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The call presents a balanced picture: strong execution on restructuring, meaningful deleveraging, improved cash flow and operational progress across products and geographies are offset by continued revenue declines, persistent weakness in residential end-markets (particularly Bedding), supply-chain and segment-specific headwinds, and conservative 2026 top-line guidance. Management emphasizes margin and balance-sheet priorities while acknowledging demand uncertainty.
Leggett & Platt guided 2026 sales of $3.8–$4.0 billion (down 1%–6% vs. 2025, with ~3% of the decline from divestitures), with volume expected flat to down low-single-digits (Bedding down low single digits, Specialized down low single digits excluding Aerospace, FF&T flat) and inflation/currency providing a low-single-digit sales tailwind. GAAP EPS is guided to $0.92–$1.38 (including ~$0.02–$0.11 of restructuring costs, ~$0.05–$0.08 of Somnigroup-related costs and ~$0.11–$0.25 of real-estate gains); full-year adjusted EPS is expected to be $1.00–$1.20 (midpoint driven by operational efficiency, favorable mix and full-year metal-margin expansion, partially offset by lower volume). Adjusted EBIT margin is projected at 6.3%–7.0%; cash from operations $225–$275 million (no working-capital benefit assumed); CapEx $100–$115 million; and the company expects normal seasonality with weaker Q1 and Q4. Management also reiterated a ~$70 million restructuring EBIT run‑rate (≈$63M realized in 2025 plus ~$5M in 2026), $70–$80 million of expected real-estate proceeds (≈$48M realized), and plans to use most excess cash flow to reduce net debt after finishing 2025 at 2.4x net debt/adjusted EBITDA en route to a 2.0x target, while retaining capacity for buybacks and small acquisitions.
Completed 2024–2025 restructuring with ~ $63 million of EBIT benefit flowing in 2025 and an expected ~$5 million in 2026 for a ~$70 million EBIT run-rate; total restructuring cost ~ $80 million (about half noncash).
Used Aerospace divestiture proceeds, cash from operations and real estate sales to reduce debt by $376 million in 2025; net debt to adjusted EBITDA improved from 3.8x to 2.4x, moving meaningfully closer to 2.0x target.
Operating cash flow was $338 million in 2025, up $33 million versus 2024; adjusted working capital was 11.6% of annualized sales, down 140 basis points year-over-year; company expects to prioritize net debt reduction with excess cash flow in 2026.
Fourth quarter adjusted EBIT was $48 million and adjusted EPS was $0.22 (up 5% vs. Q4 2024 adjusted EPS $0.21). Full-year adjusted EBIT was $263 million (down $4 million vs. 2024) and adjusted EPS was $1.05, essentially flat year-over-year.
Divested Aerospace in Q3 2025; progress in semi-finished bedding products (Eco-Base, pre-foam-encased ComfortCore), Specialty Foam customer diversification, Automotive innovation pipeline, launch of Home Furniture facility in Vietnam, and expansion into medical nonwovens and retail growth for Geo Components.
2026 adjusted EPS guided to $1.00–$1.20 and adjusted EBIT margin guided to 6.3%–7.0%; company expects inflation and currency to add low-single-digit sales benefit and plans to reinvest and pursue small strategic acquisitions while prioritizing deleveraging.
Expect $70–$80 million of real estate sale proceeds (about $48 million realized in 2025) and a projected $0.11–$0.25 per share gain from real estate in 2026 guidance assumptions.
Greetings, and welcome to the Leggett & Platt Fourth Quarter 2025 Webcast and Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ryan Kleiboeker. Please go ahead.
Good morning. Welcome to Leggett & Platt's fourth quarter and full year 2025 earnings call. With me on the call today are Karl Glassman, CEO; Ben Burns, CFO; Tyson Hagale, President of the Bedding Products segment; and Sam Smith, President of the Specialized Products and Furniture, Flooring and Textile Products segments. We posted to the IR section of our website yesterday's press release and a set of slides that contain summary financial information along with segment details. Those documents supplement the information we will discuss on this call, including non-GAAP reconciliations. Remarks today concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements. Actual results or events may differ materially due to a number of risks and uncertainties, and the company undertakes no obligation to update or revise these statements. Please refer to yesterday's press release and the sections in our most recent 10-K and subsequent 10-Q entitled Risk Factors and Forward-Looking Statements.
I'll now turn the call over to Karl.
Thank you, Ryan, and good morning, everyone. Early last year, we shared our 2025 priorities, which included strengthening the balance sheet, improving operational efficiency and margins and positioning Leggett & Platt for profitable long-term growth. Thanks t...