offerings span several end markets, including residential bedding, commercial and residential furniture, automotive seating and interiors, aerospace applications and industrial products. By integrating product design with proprietary manufacturing processes, Leggett & Platt serves as a key supplier to both original equipment manufacturers and aftermarket distributors.
The company’s core product lines include coil springs and support systems for mattresses and furniture, adjustable bed mechanisms, engineered components such as extruded and formed metal products, and specialty foam and bedding products.
