Company News
November 3, 2025
Urethane Highlights from Stepan Investors Call
Stepan Company (SCL) Q3 2025 Earnings Call Transcript
Oct. 29, 2025 2:06 PM ETStepan Company (SCL) StockSCL
Q3: 2025-10-29 Earnings Summary
EPS of $0.48 misses by $0.14
| Revenue of $590.28M (7.94% Y/Y) misses by $3.37M
Stepan Company (SCL) Q3 2025 Earnings Call October 29, 2025 9:00 AM EDT
Company Participants
Ruben Velasquez – VP & Chief Financial Officer
Luis Rojo – President, CEO & Director
Luis Rojo
President, CEO & Director
Thank you, Ruben. Good morning, and thank you all for joining us today to discuss our third quarter 2025 results. I plan to share highlights of the quarterly performance and we will also share updates on our key strategic priorities, while Ruben will provide additional details on our financial results.
We delivered 9% adjusted EBITDA growth through the first 9 months of 2025, bringing year-to-date adjusted EBITDA to $165 million.
These results were restrained by the significant increase in oleochemical raw material prices, which continues to impact Surfactant margins and by higher start-up costs related to our new Pasadena, Texas facility.
We remain focused on gradually recovering our margins and keeping a healthy balance between volumes and margins. Third quarter adjusted EBITDA was $56 million, up 6% year-on-year.
Specialty Products adjusted EBITDA increased significantly, driven by favorable order timing within the pharmaceutical business.
Polymers delivered volume growth across rigid polyols and commodity PA, while EBITDA was slightly lower due to unfavorable mix and margin pressures.
Surfactant adjusted EBITDA declined versus the prior year, driven by higher Pasadena start-up costs, oleochemical raw material cost inflation and lower demand within our global commodity consumer products end market.
Total company sales volumes grew 1%, with Polymers up 8% and our NCT product line up 26%, while Surfactants volume declined 2%. In Surfactants, we continue to experience double-digit volume growth within the crop productivity business and mid-single-digit growth in the oilfield end market.
This growth was offset by lower demand within the global commodity consumer products end market. North America Rigid Polyol and commodity PA volumes were both up double digits, while European Rigid Polyol volumes continue to be impacted by macroeconomic uncertainties and low construction activity.
Despite a very challenging environment for the chemical sector, we remain encouraged by the volume growth across several of our key strategic end markets.
We finished the third quarter of 2025 with $10.9 million of adjusted net income, down 54% versus the prior year, largely reflecting a higher effective tax rate, higher interest net and higher depreciation, none of which had cash impact.
Free cash flow was positive at $40 million during the quarter, driven by reduced working capital and disciplined capital spending. During the third quarter of 2025, the company paid $8.7 million in dividends to shareholders.
Ruben Velasquez
VP & Chief Financial Officer
This was partially offset by improved product and customer mix. Moving to Slide 8, Polymers net sales were $143.9 million for the quarter, a 4% decrease versus the prior year.
Selling prices decreased 14%, primarily due to the pass-through of lower raw material costs and competitive pressures. Sales volume increased 8% in the quarter.
North America Rigid Polyol volume grew double digits and our commodity Phthalic Anhydride business continued to deliver strong growth.
Global Specialty Polyols volume grew mid-single digits despite the continued challenging overall environment.
European and China Rigid Polyols volume was impacted by softer demand across their respective regional end markets.
Luis Rojo
President, CEO & Director
Thank you, Ruben. I will focus my comments on our strategic priorities. Our customer will always remain at the center of our strategy and innovation efforts.
Our Tier 1 customer base remains a solid foundation of our business. Continuing our new customer acquisition within Tier 2 and Tier 3 customers remains a key priority. This is an important and profitable growth channel within our Surfactant business. For the third quarter of 2025, our volume grew low single digits year-over-year, and we added over 350 new customers.
Our end market diversification strategy remains a key focus area. For the third quarter, we continue to see a strong growth in our crop productivity and oilfield businesses. We are pleased to see our North America Rigid Polyol business continue to deliver year-over-year growth.
