Group 1 - Leggett & Platt (NYSE: LEG) stock has decreased by 23.5% since the last analysis, despite a strong recovery of over 30% following the release of Q1 earnings [1] Group 2 - The analysis indicates a focus on fundamental valuation, aiming to identify undervalued stocks with growth potential [2]

Core Viewpoint - Leggett & Platt, Incorporated (LEG) reported mixed first-quarter 2025 results, with earnings exceeding expectations while revenues fell short, reflecting ongoing demand softness in key markets [1][2][4]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were 24 cents, surpassing the consensus estimate of 23 cents by 4.3%, and up from 23 cents in the same quarter last year [4]. - Net trade sales totaled $1.022 billion, missing the consensus mark of $1.028 billion by 0.5%, and representing a 7% decline from $1.097 billion in the prior-year quarter [4]. - Adjusted EBIT increased 4.6% to $66.6 million from $63.7 million year-over-year, driven by restructuring benefits and operational efficiency improvements [5]. - Adjusted EBIT margin expanded 70 basis points to 6.5% from 5.8% in the year-ago quarter, while adjusted EBITDA margin grew 80 basis points to 9.6% [5]. Segment Performance - Bedding Products segment saw a 13% decline in net trade sales to $390.7 million, with a volume drop of 10% attributed to demand softness in U.S. and European markets [6]. - Specialized Products segment's trade sales decreased 5% to $300.1 million, with a volume decline of 4% due to reduced demand in Automotive and Hydraulic Cylinders [8]. - Furniture, Flooring & Textile Products segment reported a 1% decline in trade sales to $331.3 million, with a volume increase of 2% driven by growth in Textiles [10]. Guidance and Outlook - The company maintained its full-year sales guidance of $4-$4.3 billion, indicating a 2-9% decline year-over-year, with updated expectations for volume declines in key segments [14][15]. - Adjusted EPS is anticipated to be between $1 and $1.20, reflecting an increase at the midpoint compared to 2024, driven by restructuring benefits [16]. - The company expects adjusted EBIT margin to be in the range of 6.4-6.8% for the year [16]. Financial Position - As of March 31, 2025, the company had $817 million in liquidity, with cash and equivalents of $412.6 million, up from $350.2 million at the end of 2024 [12]. - Long-term debt increased to $1.94 billion from $1.86 billion at the end of 2024, with a trailing 12-month net debt-to-adjusted EBITDA ratio of 3.77x [12].

Financial Data and Key Metrics Changes - First quarter sales were $1 billion, down 7% compared to the first quarter of 2024, attributed to weak demand in residential markets and automotive [21][22] - First quarter EBIT was $63 million, with adjusted EBIT at $67 million, up $3 million from the previous year due to restructuring benefits and operational efficiency [23][24] - First quarter earnings per share (EPS) was $0.22, with adjusted EPS at $0.24, a 4% increase from the previous year [23][24] - Total debt at the end of the quarter was $1.9 billion, with total liquidity of $817 million [25][26] Business Line Data and Key Metrics Changes - Sales in the bedding products segment decreased by 13%, while specialized products declined by 5%, and furniture, flooring, and textile products were down 1% [21][22] - U.S. mattress production was down low double digits, with total mattress consumption also down high single to low double digits [22] - The geo components business experienced better-than-expected growth in the civil construction sector [22] Market Data and Key Metrics Changes - Approximately 60% of trade revenues are produced and consumed in the U.S., with another 8% produced abroad and consumed in the U.S. [8][9] - Tariffs are expected to have both positive and negative impacts across businesses, but are likely a net positive overall [9][10] - The automotive business is expected to face indirect tariff exposure, with potential disruptions in the supply chain due to tariffs on auto components [15][16] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, improving profitability, and operational efficiency while positioning for long-term growth [18][19] - A strategic business review is ongoing, with plans to divest non-core businesses, including the aerospace segment [7][18] - The company aims to reduce leverage and prioritize debt reduction and funding organic growth in the near term [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and demand volatility, with expectations for a demand recovery in the markets served [31][37] - The company anticipates lower volume in the domestic bedding business due to softer U.S. mattress production, but expects increased pricing due to steel-related tariff benefits [27][29] - The outlook for 2025 sales is projected to be between $4 billion and $4.3 billion, down 2% to 9% from 2024 [27][29] Other Important Information - The company expects restructuring activity to be substantially complete by year-end [6][18] - Cash from operations is expected to be between $275 million and $325 million in 2025 [29] - The company is committed to returning cash to shareholders through dividends and share repurchases in the long term [26][29] Q&A Session Summary Question: Can you talk about the restructuring benefits expected for this year? - Management indicated that restructuring benefits will continue to roll through the year, with an annualized EBIT benefit of approximately $55 million to $60 million expected for 2025 [36][38] Question: Did you see any pull forward in consumer demand due to tariffs? - Management could not identify significant pull forward in demand, although some customers may have sold products out of inventory in anticipation of tariffs [41][42] Question: What is the expected profile of the aerospace segment post-divestiture? - Specific guidance on the aerospace segment will not be provided until after the sale closes, but first quarter sales were $53 million with EBIT of $7 million [45][46] Question: How are you thinking about margins for each segment this year? - Margins are expected to improve by approximately 150 basis points for bedding, 50 basis points for specialized products, and decrease by about 50 basis points for furniture, flooring, and textiles [49][50] Question: What is the impact of tariffs on the sub-$500 mattress market? - Management noted that the lowest end of the market is still supported by online marketplaces and imported finished mattresses, but the future remains uncertain due to potential reciprocal tariffs [76][78]

