Leggett & Platt (LEG) 31 Oct 232023 Q3 Earnings call transcript

Greetings. Welcome to Leggett & Platt Third Quarter 2023 Webcast and Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Cassie Branscum, Senior Director of Investor Relations. Thank you. Ms. begin. may you Branscum,

and Investor welcome me & are the on CEO; and Vice of President and Susan segment; President of Executive Earnings & President and Mitch Third Call. and President Executive Talbert, McCoy, Burns, Vice With the Ben President Furniture, of Steve to Relations; morning, Henderson, Platt's Vice Leggett Quarter Dolloff, CFO; Good Textile Hagale, and Tyson Manager call Products segments; Specialized the President Vice Bedding Products Investor Kolina Executive and Flooring Products Relations. President of Senior today

for the this of and have. Mitch the agenda any Ben details financial management. discuss yesterday's our is summary will we answer questions points you as and made in will for XXXX cover The follows: of our address the call remainder main press the and a and start outlook will results with group release morning operating

and the our press and contain we recorded discuss website, set without including reconciliations. section This posted call, material. release non-GAAP our details. being broadcast section be conference A that may IR along call express or This summary available of is & supplement yesterday's permission. slides with information the information We a for website. financial segment to documents Investor of Those on this replay is be recorded of Relations the call will copyrighted not transcribed, on Platt our Leggett

statements. and may undertakes forward-looking number materially obligation a Remarks the Actual today due concerning future events uncertainties, revise update strategies, or no risks results events, expectations, differ company and these to of statements. or objectives, results or trends constitute to

press Factors refer the factors information, Forward-Looking please release in Risk Statements. most entitled and subsequent these and For our and a to of XX-K risk recent and summary XX-Q sections additional yesterday's

I'll now Mitch. call over the turn to

and efforts third to thanking in Textile start employees demand for strength in in I the you tremendous versus it Good quarter and participating down Products demand their our partially challenging XXXX Ongoing impacted another our and quarter. quarter X% morning, by Bedding Flooring segment. Sales to call thank weak call. offset Furniture, decreases. products what for was were would segments, like added was X% material-related Acquisitions & raw but volume lower price our from Products the in third sales. Specialized by quarter continued our

$X.XX. Third This estate. gain or were includes per million quarter $X.XX per earnings share the $X share sale of from of real

our from were adjusted compensation lower item, by metal expense. Earnings and were earnings year-over-year, primarily debt Rod margin business this volume decreased residential Excluding in per $X.XX. markets. bad lower lower end These our Steel and share incentive decreases offset in partially

operations versus Cash million, third up of XXXX. was $XXX flow quarter $XX from million

year our end demand low and we've strike our guidance modest We Automotive on business. residential full so impact experienced environment, volatility the the in to in macroeconomic consumer continued reflect from are lowering continued far markets UAW the

We adapting new market management with are cash operating strong on focused improving on and customers our efficiency, driving engaging product to changes, and opportunities. anticipating

are that businesses, across foam continued operations a balance and opportunities improved strong including our sheet our further returns. of and to expected evaluating specialty are integration innerspring support We profitability, shareholder

the sequentially. moving XX% soft, Now down of versus were third demand results Products Bedding remains trends. Demand segment XXXX. relatively stable to Sales but in on our segment in quarter Bedding and U.S. market

in down in the quarter the improvement high to saw expect quarter, anticipate single a units a fourth sequentially deceleration due to sequential innerspring digits. but mattress we modest In seasonality. consumption full we and normal in units, mattress continue We year be to

down metal versus Metal We XXXX. mid-teens margin to margin highest in to expected. expanded narrowed its and point anticipate as be mid-XXXX still

in continue new opportunities our to customer Specialty near headwind largest to efficiencies, business the the evaluate to products, continue teams soft we profits. help especially offset In remains soft commercial volume. our Foam and term, While commercialize drive to demand operational

the increase of Additionally, number which development to service meaningful are efficiently, our to profitability Innerspring should evaluating including points. and our and gains, possibilities, savings of believe a moment mentioned our effectively our attractive and production at opportunities drive distribution proposition through our enhancing optimizing expanded and integration manufacturing and Operations Specialty customers ago, product I content further exists capacity a and growing we product value Foam capabilities to customers price and

the completed Specialized and volume increased August Products business our XX% in of to third segment in last UAW XXXX, in Hydraulic in strike third by had growth Aerospace quarter. our acquisition of versus quarter impact Automotive. minimal Sales Automotive the The driven year Cylinders and

