Leggett & Platt (NYSE:LEG) reported weaker-than-expected first-quarter results on Thursday and withdrew its 2026 outlook following the announcement of its pending acquisition by Somnigroup International Inc. (NYSE:SGI).
Shares of the company fell 8.06% after the earnings release.
Earnings and revenue miss expectations
The company posted adjusted earnings of $0.15 per share for the quarter, missing the analyst consensus estimate of $0.25 by $0.10.
Revenue totaled $918 million, down 10% from the prior year and below analyst expectations of $949.65 million.
Leggett & Platt said the decline reflected a 5% impact from divestitures and a 5% decrease in organic sales, driven by a 9% drop in volume across most of its end markets.
Company withdraws 2026 guidance
The company withdrew its previously issued 2026 financial guidance due to the planned acquisition by Somnigroup International, which was announced on April 13.
The transaction is expected to close by the end of 2026, pending shareholder approval and regulatory clearances.
President and CEO Karl Glassman said quarterly sales were generally in line with company expectations, but acknowledged weaker conditions in the bedding business.
“demand in our domestic bedding business was lower than anticipated, as the overall health of the U.S. industry remains challenged.”
The company estimates that the U.S. mattress market declined by a high single-digit to low double-digit percentage during the first quarter.
Profitability pressured by lower demand and margin compression
Adjusted EBIT declined to $43 million from $67 million in the first quarter of 2025.
Leggett & Platt said the decrease was mainly driven by lower sales volume, margin pressure within the Flooring business, and the absence of contributions from the divested Aerospace segment.
The company also noted that the war in Iran contributed to rising transportation expenses and longer shipping transit times late in the quarter.
Additionally, higher chemical prices are expected to pressure costs further during the second quarter.
Cash flow weakens as debt remains elevated
Operating cash flow was negative $56 million during the quarter, representing a deterioration of $63 million compared with the same period last year.
At quarter-end, net debt stood at 2.8 times trailing 12-month adjusted EBITDA.
More about Leggett & Platt
Leggett & Platt manufactures engineered components and products used in bedding, furniture, flooring, automotive seating, and other industrial applications. The company supplies materials and systems to manufacturers across consumer and industrial markets globally.