Diversified manufacturer Leggett & Platt Inc. reported second-quarter sales of $1.1 billion in fiscal 2018, an increase of 11% versus the second quarter of 2017.
Organic sales at the Carthage, Missouri-based producer grew 10%, with volume up 6% from strength in automotive, bedding, adjustable bed and several other businesses. Raw material-related price increases and currency impact added 4%. Acquisitions contributed 3% to sales growth but were partially offset by divestitures.
“Notably, our Comfort Core innerspring units were up 25% in the second quarter, reflecting the improvement in our U.S. spring business from market share gains with both traditional and direct-to-consumer customers,” said Karl Glassman, Leggett & Platt president and chief executive officer.
L&P second-quarter earnings were $0.63 per share, down $0.01 from the second quarter of 2017. The earnings benefit from sales growth was offset primarily by higher raw material costs and a pricing lag the company experiences when passing along higher costs.
For the full fiscal year, L&P is reducing sales and earnings-per-share guidance due to a combination of factors. For example, the company said, its Home Furniture and Fashion Bed segments have been negatively impacted by softening demand and higher steel costs. While adjustable bed demand remains very strong year over year, sales to some major retailers are lower than previously expected. Finally, the company said it is incurring startup costs in its Bedding and Adjustable Bed segments to launch significant new programs.
“To accommodate ongoing growth, we are increasing our full-year estimate for capital expenditures by $25 million to approximately $185 million, primarily due to recently awarded business in Bedding and Adjustable Bed,” he said.
Second-quarter sales in the Furniture Products segment, which includes adjustable bases and bed frames, as well as the Fashion Bed Group, increased 9% to $295 million, primarily from volume gains in Adjustable Bed and Work Furniture.
In the Residential Products segment, which includes bedding components, foam, other bedding-related products, Spuhl AG wire-forming machinery and Global Systems Group, total sales grew 8% to $443.5 million.
Total sales grew 23% to $170.5 million in the Industrial Products segment, which includes steel rod and wire.
In May, L&P’s board of directors declared a $0.38 second-quarter dividend, two cents higher than the same period last year. This marks 47 consecutive annual dividend increases for the company, a record that only 10 S&P 500 companies currently exceed.
For the 2018 fiscal year, L&P has reduced its sales guidance to a total of $4.25 billion to $4.35 billion (versus the prior range of $4.3 billion to $4.4 billion), an increase of 8% to 10% versus 2017. The $50 million reduction in the sales midpoint is primarily due to demand softness in Home Furniture and Fashion Bed and lower-than-expected sales in Adjustable Bed, despite strong year-over-year growth in that business, the company said.