So far in been the million. $X approximately fourth has quarter, the sales impact

continues the industry facilities, remains potentially uncertain to the broadens strike the additional unpredictable. OEM impact As and and to

we As and quickly their evolves, situation positioning maintaining with to communications the and ourselves support our are customers needs. react

Fabric with but third Sales demand European versus roughly levels. Work XX% has demand & in in retail to in in Furniture, markets. In our components, Products with soften Flooring soft activity XXXX, Furniture, demand improvement Converting were year-over-year, were Flooring home Sales civil and modestly Textile in and quarter down down slower Home across line softened end by the segment. continued furniture segment second geo quarter markets. construction driven

the due We seasonality. fourth demand across segment decelerate expect to the quarter to in sequentially normal

to call now over I'll turn that, With Ben. the

is Cash percentage increase $XXX be on second XXXX. This with working improved from operations capital sequentially In $XXX annualized as sales cash of focus a from operations you, the and $XX million, ended which from the quarter sharp quarter third to morning, million reflects third XX.X%, quarter, in working increase to Mitch, million million capital management. year's third a everyone. our We of expected both of we from last adjusted versus Thank and still generated $XXX good of quarter. XXXX. quarter

commercial Net maturities of trailing third quarter XXXX. no paper We November $X $XXX adjusted of X.XXx billion, to outstanding ended was with quarter and at end. million significant EBITDA total until debt debt XX-month including

maintain quarter, expect last we covenant our but modestly to sufficient continue from requirements liquidity. meet comfortably ratio increased As anticipated, to the and debt

debt pay maintaining on this expect as investment-grade excess and to focused ratings increase debt. and earnings time, improve over down ratio cash are we use We to

$XXX million under XX, September Board third $X.XX million on revolving $XXX million of $X.XX dividend. of declared and comprised $XXX at third year's capacity than was quarter of hand our dividend August, our Directors share, per liquidity Total In or quarter credit a remaining last facility. in higher cash X.X%

We continue manner. to disciplined a deploy our balanced and cash in

and to million, and prioritize for For $XXX the expenditures debt full share spending $XXX the $XXX reduction acquisitions term. capital repurchases minimal approximately as year XXXX, near of in of we expect dividends million approximately million we

of and available repurchasing include strategic organic cash. dividends acquisitions shares funding They Our paying long-term remain an priority funding unchanged. with for cash use priorities order growth, of

Textile As yesterday, earnings Bedding our to lower-than-expected full guidance our volume are we announced lowering year in Flooring and & primarily Furniture, segments. Products and sales due

We improvement in seeing fourth end not the upholstered markets furniture previously are that quarter was anticipated.

and quarter, of This beyond to uncertainties civil not so duration we soften our UAW improvement Automotive strike we experienced construction from have wire through continued applications. third strike. home the As move rod guidance what does business the on and severity around demand in retail, to trade and the far include impacts the due

Bedding to impact $X.XX down Specialized combined sales also down add assumes digits and sales expected at be in double XXXX X% sales expected XXXX. versus with to up products digits, reflects to high the completed X% of deflation high XXXX mid-single should down X% volume digits to guidance are Textile $X.X guidance billion billion digits. Products single and digits to or Furniture, Products down This low approximately XXXX. currency and is & the midpoint mid-single now single reduce acquisitions Flooring in The

to EPS $X.XX from to $XXX approximately adjusted gain XXXX the and recognize to share range depreciation share of the earnings per third approximately per from estate expense tax guidance net are $XX fully including $XXX $X.XX net amortization expected effective of share of XX%, now year million of recognized $X.XX quarter. assumes and we rate of diluted expected to Full full now million, are real of sale share of per $X.XX, year proceeds expect shares in be of to $X.XX be interest being million. in and a approximately insurance the $X.XX. year per the for gain earnings