This growth was enhanced by our new product introduction in the growing spray-foam end market. Our supply chain operation and resiliency continue to improve, and we delivered another solid quarter in all our key operational metrics.
Michael Harrison
Seaport Research Partners
All right. And then over on the Polymers business, just a couple of questions here. First of all, do you believe that there is pent-up demand in the commercial roofing and commercial insulation space? And I’m curious, do you think that lower interest rates could help to stimulate some additional activity there?
Luis Rojo
President, CEO & Director
[ Fully aligned ] Mike. There is — we believe there is a lot of pent-up demand from all the construction that happened in the early 2000. I mean if you look at all the construction that happens in industrial construction, warehousing, plants, flat roofs in early 2000, which was a huge peak a lot of those buildings need renovation in the next 5 years.
We’re aligned 100% with the belief from some of our customers that all that reroofing needs to happen. It’s not going to happen overnight, but it needs to happen and PIR insulation is the preferred choice for all those flat roof projects coming up.
And you are 100% right that, I mean, we should see another interest rate reduction today, 98% probabilities now of an interest rate reduction in December Fed meeting.
So we believe 2026 will give us some upside on the construction activity if the interest rate continues the way they are and inflation rates continues the way they are, right? I mean we need shelter and rental inflation to keep coming down so we can achieve — so the Fed can achieve their 2% inflation target.
Michael Harrison
Seaport Research Partners
All right. And just to follow up on Polymers. From the margin side, I believe you mentioned that unit margins are down, the pricing was down quite a bit. You referred to some competitive dynamics that are challenging. Is your expectation that if we started to see some recovery in demand that we would also see some recovery in unit margins as well?
Luis Rojo
President, CEO & Director
Look, I mean, we’re happy — look, we always can improve our margins, right? But if you look at the first 9 months of the Polymers business, we were able to grow EBITDA modestly, very little, but modestly, we were able to grow despite sales down. So EBITDA margins are improving slightly in the Polymers business despite everything that is going on in Europe and especially in Europe, which is a very tough situation.
So we believe we want to grow the top line. We want to grow the volumes, and we need to keep inching up the margins as we drive scale. I mean, the benefit of higher volumes and scale should improve our margins, but we are not planning a significant increase. But we’re happy with the margins that we have, and we need to continue inching those up as we grow our business. And we had a negative impact on margin as we grow PA and as we grow in some of the other markets because those are typically a mix impact to the overall Polymers business.
David Storms
Stonegate Capital Partners, Inc., Research Division
I wanted to start, you mentioned on the call, spray foam has really been a nice driver for you in the Poly section. Could we — I guess my question is, how much more room for growth do you think there is there? And could we maybe see a second wave of growth if the European environment improves?
Luis Rojo
President, CEO & Director
Great question, Dave. Look, we have talked about spray foam in the past few quarters. We’re serious about this end market. We have developed great technologies and products to serve the high-growth margin, and we started this year. So I’m pleased with what the team has delivered and with the benefits that we are starting to get.
This is very early. And it’s a good market. It’s a good market that has a lot of potential to grow not only in the U.S., eventually in Europe in the future. But we are happy with our participation, and we need to grow more share. We are starting. We are starting from almost 0 share, and we are committed to continue investing and developing this business. And when you think about Europe, of course, we had higher expectations of our European region to start growing more on the construction activity.
And when you think about the war in Ukraine and all of those things, the reality is that construction activities are very muted still in the European region. Now as interest rates come down, as they keep focusing on energy conservation, which is a huge issue in Europe and the biggest opportunity is to consume — is to reduce the consumption of energies in the buildings. So we believe the market trends are there for the future. It’s not going to happen in the short term for sure. But we believe this is a good industry for the next 3 and 5 years, and we are committed to continue investing and to continue growing our European Polymers business.
https://seekingalpha.com/article/4834892-stepan-company-scl-q3-2025-earnings-call-transcript
October 30, 2025
Covestro Update
Covestro trims full-year guidance, says ADNOC deal on track to close in Q4
October 30, 20253:06 AM EDTUpdated 6 hours ago
Covestro AGOct 30 (Reuters) – German chemicals maker Covestro (narrowed its full-year core profit forecast on Thursday due to soft demand, but said its financial stability would be secured as the $17 billion takeover by Abu Dhabi state oil firm ADNOC is set to close in the fourth quarter.
