CARTHAGE, Mo.-A jump in gross margin and reduced income taxes offset relatively flat sales to deliver an 11.6 percent gain in net income for Leggett & Platt, to $49.1 million, in its fiscal first quarter.
Gross margin in the quarter, which ended on March 31, increased by 141 basis points to 20.2 percent. Income taxes were down 10.3 percent. Selling, general and administrative expenses increased 10 percent in dollars and 117 basis points as a percentage of sales, to 11.5 percent, somewhat offsetting the benefits to the bottom line from the gross-margin pickup and decline in income taxes.
Net sales fell 1 percent to $936 million. This included a 1 percent drop in sales from Leggett & Platt’s residential furnishings segment. However, earnings before interest and taxes in this unit increased thanks to a gain related to a hurricane insurance claim, cost improvements and a favorable product mix in the U.S. spring business unit.
David Haffner, Leggett & Platt’s CEO, said the company is “pleased with our start to 2013, and remain optimistic that we will continue to see longer-term benefits from ongoing consumer and housing-market recoveries.”