Financial Data and Key Metrics Changes - First quarter sales were $1 billion, down 7% compared to the first quarter of 2024, attributed to weak demand in residential markets and automotive [20][21] - First quarter EBIT was $63 million, with adjusted EBIT at $67 million, up $3 million from the previous year due to restructuring benefits and operational efficiency [22][23] - First quarter earnings per share (EPS) was $0.22, with adjusted EPS at $0.24, a 4% increase from the previous year [22][23] - Total debt at the end of the first quarter was $1.9 billion, with total liquidity of $817 million [24] Business Line Data and Key Metrics Changes - Sales in the bedding products segment decreased by 13%, while specialized products declined by 5% and furniture, flooring, and textile products were down 1% [20] - U.S. mattress production was down low double digits, with total mattress consumption down high single to low double digits [21] - The geo components business experienced better-than-expected growth in the civil construction sector [22] Market Data and Key Metrics Changes - Approximately 60% of trade revenues are produced and consumed in the U.S., with another 8% produced abroad and consumed in the U.S. [9] - The company expects the mattress market to decline mid-single digits in 2025, with domestic production down mid to high single digits [21] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, improving profitability, and operational efficiency while navigating a complex tariff environment [18][19] - A strategic business review is ongoing, with plans to divest non-core businesses, including the aerospace segment, expected to close this year [8][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and demand volatility, emphasizing the importance of restructuring benefits [19][31] - Concerns were raised about tariffs potentially driving inflation and impacting consumer confidence and demand [10][18] Other Important Information - The company is targeting a long-term leverage ratio of two times and plans to use cash from real estate sales and divestitures for debt reduction [25][29] - The restructuring plan is expected to yield significant benefits as demand recovers in the markets served [38][39] Q&A Session Summary Question: Can you talk about the restructuring benefits expected for this year? - Management indicated that restructuring benefits will continue to roll through the year, with potential upside as demand recovers [38][39] Question: Did you see any pull forward in consumer demand due to tariffs? - Management could not identify significant pull forward in demand, although some customers may have sold products out of inventory in anticipation of tariffs [42][42] Question: What is the outlook for the aerospace segment post-divestiture? - Specific guidance on the aerospace segment will be provided after the sale closes, but first quarter sales were $53 million with EBIT of $7 million [48][50] Question: How are margins expected to change across segments this year? - Margins are expected to improve in bedding and specialized products, while furniture, flooring, and textiles are expected to decline slightly [51] Question: What is the impact of tariffs on the mattress market? - The company noted that tariffs could raise prices in the sub-$500 mattress market, but the impact remains uncertain due to various market dynamics [80][82]

Financial Performance - Q1 2025 sales were $1.022 billion, a 7% decrease compared to Q1 2024's $1.097 billion[8] - Volume decreased by 5%[7] - Raw material-related price decreases and currency impact reduced sales by 2%[9] - Adjusted EBIT for Q1 2025 was $67 million, a $3 million increase compared to Q1 2024's $64 million[8, 9] - Adjusted EBIT margin increased by 70 bps to 6.5%[7, 8] - Adjusted EPS increased by $0.01 to $0.24[7, 8] - Cash flow from operations increased by $13 million to $7 million[7, 8] Guidance - 2025 sales guidance remains unchanged at $4.0–$4.3 billion, a potential decrease of 2% to 9% versus 2024[7, 15] - Adjusted EPS guidance remains unchanged at $1.00–$1.20[7, 16] - Operating cash flow is projected to be $275–$325 million[7] Restructuring Plan - The restructuring plan is expected to provide an EBIT benefit of $35-$40 million in 2025, with a full plan run rate of $60-$70 million[42] - Sales attrition from the restructuring is estimated at ~$45 million in 2025, with a full plan run rate of ~$80 million[42] - The company anticipates $15-$40 million in cash from real estate sales in 2025, with a total plan estimate of $60-$80 million[42]

