In addition, continued higher energy costs are expected to reduce earnings by about a penny, and several smaller factors are also expected to lower earnings.
Despite market share gains, continued weakness in many end markets are leading to a second quarter sales decline. Through the first 10 weeks of the quarter the company's consolidated same location sales were down 7 percent, with segment sales trends as follows: down 6 percent in Residential Furnishings; down 10 percent in Commercial Fixturing and Components; down 9 percent in Aluminum Products; down 17 percent in Industrial Materials; and up 3 percent in Specialized Products.
Market demand, and its impact on sales revenue, remains the biggest single lever affecting Leggett's earnings. With this preliminary look at second quarter demand, the company is updating its full year sales guidance to a range of negative 2 percent growth to positive 2 percent (previous guidance was flat to up 4 percent). This sales range yields earnings guidance of $1.05 to $1.20 per share for the full year (previously $1.15 to $1.30).
Standard & Poor's Ratings Services said that there would be no effect on the ratings or outlook on Leggett & Platt Inc. (A+/Stable/A-1) following the company's announcement that earnings for the second quarter will be below its previous guidance. Standard & Poor's expects that the company will maintain credit measures appropriate for the rating.