Covestro, which had already cut its outlook twice this year, now sees its yearly earnings before interest, taxes, depreciation and amortization between 700 million and 800 million euros ($816 million and $933 million). Its previous forecast was for the EBITDA to come in a range of 700 million to 1.1 billion euros.
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The company, whose products include foam chemicals used in mattresses, car seats and insulation for buildings, had said earlier this year that the prospect of higher U.S. tariffs was leading to a huge oversupply of products to the market there, particularly from the Asia-Pacific region, which had then caused a big drop in prices.
Covestro also said on Thursday that a fire at an external substation in Dormagen, Germany would have a negative impact in a low three-digit million euro range for the full year.
Its third-quarter EBITDA fell 15.7% to 242 million euros, beating an analysts’ average estimate of 183 million euros in a company-provided consensus.
CLOSING OF ADNOC’S TAKEOVER ON TARGET
Regulatory approvals for the takeover by ADNOC, currently being examined by the European Commission, are progressing as expected and the deal is on track for closing in the final quarter of the year, the company said.
The EU regulator was concerned that ADNOC, in its biggest acquisition yet and one of the largest foreign takeovers of an EU company by a Gulf state, may be using state subsidies to acquire the chemicals company.
($1 = 0.8575 euros)
Reporting by Bartosz Dabrowski in Gdansk, editing by Milla Nissi-Prussak
October 29, 2025
Epoxy Highlights from Olin Investors Call
Olin Corporation (OLN) Q3 2025 Earnings Call Transcript
Oct. 28, 2025 3:01 PM ETOlin Corporation (OLN) StockOLN
Q3: 2025-10-27 Earnings Summary
EPS of $0.39 beats by $0.30
| Revenue of $1.71B (7.78% Y/Y) misses by $18.08M
Olin Corporation (OLN) Q3 2025 Earnings Call October 28, 2025 9:00 AM EDT
Company Participants
Steve Keenan – Director of Investor Relations
Kenneth Lane – President, CEO & Director
Todd Slater – Senior VP & CFO
Kenneth Lane
President, CEO & Director
Thank you, Steve, and thanks to everyone for joining us today. Let’s start with Slide 3 and our third quarter highlights. During the third quarter, we delivered robust results, reflecting strong performance in our Chlor Alkali products and Vinyls business, partially offset by ongoing weakness in our Epoxy and Winchester commercial ammunition businesses. We remain disciplined in our value-first commercial approach and operated our assets safely, reliably and efficiently.
Team Olin is more committed than ever to executing our value-first commercial strategy, maximizing cash generation and delivering on our capital allocation priorities while preserving our strong leverage to a demand recovery. During the third quarter, we continued to generate positive operating cash flow and with a focused effort by Team Olin achieved a significant milestone by securing our eligibility for Section 45V clean hydrogen production tax credits, which Todd will discuss shortly.
Now let’s turn to Slide 5 for a look at our Epoxy results. Global Epoxy resin demand remains weak, and we continue to face significant headwinds in both Europe and the U.S. regions, facing subsidized imported resin from Asian producers. U.S. demand has been more resilient than Europe. And with the removal of Epoxy resins from Annex II tariff exemptions, we are seeing traction with U.S. price increases. In spite of these market dynamics, Olin’s third quarter formulated solutions volume improved sequentially.
Fourth quarter planned maintenance presents a $14 million sequential headwind to Epoxy earnings. As we execute this turnaround safely and efficiently, the Epoxy team will focus on cash management as they reduce year-end inventories. Olin’s new Stade, Germany supply agreement will provide improved economics for our European production, similar to the benefits from our integrated operations at Freeport.
Starting in January 2026, the new agreement is expected to provide an annual adjusted EBITDA benefit of approximately $40 million. With rationalization of capacity in Europe, we are seeing opportunities to grow our participation and we’ll do so at a value that is attractive.