Based of discipline X.X%. to X.X% EBIT stronger products. cost upon forward be and will full our be margin range and material costs this drivers efficiency as going to adjusted raw pricing improvements, improvement guidance year continued framework, Important innovative margin volume, is expected fluctuate

our to financial and committed value shareholders. are long-held maintaining long-term our strength We for creating

is all As always dedication achieve our success the because of the our case, and employees' we levels company. of work hard at

back call With to those turn over the I'll Cassie. comments,

ready Thank to Operator, we're you, begin Ben. Q&A.

[Operator first question Instructions] with Goldman Sachs. Susan from is Maklari Our

there? to things the you guess, about to that couple strike the full everyone. Good morning, start Specialized talk Auto, there as there a you. think How Perhaps Thank should I I volumes in start segment. ability about can on first, we of and your business? as about we back to think the return especially. in OEMs through getting coming to hit resolution eventually was work potentially want

quarter, the should the cost I the one, and or then impact thoughts perhaps do noticed to there. some that of And mentioned just structure you things business release two, there? any further also had we that Any on the that improvements you how but in facilities in can margin think consolidated you this about

all if I'll to Yes. miss... Sure, me Susan. try Remind I get and those.

lot. a it's know I

That's good.

the direction appear to tentative U.S. X big themselves. now I course, auto by a still UAW to start among things let's the in On have there. impact, be mean, members reached union of better the moving approved with producers agreements be

definitely out spot uncertainty been possible. than appear to a could some towards moving but have still better there, So be

way progressed against for there the OEMs tricky little on different because a so a strike the all the of guidance And three us facility. and

impact. of a different each steps those really, had So

impact You was quarter. saw for us third in the minimal pretty the that

October, significant through the too basically, quarter as we've fourth far, so And through not as well. gone

it's that of the that's tiers the think including at learn us, to it's people so from I pandemic. impact three One, during the all think reasons. different said, I have I would due through go had you that to I OEMs, everybody. as difficulties supply think tried us, a say facility-specific very for -- the chain, in that we as mainly and I also

people the supply respond and in through we orders and position sales decrease chain ourselves some, And a in where very it. strike the trying couldn't were to with while not the cautious decreased so be some put

And so your gets to that question.

running, a far. move are, happen and seen too if of outlook, in significant. of be I back will know. our little We've think think tell. and through forward getting So the what But go don't we we've it is those overnight, be we normal just but as shouldn't are a back as back I book so our -- to in, we there'll baked order up I course, to to facilities coming continue now think labor bit as slowdown, Hard

I way, to decent little So maybe a if much are. pretty we things bit forward return a that as gets will but think continue it worse, in move

So likely we'll I we'll then stay is, to it to on it us. whether is that change report need about to not. keep be if we'll that -- we think significant there. posted don't or think But a

example for ways and in in Automotive Asia that that look a one and that that's our Then there, we and us work to some I same one cost a large the optimizing business. efficiency made had those pull Facilities improve the think to we in and can really of together. after a of products structure doing relatively consolidation type the realized small footprint yes, operating continuing there good our

It the gains for third I for So good that taking of did drive it's full in look of good a us us we'll for huge we wasn't the should continue consolidation, impact have but a think have, cost of example advantage and more quarter. business. across to opportunities the it some forward. those some going It

outlook for still inventories. the Automotive have be We think I strong. low to continues

We UAW dynamics the have us. especially ups There's encouraging the the the say, kind in strike, fleet. that forecast, and there been an up I well. I showing of aging but But certainly long-term for have and market downs in would some think vehicle as China is with outlook

we that the the making a good we're in -- about one our making here in think the U.S. earlier doing of of progress is the some production I solving had job talked issues year. in facilities we that team of Finally, in

