Consumer discretionary businesses are levered to the highs and lows of economic cycles. This sensitive demand profile can cause the industry to underperform when macro uncertainty enters the fray, and over the past six months, its 14.8% return has fallen short of the S&P 500’s 19.5% gain. A cautious approach is imperative when dabbling in these companies as many also lack recurring revenue characteristics and ride short-term fads. Taking that into account, here are three consumer stocks we’re steering cle ...

Core Insights - Leggett & Platt, Incorporated (NYSE:LEG) is a diversified manufacturer with operations in bedding, furniture, flooring, and automotive segments, focusing on innovation and quality to maintain market position [1] Stock Performance - Over the past month, LEG has shown a modest gain of 0.52%, indicating resilience in its stock performance despite a short-term decline of 5.14% in the last 10 days, which may present a buying opportunity for long-term investors [2][6] Growth Potential - The stock price has a growth potential of 21.73%, suggesting that it is currently undervalued and offers room for appreciation, making it attractive for growth-oriented investors [3][6] Financial Health - LEG's financial health is underscored by a perfect Piotroski Score of 9, reflecting robust financial fundamentals and efficient management practices, indicating strong financial stability and operational efficiency [4][6] Investment Attractiveness - With a target price of $10.67, LEG presents a promising upside from its current levels, supported by its growth potential and strong financial metrics, along with recent technical indicators suggesting a potential reversal point [5]

Financial Performance - Trade sales for Q3 2025 were $1,036 million, a decrease of 6% compared to Q3 2024, and $3,117 million for the first nine months of 2025, down from $3,327 million in the same period of 2024[97]. - EBIT for Q3 2025 was $171 million, up $93 million year-over-year, and $324 million for the first nine months, an increase of $798 million compared to the same period in 2024[98]. - EPS for Q3 2025 was $0.91, compared to $0.33 in Q3 2024, and $1.51 for the first nine months, up from $(3.83) in the same period of 2024[99]. - Operating cash flow increased by $33 million to $217 million in the first nine months of 2025 compared to the same period in 2024[100]. - For the nine months ended September 30, 2025, net earnings were $210.3 million, a significant improvement from a net loss of $525.6 million in the same period of 2024[1]. - EBIT increased by $624 million, primarily due to the non-recurrence of a $587 million non-cash goodwill impairment charge and metal margin expansion[2]. - EPS for the first nine months of 2025 improved to $1.51, compared to a loss of $3.83 in the same period of 2024, reflecting higher EBIT[169]. Restructuring and Operational Changes - The company expects to consolidate between 15 and 20 production and distribution facilities as part of its 2024 restructuring plan, primarily in the Bedding Products segment[128]. - The company consolidated 14 production and distribution facilities, including exiting the Mexican innerspring operation and downsizing the Chinese innerspring operation[132]. - Total restructuring and restructuring-related costs for the nine months ended September 30, 2025, were $15 million, comprising $11 million in cash and $4 million in non-cash charges[138]. - The company expects an annualized EBIT benefit of $60–$70 million after restructuring initiatives are fully implemented[134]. - Anticipated annual sales attrition is approximately $60 million after initiatives are fully implemented[135]. Sales and Market Trends - The Bedding Products segment contributed 38% of trade sales in the first nine months of 2025, while Specialized Products and Furniture, Flooring & Textile Products contributed 28% and 34%, respectively[105][106][107]. - Trade sales in the Bedding Products segment decreased by $43 million, or 10%, in Q3 2025, with organic sales down 9% due to customer weakness and restructuring-related attrition[177]. - Specialized Products trade sales decreased by $54 million, or 6%, with organic sales down 4% and volume down 5% due to declines in Automotive and Hydraulic Cylinders[3]. - The domestic mattress industry is expected to experience volatility due to industry bankruptcies, consolidations, and import pressure[142]. - The company is exploring alternative sales channels, including private-label initiatives, to expand market position and profitability[161]. Financial Position and Cash Management - The company had cash and cash equivalents of $461 million as of September 30, 2025, primarily held in international accounts[9]. - The company plans to use cash flow from operations to reduce net debt while considering small strategic acquisitions and share repurchases[10]. - Capital expenditures are expected to be lower at $60-$70 million in 2025, with $38 million spent as of September 30, 2025[217]. - Total debt excluding credit facility/commercial paper was $1,497.2 million as of September 30, 2025, compared to $1,496.1 million at December 31, 2024[223]. - The company had $460.7 million in cash and cash equivalents as of September 30, 2025, up from $350.2 million at December 31, 2024[223]. - The average interest rate on total long-term debt was 3.8% as of September 30, 2025[223]. Strategic Initiatives and Future Outlook - The company is actively evaluating the impact of tariffs and counter-tariffs on its operations, with a focus on mitigating potential negative effects[117]. - The company continues to evaluate further restructuring opportunities beyond the 2024 Plan, which may incur additional costs[140]. - The company plans to set an emissions reduction goal by the end of 2025 or early 2026, with key initiatives including developing emissions reduction pathways and undertaking a Scope 3 emissions inventory[248]. - The company experienced supply shortages in chemicals due to severe weather-related impacts, which constrained overall mattress production in the bedding industry[243]. - Cybersecurity risks have increased due to remote access and sophisticated attacks, potentially affecting the company's operations and financial condition[251]. Environmental and Compliance Considerations - The company's total GHG emissions at the end of 2024 were approximately 21% lower than the baseline year of 2019, primarily due to decreased production levels[247]. - The company’s GHG emissions reduction strategy will evolve, with more specific information expected by the end of 2025 or early 2026[249]. - The company has not experienced material climate-related compliance costs to date but is evaluating opportunities to reduce emissions as part of its sustainability strategy[246].

