What Happened?
Shares of manufacturing company Leggett & Platt (NYSE: LEG) fell 12% in the morning session after the company reported second-quarter results that showed a drop in sales and a weak forecast, with a broader market downturn adding to the negative sentiment. The furniture and bedding component maker's sales decreased by 6% from the prior year. While adjusted earnings per share ticked up slightly, the figure missed some analyst estimates. The company's outlook also concerned investors, as it expected a mid-teens volume decline in its Bedding Products segment. Leggett & Platt did maintain its full-year guidance, but that forecast still projected an annual sales drop. The negative report landed amidst a wider market sell-off, which was triggered by a weak U.S. jobs report and the announcement of new tariffs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Leggett & Platt? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Leggett & Platt’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Leggett & Platt and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 29.7% on the news that the company reported decent first-quarter 2025 results: its revenue was in line with Wall Street's targets, while its EPS topped expectations. Despite the top-line decline, margins improved. That margin expansion, combined with cost control, helped adjusted EPS to clear analyst expectations. Overall, this quarter was mixed, but considering low expectations, this was a good quarter.
Leggett & Platt is down 14.3% since the beginning of the year, and at $8.21 per share, it is trading 41.9% below its 52-week high of $14.12 from September 2024. Investors who bought $1,000 worth of Leggett & Platt’s shares 5 years ago would now be looking at an investment worth $206.68.
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