But recovery there, and So work progress make business, progress our continuing to inflation have margin there, up improvement we in we'll probably of commodity and continue but significant still XX% now about outlook to of recovery some to some do, that continue the drive to across and online. probably talking we'll with drive made end about costs to about have our the the us good deflating margin about feel improvements. there,

very color. Okay. helpful That was

all. it hit you think I

the about the you My a bit maybe where expectations? done. question well second not thinking about changed Can that you versus what we your what are more think within fourth quarter guidance. today to, as and So has and is talk has

Yes, confusing. it know sure, do bit that. happy Ben, you I looking little to But do to be can that. see a mind

Yes, question. sure. the thanks for Yes. Susan,

talk let's not changed. first, maybe So about has what

demand So demand mattress seen volumes stable are we've Specialized within there. our segment. in innerspring and businesses strong and Also, we've got mostly continued the unchanged,

Switching in furniture as end not market has upholstered to has Fourth expected. what materialized quarter really that improvement changed. markets

So that to only business, but and Converting Foam impacts supply we upholstered foam Furniture not Home also Fabric also furniture our Specialty buns manufacturers. our business where

Geo-components in seen business our civil We continues funding anticipated impacts business, in think there in a that's Trade well. than softer seen momentum construction And releases Also still also business, demand -- thing, impacted be Components lastly, grid I pushed our Bedding, Geo the Home out. Wire as but wire to as expected. related the getting home declines we've project we our but timing softening Improvement as haven't Rod In to continued lower then as which well volumes. would Flooring Retail, our continued and also say keep

things of those there, key different are So highlights. but moving a the lot

hoping And generation in more if to for to earnings other for impressive. cash Okay. back despite the can to you. the change The come for cash to outlook down that one you taken year. to the talk I'm and continues sneak demand you as then that again having capital we're drive improvement for? perhaps not this you Can in doesn't That's ability your helpful. pull levers And going generation be did working continue very

Sure, great question. another Susan. Yes, that's

had cash definitely we So generation third some in really quarter. good the

we've built inflated XXXX teams up over good challenges to then our supply result the times a capital done job gone As a inventory years demand have where portfolio but talked managing about, some couple through and really and last dynamic of in with of was has the our started -- as is of costs, working really chain that weak. and

as And inventory that. cash a result bring that so continued we've to driven and of down

We also have focusing receivables. done on a good job of our

a a our a about well. receivables think as I been in they've payables time, as shape long in good are in

and we all bit going there saw good looking really said, a third the look levers So do a at at little really more With perspective a improvements there's quarter. performance from that working capital that can we in forward. think

cash through operating little about $XXX bit quarter, about -- a earnings million in to think improvement and generation you fourth as capital, in then million So for feel working more the we we cash. that good getting $XXX to

things those So really job. great focused we're teams are on and the a the done that have

question with Griffin next Bobby Raymond is James. from Our

hit changed months, I more down. to last, It's just A guess coming I spread longer-term first on -- a over the segment about want that wanted has with to segment. lot the Products first, talk in I XX it, question. Bedding call the especially

type today back little the that or bit scenario, further recovery to be all-time of that and back doesn't think setup? levels? X-ish, business XX-ish XX-ish, business. as EBIT used we of What could So it is would of where come kind where we're in under on if be is what margin We is a volumes of a is go those a pressure, that to in it margin profile Rod the -- world stays used business if the ever spread high a spread probably to

it you. is jump Tyson. this for to I'll in try and answer Bobby,

been I think last lot months, of related. supply we craziness, changes and the -- demand of a a chain over obviously, XX there have lot

profile still the think over longer fundamental think margin exists. we the I term,

a work drag, it We course, said have some volume. top but few times, The is of to quite do. we've

as recovery be exactly what and Foam comes the a us it a but part integrate, like operating looks of what our of big so driver not and big from where do well. we've mentioned this improve our to for Specialty in to efficiencies that need type business. products the work we will only And that That's

development commercializing just how products work that, of try manufacturing we and most On serve content our distribution to then new base from our and our to top operations also product especially gains. our with customer and and effectively in continuing can continuing think to

think that terms changing of we us of to, level type same gets lot the different market that we kind a and of I we margin. things think is in So although lot on push continues to of a that have

