Leggett & Platt (NYSE:LEG) plunged 8.5% on Tuesday after the bedding components designer said it intends to consolidate 15 to 20 out of 50 production and distribution facilities in the Bedding Products segment.
The company also plans to cut 900 to 1,100 jobs gradually and expects to incur a $450 million impairment charge.
Leggett & Platt stated that it will continue to adapt its Bedding Products strategy, emphasizing innovation and higher-value content to offer additional solutions for customers.
The company aims to optimize its manufacturing and distribution footprint, enhancing overall business efficiency while ensuring continued customer service capability. Executing plan initiatives is anticipated to yield $40 to $50 million in annualized EBIT benefit by late 2025.
However, in response to market changes, the company is withdrawing its long-term financial targets and recording an estimated $450 million long-lived asset impairment charge in 4Q23 related to prior-year acquisitions in the Bedding Products segment.
"We are taking actions to create a more focused, agile organization with a portfolio of products and operating footprint aligned with the markets we serve. The bedding market has experienced unprecedented change in recent years and the competitive landscape has continued to evolve,” said the company’s President and CEO Mitch Dolloff.
“Reshaping our Bedding Products strategy is expected to better position us for long-term success as the leading provider of bedding solutions across the value chain.”