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are underva ...

Core Insights - Leggett & Platt's stock experienced a significant increase of 14.2% in trading, outperforming the S&P 500 index which gained 0.4% [1] - The company reported its third-quarter results, which, despite missing sales expectations, included forward guidance that has positively influenced investor sentiment [2] Financial Performance - In Q3, Leggett & Platt reported non-GAAP earnings per share (EPS) of $0.29, aligning with Wall Street analyst estimates, while sales reached $1 billion, falling short of expectations by $30 million [4] - Year-over-year sales declined approximately 9%, but the company's guidance indicates a potential moderation in sales declines moving forward [4] Future Outlook - The company has narrowed its full-year revenue outlook, now expecting sales between $4 billion and $4.1 billion, which suggests a sales decline of about 7.5% at the midpoint of the new guidance range [5] - Although the guidance indicates a substantial sales decline, the expectations for a mid-to-high single-digit decline are more favorable than some investors anticipated [6] - Projected EPS is now between $1.52 and $1.72, with adjusted EPS expected to be between $1 and $1.10, an improvement from previous guidance [6]

Financial Data and Key Metrics Changes - Third quarter sales were just over $1 billion, down 6% year-over-year, primarily due to soft demand in residential end markets and sales attrition from the divestiture of the aerospace business [8][11] - Third quarter EBIT was $171 million, and adjusted EBIT was $73 million, a $3 million decrease year-over-year, primarily from lower volume [11] - Third quarter earnings per share were $0.91, with adjusted EPS at $0.29, a $0.03 decrease year-over-year [11] - Operating cash flow for the third quarter was $126 million, an increase of $30 million compared to the third quarter of 2023 [11][12] - Total debt was reduced by $296 million in the third quarter, bringing total debt reduction for the year to $367 million [11][12] Business Line Data and Key Metrics Changes - Bedding product sales decreased 10% year-over-year but improved 3% sequentially [8] - Specialized product sales declined 7%, while furniture, flooring, and textile product sales were flat year-over-year [8] - U.S. mattress industry production improved sequentially but remained negative year-over-year, with total market consumption expected to decline low single digits for the full year [9][10] Market Data and Key Metrics Changes - The U.S. spring unit volume was in line with mattress consumption and domestic production volumes, both estimated to have declined low single digits [8] - Domestic mattress production improved sequentially, marking the second consecutive quarter of improvement, but remained negative year-over-year [9] - The automotive supply chain risks, including availability of aluminum and semiconductors, have begun impacting the industry, although no material impact has been experienced to date [10] Company Strategy and Development Direction - The company is reaffirming the midpoint of its full-year sales and adjusted EPS guidance, with sales expected to be $4.0 billion-$4.1 billion, down 6%-9% versus 2024 [14] - The restructuring plan is nearing completion, with expected annualized EBIT benefits of $60 million-$70 million [13][14] - The company aims to focus on organic growth, funding strategic acquisitions, and returning cash to shareholders through dividends and share repurchases [15][57] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about tariffs potentially driving inflation and impacting consumer confidence and demand [6][7] - The company remains focused on providing high-quality, innovative products while navigating a dynamic operating environment [7][16] - Management highlighted a robust innovation pipeline and partnerships with customers to develop products tailored to market needs [16][17] Other Important Information - The company completed the divestiture of its aerospace business, using proceeds to pay down commercial paper and reduce net debt [4][5] - Total liquidity at the end of the quarter was $974 million, comprised of $461 million in cash and $513 million in revolving credit capacity [13] Q&A Session Summary Question: Benefits from cost actions and restructuring - Management noted that restructuring efforts are meeting or exceeding expectations, with no customer disruptions and a projected annualized EBIT benefit of $60 million-$70 million [22][24] Question: Demand environment in bedding - Management characterized the market as stable, with sequential improvement in sales, but acknowledged ongoing challenges from macroeconomic factors [26][30] Question: Capital expenditure plans for 2026 - Management indicated that normalized CapEx is expected to be around $100 million, with ongoing funding for growth initiatives [32] Question: Segment margins for the year - Bedding segment margins are expected to be up 200 basis points, while specialized segments are projected to increase by 50 basis points [33] Question: Growth opportunities post-restructuring - Management sees significant growth potential in finished bedding and innovation, with a focus on private label products [52][53] Question: Future trajectory of textiles business - Management highlighted the potential for bolt-on acquisitions in textiles, leveraging successful past strategies [76][77]