Okay. you're ECS the And doing time then some from still looking we impact out the at changes? innings a I think of dive these second we this have work about that looking and facilities, business is different of just Or some you to the called the of think there potential potential guys kind or of the different the of could rationalizations initial time options. frame some options? through Is inside early maybe all about at where complete in are sort

the great sure about in Bob, the how back -- really early also think we're and I go innings. Bedding still do think take a It's say, to "Hey, to in cash question and have to We market, the and that's that's we I changes doing. work so we're we're profitability driving what outlook And and flow adjust need and returns?" make still do. our actions strong shareholder

a that. mentioned the Automotive we small example I of think consolidation is that in good

So certainly that in look we've across lot before. mentioned other we'll a Bedding but business,

at you'd lot But there's I Tyson, that can more know not add this anything say there? a point. we

remember in optimize them No. trying Sure. mentioned working footprint. a on in couple we Specialty just we're Foam. the I mean, to of can't but I if -- past, our

the trying States. part well. and working the Coast, United on on already some to of as some West just also the in there southeast where We're the we're We of have reduce complexity some

we beyond companies that four Bobby, LNP. into the Leggett was about were ECS goes, business, And integration it pause of acquired what being that, also had probably where we've But also Foam to brought together. even I to it Specialty when think talked

So completed. needs top innings have be that still lot early that a of of --, on work we it's because to that

ratio And for And out guess, credit of would within times me. great some you feel about back stay there, and don't recently the opportunity know stuff. know but lastly way of were What investment-grade When maintaining, guess, aspect? question visiting I kind leverage would you talk we've have -- you guys guys a the bit give Okay. of helpful. I I'll leverage I target differently. Ben, net and I grade. That's the to little well investment a couple talked the that just come be you to a rating maybe agencies a

for Thanks don't the think Bobby. target X.Xx out a there Yes, about net we or but like question. that have strong said we debt-to-EBITDA, Yes, under really as we've grade. really investment right formal now,

that's it. So about how we think

details That's All and quarter. best here I appreciate luck the in fourth right. helpful. the of

Thank Bob. you,

question Our Hughes with next Truist Keith from Securities. is

to I that events in know in back it if how the it's strike, it's work? kind this you the of of directionally, to some effects the after XXXX But Automotive. couple got early there given supply was last before kind better. settlement going of chain you are, Is just feel a far in the would months of murky still of how

a the answer precisely know wish question. It's that. I I great to

just looking I'm directional... for or anything. not I'm

Yes. good No, question. it's a

it gets state impacted for some supply is approved I sure go in we've if through back chain, by think been that. right, the there's the we less But that as today, you're been disruption that OEMs. at it the

may into industry. might part or next but early go there don't too will year think the I that pushout feel significant a the recovery, it be a little of for of be that us I for So like bit

be the have slowing but from the then think if recent had I back to frame that I chain, supply we ramping extent you'd that the is and back as dealing choice the as you time no then that labor And down think went and through really would production issues. up with start experiences, expanded, fear everyone know hard.

approved think disruption. too So there I to much get spot, if the again, that won't a gotten be we've hopefully, contracts

market still now the I right is for forecast, the a dynamics, think probably demand other are is positive. I given these forecast The sketchy outlook and that think outlooks little there. still IHS but

pecialty Foam What's your quarter just Is this Bedding, talk to U.S. that that And spring the performance. has better you dynamic as do done for the market unit about a compared the every share going whole? two? year. business wins? And between I'm on Okay. think really you those with speaking Could -- to

digitally think, was U.S., market This I We market Keith. native pretty is than this, back even in of really and bedding the where so disrupted. the last in broad Specialty had Sure, segment that to Tyson. we a heavy our business Foam about talked year Sure. our emphasis more the customers going with

the the of customer And about that we recovery we needed base. market even so diversify to the we the talked in that recovers part need had -- early our

has in And tough those really they've a making progress opportunities, so there. some trying been to team our market, even commercial uncover been and working hard,

there. as I the so been we've diversifying just the market up And the helping of even It's is in nature that the some more slow if improvement market, customer it's think base, the us recovering. that's even wins and to pick able