Todd Slater
Senior VP & CFO
Our Epoxy business continued to grow its formulated solutions volume as persistent headwinds from subsidized Asian imports impacted both the United States and European markets. As expected, Epoxy’s third quarter results included higher operating costs from unabsorbed fixed manufacturing expenses incurred from planned inventory reductions.
Kenneth Lane
President, CEO & Director
Thanks, Todd. Let’s finish up with Slide 9 and our outlook for the fourth quarter. In our CAPV business, through actions we’re taking, we expect to see stable ECU values in the face of seasonally weaker demand. Our Epoxy business remains challenged, but will begin to see improvement as we enter the new year and benefits accrue from our new Stade supply agreement, some pricing improvements in the U.S. market and volume gains in Europe following capacity rationalizations.
Patrick Cunningham
Citigroup Inc., Research Division
Maybe just on Epoxy. Obviously, still continues to be challenged by some price competitive Asian imports. Maybe you’re getting a little protection here that gives you a platform for price. But how should we think about earnings levels into next year? You have some nice savings actions at Stade. You have maybe some incremental volume opportunities with competitors leaving the space in Europe. So I’m just how are you thinking about the framework for next year on Epoxy?
Kenneth Lane
President, CEO & Director
Patrick, thank you for your question. I hate to get too far out over my skis here, but I’m probably more optimistic on Epoxy than I have been in the last 1.5 years. But that’s not because the market is improving. It’s really because of the actions that we’ve taken as Olin over the last few years to be able to rightsize our cost base, rightsize our capacities. We do have a very good integrated business that has allowed us to survive when others can’t. And so that’s what happens in the trough. You start to see people that are not as competitive close capacity until demand begins to recover, and we’re positioned very well as that happens.
But in the meantime, with all the cost reductions that we’re going to realize, both in Europe and frankly, in the U.S., along with a little bit of a tailwind around tariffs, I do expect that going into next year, we’re going to see a pretty significant improvement from a very low level for Epoxy. But I think that’s a business where, yes, I’m going to be very eager to see that improvement next year, which should be quite positive versus this year. And as a percentage, will probably be better than any other business we’ve got.
October 29, 2025
Urethane Highlights from BASF Investors Call
BASF SE (BASFY) Q3 2025 Earnings Call Transcript
Oct. 29, 2025 6:11 AM ETBASF SE (BASFY) Stock, BFFAF StockBASFY, BFFAF
BASF SE (OTCQX:BASFY) Q3 2025 Earnings Call October 29, 2025 3:30 AM EDT
Company Participants
Stefanie Wettberg – Senior Vice President of Investor Relations
Markus Kamieth – CEO & Chairman of the Board of Executive Directors
Dirk Elvermann – Member of the Board of Executive Directors, CFO & Chief Digital Officer
Markus Kamieth
CEO & Chairman of the Board of Executive Directors
Yes. Thank you, Stefie. Good morning, everyone. Dirk and I welcome you to our Q3 conference call. In the third quarter of 2025, market dynamics for the chemical industry continued to be challenging. Upstream margins were still under pressure and customer buying behavior in almost all industries and regions remained cautious. Even in this demanding environment, BASF earnings came in slightly above market expectations and only slightly below the level of the prior year quarter.
Let’s start with a closer look at the sales performance of BASF Group compared with the prior year quarter. Overall, sales declined slightly on account of strong currency headwinds and lower prices. We were, however, able to achieve slightly higher volumes due to growth in the Surface Technologies, Chemicals and Materials segments.
From a regional perspective, we recorded 12% volume growth in China, slightly — slight volume growth in South America and fairly flat volume development in Europe. In North America, volumes were slightly down.
Compared with the prior year quarter, prices declined in 4 out of our 6 segments, particularly in Chemicals. In the Surface Technologies and Nutrition & Care segments, we managed to achieve price increases. Currency effects dampened sales in all divisions and were mainly related to the strong depreciation of the U.S. dollar, Chinese RMB and the Indian rupee. Portfolio effects slightly supported sales growth. Reflecting this underlying sales development, EBITDA before special items came in at over EUR 1.5 billion compared with EUR 1.6 billion in the prior year quarter.