Financial Data and Key Metrics Changes - Third quarter sales were just over $1 billion, down 6% year over year, primarily due to soft demand in residential end markets and sales attrition from the divestiture of the aerospace business [8][11] - Third quarter EBIT was $171 million, and adjusted EBIT was $73 million, a $3 million decrease year over year [11] - Third quarter earnings per share were $0.91, with adjusted EPS at $0.29, a $0.03 decrease year over year [11] - Operating cash flow for the third quarter was $126 million, an increase of $30 million compared to the third quarter of 2023 [11][12] - Total debt was reduced by $296 million in the third quarter, bringing total debt to $1.5 billion [11][12] Business Line Data and Key Metrics Changes - Bedding product sales decreased 10% year over year but improved 3% sequentially [8] - Specialized product sales declined 7%, while furniture, flooring, and textile product sales were flat year over year [8] - U.S. mattress industry production improved sequentially but remained negative year over year, with total market consumption expected to decline low single digits for the full year [9][10] Market Data and Key Metrics Changes - The domestic mattress production volume declined low single digits year over year, with expectations for a slowdown in the fourth quarter due to seasonality [9][10] - The automotive supply chain faced risks, including availability of aluminum and semiconductors, but no material impact was reported to date [10] - The textiles segment experienced growth in geo components, while home furniture and flooring saw declines [10][72] Company Strategy and Development Direction - The company is focused on optimizing its portfolio, having completed the divestiture of its aerospace business [4][5] - A restructuring plan is nearing completion, with expected annualized EBIT benefits of $60 to $70 million [11][14] - The company aims to strengthen its balance sheet by prioritizing debt reduction and considering small strategic acquisitions [15][57] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about tariffs potentially driving inflation and impacting consumer confidence [6][7] - The company remains focused on providing high-quality, innovative products while navigating a dynamic operating environment [7][16] - Management reaffirmed the midpoint of full-year sales and adjusted EPS guidance, expecting sales of $4.0 to $4.1 billion [14] Other Important Information - The company plans to use excess cash flow primarily for debt reduction, with potential for small strategic acquisitions and share repurchases in the future [15][57] - Capital expenditures are expected to be lower this year at $60 to $70 million, with a return to normalized levels in the future [15][32] Q&A Session Summary Question: Benefits from cost actions and restructuring - Management highlighted successful execution of the restructuring plan, with expected annualized EBIT benefits of $60 to $70 million [22][23] Question: Demand environment in bedding - Management noted stability in demand patterns, with some improvement observed in the third quarter despite macroeconomic challenges [26][30] Question: Future CapEx plans - Management indicated a return to a more normalized CapEx level of around $100 million in the future [32] Question: Segment margins outlook - Bedding segment margins are expected to increase by 200 basis points, while specialized products are projected to rise by 50 basis points [33] Question: Growth opportunities post-restructuring - Management sees significant growth potential in finished bedding and innovation-driven product development [52][53] Question: Future capital allocation and acquisitions - The long-term net debt leverage target is two times, with a focus on reducing debt and considering small strategic acquisitions [57]