And in to, you're correct? Foam, referring that's

to I'm referring yes. Foam,

Yes.

guess Okay. this. on And final I thing

you customers, a -- the Foam give list much was Specialty largest Foam, one us If at couple. concentrated idea represented you and how that at of I think an the look Can customer sales? time, with ECS very our

but question Keith, are have that kind answer, like was it to the into going we a the native want customer digitally more many diversify growing customer try list. Don't represented. tough some to but that we It's concentrated key as with how base. to into customers, we get of back still history, But

Yes.

our just one it And segment done has that that is part -- acquisition, I a good said, of the the mean, to team of a right say, I D&B you the bit, time wasn't little diversifying or of market as in has focused a mean as is still two. them. at decent Tyson, it base. the list struggled job So customer of

That's right. Yes.

Peter Keith question [Operator with from Piper Instructions] Our next is Sandler.

ask I the about metal wanted margin. to

some the there any direction margin impact wire. on of way that EPS. the demand then out related note, in EPS last with that weakening couple and as You been year-on-year? you've talked just did on months? of What's to impact rod Is an to about weeks the a quantify And to call metal

Peter, Tyson. jump I'll this is in.

So major comparing the the I quarter like year-over-year a at expected, was that third Bedding the highest decline But because and the margin last up driver last said, year. in metal but really against year it and when expected, we're in it decline of EBIT. Rod scrap was run was was the through second after

did out lower, seeing trending We both at and volume we're the we're a the being that call the which softness of is trade, rod. that high but is more selling, side a lower also than just price selling lower mix combination to we're of carbon what towards carbon what applications,

So on product I where we'd stability impact that our and we kind does an we're so trade But still say of end, it. Margin. think, selling to overall expected Metal us. that in It's on really the of have the mix we're seeing, lower is

out, spread. in I'll a there just sort points add the middle couple year highs of of but and of that was it for you on maybe the Tyson, just called historical last

expected we come very, is but to and that relatively as what teens, there. down, And high levels we through it has go at stable, very so still where I think, we which is, remains it been say

thing. other then And

internally, rod and some on the the spring do. consumption Our right? other volume on depends of just our focus things that It of is we really

ancillary an for us. almost is market the So trade

it's And sometimes, stronger.

really weaker, that a our about coming more utilization. it's part part bit it's weaker, it? think to a It's strategy. but not of sometimes right. little Is a of way it's right That's And capacity

Okay.

change decline lower does presumably to lower can And I shift put outlook you're but together, margin, that all? at so still if for I price in guess Rod that margin mid-teens looking that

think that covered. carbon updated so. expect having for We what don't of of for the guidance Bedding I fourth still has part been mix lower quarter. And is the that the is just No, part that. That our

Obviously, that to remained right. because drive Bedding what's All to enough. like perhaps then and weak. like? the pricing commodity over pivoting deflation. environment as the in the Okay. Furniture and companies But to keep has running? demand there's production looking pricing just some the are Has Good And competitive intensified environment factories

especially are a something on that be it's it's market, having to competitive of. always Peter, when times we're like Well, top always soft this,

closely last they we So that year, overall just along down are quarter, just but we point. see at the and stable it. this drive we'd customers although need. have they're are they fourth that's about, some watch serve very that deflation What we I said from that -- our Like into commodities of this ability to we the with our to see think value relatively talked point, modest where kind probably at just

different Yes. that And up I we as in mean in true And own or whether our think I innovation. it's our you holds the business said I have our ways, deliver think furniture but country to competitive, be we to to throughout customers to value this before, through need through well. also ability service them

One just leverage last the a as Great. follow-up on question Okay. guess to Bobby's I question. ratio.

a mind, my sure an grade ratio I rating, would thinking that talked make ideal leverage of of guess, So kind kind there had in to investment about X.Xx but to to comes to avoid like threshold of you that is Is maintain you I level order set. want X.Xx.

