Leggett Nets $250M From Aerospace Sale, Aims to Deleverage

Core Insights - Leggett & Platt, Incorporated (LEG) has completed the sale of its Aerospace Products Group to Tinicum Incorporated, generating approximately $250 million in after-tax proceeds [1][9] - The sale aims to streamline operations, reduce exposure to volatile markets, and reinforce LEG's strategic priorities, allowing for a more focused business portfolio [2][3] Business Restructuring - The Aerospace Products business generated $190 million in net trade sales in 2024 but was considered non-core to LEG's main segments, which include bedding, furniture, flooring, and textiles [3][4] - The divestiture allows LEG to reallocate resources towards higher-growth opportunities within its core segments [4] Financial Impact - Following the divestiture, LEG updated its full-year 2025 guidance, projecting sales between $3.9 billion and $4.2 billion, down from a previous range of $4.0 billion to $4.3 billion [7] - Adjusted EPS guidance was lowered to $0.95-$1.15 from $1.00-$1.20, with an implied adjusted EBIT margin expected to be between 6.3% and 6.7%, a decline from the previous range of 6.5% to 6.9% [7] Operational Adjustments - The company is consolidating its bedding and furniture operations, planning to reduce its plant count from 50 to 30-35 and cut its workforce by up to 1,100 [5] - Proceeds from the sale are expected to be used to pay down debt and strengthen the balance sheet, aligning with the company's goal to enhance financial flexibility and improve margins [6][12] Market Performance - Shares of LEG declined by 1.2% on the day of the announcement, although the stock has gained 10.2% over the past three months, underperforming the Zacks Furniture industry's 13.2% rise [2][8] - The company reported revenues of $1.06 billion in Q2 2025, down 6.3% year-over-year, with adjusted EBIT rising to $76 million and adjusted EPS growing 3% to $0.30 [11]