Financial Data and Key Metrics Changes - Third quarter sales were just over $1 billion, down 6% year over year, primarily due to soft demand in residential end markets and sales attrition from the divestiture of the aerospace business [9][12] - Third quarter EBIT was $171 million, and adjusted EBIT was $73 million, a $3 million decrease year over year [12] - Third quarter earnings per share were $0.91, with adjusted EPS at $0.29, a $0.03 decrease year over year [12] - Operating cash flow for the third quarter was $126 million, an increase of $30 million compared to the third quarter of 2023 [12] - Total debt was reduced by $296 million in the third quarter, bringing total debt reduction for the year to $367 million [12][13] Business Line Data and Key Metrics Changes - Bedding product sales decreased 10% year over year but improved 3% sequentially compared to the second quarter [9] - Specialized product sales declined 7%, while furniture, flooring, and textile product sales were flat year over year [9] - U.S. mattress industry production improved sequentially but remained negative year over year, with total market consumption expected to decline low single digits for the full year [10][11] Market Data and Key Metrics Changes - The domestic mattress production volume remained negative year over year, with expectations for a slowdown in the fourth quarter due to normal seasonality [10] - The automotive supply chain risks, including availability of aluminum and semiconductors, have begun impacting the industry, although no material impact has been experienced to date [11] Company Strategy and Development Direction - The company is reaffirming the midpoint of its full-year sales and adjusted EPS guidance, with sales expected to be $4.0 to $4.1 billion, down 6% to 9% versus 2024 [14][15] - The restructuring plan is nearing completion, with expected annualized EBIT benefits of $60 to $70 million [13][14] - The company aims to prioritize debt reduction while considering small strategic acquisitions and share repurchases in the future [16][51] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about tariffs potentially driving inflation and impacting consumer confidence and demand [6] - The company remains focused on providing high-quality, innovative products and improving operational execution despite a challenging consumer environment [8][17] - Management noted that the innovation pipeline is robust, with new products gaining traction, positioning the company for long-term profitable growth opportunities [17][48] Other Important Information - The company completed the divestiture of its aerospace business to optimize its portfolio [4][5] - Total liquidity at the end of the quarter was $974 million, comprised of $461 million in cash and $513 million in capacity remaining under the revolving credit facility [13] Q&A Session Summary Question: Benefits from cost actions and restructuring - Management highlighted that the restructuring plan is nearly complete, with no customer disruptions and expected annualized EBIT benefits of $60 to $70 million [22][25] Question: Demand environment in bedding - The bedding market is characterized as more stable, with sequential improvement observed, although challenges remain due to macroeconomic factors [27][30] Question: Capital expenditure plans for 2026 - Management indicated that normalized CapEx is expected to be around $100 million, with ongoing funding for growth initiatives [32] Question: Segment margins for the year - Bedding segment margins are expected to be up 200 basis points, while specialized segment margins should increase by 50 basis points [33] Question: Growth opportunities post-restructuring - Long-term growth opportunities are seen in finished bedding and private label work, with a focus on innovation and product development [46][48]

Third Quarter 2025 Summary Financial Information, Tariff Overview and Restructuring Update October 27, 2025 Forward-Looking Statements Statements in this presentation that are not historical in nature are "forward-looking." These statements are identified by their context or by use of words such as "estimate," "expect," "guidance," "plan," "seek," or the like. These statements include, but are not limited to, guidance; sales, adjusted EPS; operating cash flow; implied adjusted EBIT margin; depreciation and ...

Core Insights - Legget & Platt reported revenue of $1.04 billion for the quarter ended September 2025, a decrease of 5.9% year-over-year, with EPS at $0.29 compared to $0.32 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.02 billion by 1.18%, while the EPS fell short of the consensus estimate of $0.30 by 3.33% [1] Financial Performance - Organic Sales for Bedding Products decreased by 9%, slightly worse than the average estimate of -8.7% [4] - Organic Sales for Specialized Products decreased by 2%, in line with the average estimate of -2.5% [4] - Overall Organic Sales declined by 4%, better than the average estimate of -5.7% [4] Trade Sales - Trade sales for Furniture, Flooring, and Textile Products were reported at $356.4 million, exceeding the average estimate of $347.31 million, with no year-over-year change [4] - Trade sales for Specialized Products were $277.5 million, surpassing the average estimate of $273.04 million, representing a 7.5% decline year-over-year [4] - Trade sales for Bedding Products were $402.5 million, slightly below the average estimate of $406.4 million, reflecting a 9.7% decrease year-over-year [4] EBIT Performance - EBIT for Bedding Products was reported at $36.4 million, significantly higher than the average estimate of $19.21 million [4] - EBIT for Specialized Products reached $112.9 million, compared to the average estimate of $33.04 million [4] - Adjusted EBIT for Specialized Products was $27 million, slightly above the average estimate of $26.6 million, while Adjusted EBIT for Bedding Products was $26.4 million, exceeding the average estimate of $23.25 million [4]