Yes.

the that's think lot quarter near from look good last the a believe a of We're third I think bit to We fourth third a up modestly quarter the way peak. we'd will it. about X.XXx. end quarter. X.XXx at we like. Obviously, But than like at which leverage quarter, at or we're is higher at is think little our

should that be metric about So in that range.

that debt calculation. And covenant in really, is too the that at thing look our we

a to little that's bit more So favorable us.

X.XXx indicates. headroom bit there the than So more a there's little

points So from we that's a at really that look a leverage few take of the perspective. key a

our a follow-up Sachs. final Maklari Goldman And with is Susan from question

things is say you're couple imply the furniture seeing that you what that? of the is One a higher-end some things how There's in that that you of hearing you what coming wanted stronger, in of do health if relative the we're when actually one think that say a the I businesses to within would earnings some of consumer consumers weakness could pickup highlighted of on. relatively some in think follow for would within residential furniture, of up and seeing are segments, I you consumer are, that about the quarters? those overall? about season the this just we're And you those that flooring to and those

off, of continue the the certainly consumers it you're thought Yes, great the on travel I of likely that then clean we help outside question, spending. landing or Susan. holding would But days. up. seen I'll consumer at in come prospects spending But year, in were you those than are We've can and services think kick better I and and have soft me Tyson, beginning areas up more right durables. these other consumers feeling think, economy

that after remodeling from impacting the to now pandemic and some of the and markets. away shift is -- there's So impacting a during strong home shift it the housing that's

sort market of signals. improving, it's So are I relatively mix People spend. weak. still think to Job but strong. it's continuing remains Sentiment is

little provides a starting But credit sort balances decline and bit little savings confidence. to up to of see think bit. we're some that a I be starting

the are rates Of think, I and inflation economy. creates That elevated interest around some course, concerns, up. is

bit concerned the resumption And of bit student I well. ahead would around the payments of little say drag a could loan be a a little as

that with there. will in strength relatively but that we're spending today, optimistic seeing -- the So the I consumer market remain and the hang job strong

do it's balance durables. shift their just more get and and travel the focus us, a the between bit more I we think services of to and a for normal

any you Tyson, or But there? view would add different things

suggests kind from really, the The general we've housing Mitch. more the what home I think the of of away you consumer trends of just same mean it. No, not had I then and focus seen. also

but continuing to demand. slow for we're plan levels stable of So

probably I I recover And same. to The guess back of And feel I also the to your it's end, about customers think, hear That's part first. the slow. consistent. But I kind market Susan. that from start more think is well, question, we would still as the think of Mitch generally, way high think more we we overall, yes, of it but our and what it's

optimism in some that really year, would was optimism see to into quarter, didn't. furniture then they sales is and the the I Yes. middle we the we'd and didn't. the really went recover year in start home as there residential that there we that feel stronger And of end fourth like markets some

little I optimistic I I'd bit to just concerned think about changes to say of there's that -- demand. being start so in don't -- a we see some And really until

we're manage hard to the trying but we than come rather hopefully predict. sooner will later, back, it's why know that's volume to current environment, So

Yes.

Any the appreciate continued some potential you And think hold the that When across side, you price there? of thing. one and continue Okay. I color. deflation the businesses. last for can positive do most overall thoughts about business those the on commodity you cost to think

do. I Yes,

folks gone deflation. aren't. far maybe so on I think managing our terrific indexes as lag, Many of like that through some have our them that with contract-based you've little a inflation movements bit done businesses are a of and job but of go and a

continue a margin well a on think we little done see have I think percentage managing that, our if overall, to That's we to so we'll some deflation, -- as a been modest bit. see good drag with too. helps that continue I and it, And job

feel ability confident that. I to maintain in So our

all thanks Okay. answering with the for luck question, All everything. Well, and good right.

Thank you very Susan. much,

floor for question-and-answer closing turn would over the session. concludes comments. like I This to to the back Cassie

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Thank you. conclude conference. This will today's

for at may You lines your time, disconnect and your this participation. you thank