Core Insights - Legget & Platt reported revenue of $1.02 billion for the quarter ended March 2025, reflecting a 6.8% decline year-over-year and a slight miss of 0.53% against the Zacks Consensus Estimate of $1.03 billion [1] - The company's EPS was $0.24, which is an increase from $0.23 in the same quarter last year, resulting in a positive surprise of 4.35% compared to the consensus estimate of $0.23 [1] Revenue and Earnings Performance - The change in organic sales for Bedding Products was -12%, significantly worse than the estimated -4% [4] - Specialized Products saw a -5% change in organic sales, compared to an average estimate of -3.1% [4] - Furniture, Flooring, and Textile Products experienced a -1% change in organic sales, better than the estimated -5.4% [4] - Overall change in organic sales was -7%, against an estimate of -5.6% [4] Trade Sales and EBIT Analysis - Trade sales for Furniture, Flooring, and Textile Products were reported at $331.30 million, exceeding the average estimate of $322.63 million, with a year-over-year change of -0.5% [4] - Trade sales for Specialized Products were $300.10 million, slightly above the average estimate of $298.78 million, reflecting a -5% year-over-year change [4] - Trade sales for Bedding Products were $390.70 million, below the average estimate of $409.90 million, indicating a -12.8% year-over-year decline [4] - EBIT for Bedding Products was $9.60 million, significantly lower than the average estimate of $18.65 million [4] - EBIT for Specialized Products was $28.40 million, surpassing the average estimate of $20.42 million [4] - Adjusted EBIT for Specialized Products was $31.80 million, exceeding the average estimate of $23 million [4] - Adjusted EBIT for Bedding Products was $13 million, below the average estimate of $16.45 million [4] - Adjusted EBIT for Furniture, Flooring, and Textile Products was $21.70 million, above the average estimate of $18.90 million [4] Stock Performance - Legget & Platt's shares have returned -8.7% over the past month, compared to a -4.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Legget & Platt reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, and showing an increase from $0.23 per share a year ago, representing an earnings surprise of 4.35% [1] - The company posted revenues of $1.02 billion for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 0.53% and decreased from $1.1 billion year-over-year [2] - Over the last four quarters, Legget & Platt has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - Legget & Platt shares have declined approximately 24.1% since the beginning of the year, compared to a decline of 6.1% for the S&P 500 [3] - The current Zacks Rank for Legget & Platt is 4 (Sell), indicating expectations for the stock to underperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $1.07 billion, and for the current fiscal year, it is $1.09 on revenues of $4.2 billion [7] - The outlook for the furniture industry, where Legget & Platt operates, is currently in the bottom 5% of over 250 Zacks industries, which may negatively impact stock performance [8] Industry Context - Sleep Number, a competitor in the same industry, is expected to report a quarterly loss of $0.11 per share, reflecting a significant year-over-year decline of 466.7%, with revenues anticipated to be $391.57 million, down 16.8% from the previous year [9][10]

Exhibit 99.1 FOR IMMEDIATE RELEASE: APRIL 28, 2025 Leggett & Platt Reports 1Q 2025 Results President and CEO Karl Glassman commented, "We are pleased to report better than anticipated first quarter earnings. Our earnings improvement is a testament to the excellent execution of our restructuring plan and operational efficiency improvement initiatives, as well as disciplined cost management. As we navigate the complex and fluid tariff environment, we are mitigating impacts while pursuing any opportunities to ...

Core Viewpoint - Legget & Platt (LEG) is anticipated to report flat earnings of $0.23 per share for the quarter ended March 2025, with revenues expected to decline by 6.3% to $1.03 billion compared to the previous year [3][10]. Earnings Report Expectations - The earnings report is scheduled for April 28, 2025, and could influence the stock price positively if results exceed expectations, while a miss could lead to a decline [2]. - Management's discussion during the earnings call will be crucial in determining the sustainability of any immediate price changes and future earnings expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 3.23% over the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Legget & Platt is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.30%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [8]. - However, Legget & Platt currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [11]. Historical Performance - In the last reported quarter, Legget & Platt met the consensus EPS estimate of $0.21, resulting in no surprise [12]. - The company has not surpassed consensus EPS estimates in any of the last four quarters [13]. Conclusion - Legget & Platt does not appear to be a compelling candidate for an earnings beat, and investors should consider other factors when making decisions regarding this stock ahead of the earnings release [16].

Core Viewpoint - Leggett & Platt is set to release its first quarter earnings results on April 28, 2025, followed by a conference call on April 29, 2025, to discuss various financial and operational aspects [1][2]. Company Overview - Leggett & Platt (NYSE:LEG) is a diversified manufacturer with a history of 142 years, producing engineered components and products for various markets, including bedding, automotive, furniture, and aerospace [3]. - The company is recognized as a leading supplier of bedding components, automotive seat systems, furniture components, flooring underlayment, hydraulic cylinders, and aerospace tubing [3]. Earnings Call Details - The earnings release and financial summary slides will be available on the Investor Relations section of the company's website shortly after market close on April 28, 2025 [2]. - The conference call will be accessible via webcast and can be joined by dialing 201-689-8341 without a passcode [2]. - An audio replay and transcript of the call will be available on the website for 12 months following the event [2]. Contact Information - Investor Relations can be reached at (417) 358-8131 or via email at invest@leggett.com [4]. - Key contacts include Cassie J. Branscum, Vice President of Investor Relations, and Katelyn J. Pierce, Analyst in Investor Relations [4].