Here is a snapshot of how the markets and our segments’ volumes and specific margins developed in the third quarter. Due to a continued imbalance between supply and demand and the resulting pressure on margins, the business environment in our upstream segments remained challenging. Despite these market headwinds, the Chemicals segment achieved solid volume growth in both divisions. However, the segment faced significantly lower prices and sharply reduced specific margins.
The Materials segment recorded slightly higher volumes despite the difficult market environment due to higher volumes in Monomers and stable volume development in Performance Materials. Prices declined in both divisions. However, our overall margins in the segments were lower driven by the Monomers division.
I will now give a short update on our Verbund side in South China. Let me begin with what we communicated at the recent Capital Market Update in Antwerp. We will complete this mega project with capital expenditures around EUR 1.3 billion lower than originally planned. We achieved this CapEx reduction through tight budgetary discipline, scope changes and excellence in procurement.
As a result of the currently long markets in China, we will have a slower-than-anticipated ramp-up of the overall earnings contributions. In the coming years, we expect most markets and value chains to rebalance. We, therefore, confirm the targeted EBITDA before special items of EUR 1 billion to EUR 1.2 billion by 2030.
Now this slide illustrates the impressive progress the Zhanjiang team has achieved since May. This includes the successful mechanical completion of the steam cracker and downstream petrochemical plants. The infrastructure and utility plants are already in steady operation. Additionally, we have safely and successfully started up various downstream plants, including butyl acrylate, 2-ethylhexyl acrylate, formaldehyde, neopentyl glycol and glacial acrylic acids with more start-ups to come. Thus, we are transitioning the project from construction to operational readiness. These achievements mark steady progress towards the site’s full operational start-up at the end of 2025.
October 29, 2025
Urethane Highlights from L&P Investors Call
Leggett & Platt, Incorporated (LEG) Q3 2025 Earnings Call Transcript
Oct. 28, 2025 2:41 PM ETLeggett & Platt, Incorporated (LEG) StockLEG
Q3: 2025-10-27 Earnings Summary
EPS of $0.29 beats by $0.00
| Revenue of $1.04B (-5.93% Y/Y) beats by $11.07M
Leggett & Platt, Incorporated (LEG) Q3 2025 Earnings Call October 28, 2025 8:30 AM EDT
Company Participants
Steve West – Vice President of Investor Relations
Karl Glassman – President, CEO & Chairman
Benjamin Burns – Executive VP & CFO
J. Hagale – Executive VP & President of Bedding Products
R. Smith – EVP, President of the Furniture, Flooring & Textile Products and President of Specialized Products
Karl Glassman
President, CEO & Chairman
Thank you, Steve, and good morning, everyone. I’m pleased with another quarter of solid results, reflecting nearly 2 years of disciplined cost structure improvements despite an ongoing soft demand in residential end markets. Importantly, we are reaffirming the midpoint of our full year sales and adjusted EPS guidance, which Ben will discuss in more detail later.
Our third quarter was also marked by significant progress on our key strategic initiatives. Our team has done a terrific job driving results through the execution of our restructuring plan, disciplined cost management and improving operational execution. These efforts have culminated in improved cash flow, which allowed us to significantly strengthen our balance sheet. On August 29, we completed the divestiture of our Aerospace business, aligned with our goal of optimizing our portfolio. We used proceeds from the sale, along with a portion of our operating cash flow to pay down all of our remaining commercial paper and substantially lower our net debt to trailing 12-month adjusted EBITDA ratio.
Our restructuring plan is nearing completion and is meeting or exceeding our initial expectations. We made considerable progress on the second phase of the flooring consolidation during the quarter and expect the consolidation to be completed by the end of the year. In Hydraulic Cylinders, we completed the rightsizing of our U.K. facility.
Beyond our formal restructuring plan, in early September, we announced the consolidation of our Kentucky adjustable bed manufacturing operation, which will be consolidated into our Mexico operation by the end of this year. This decision was driven by lower volume and tariffs on imported components, which resulted in a cost disadvantage for our domestic production in a category that primarily competes with imported products.
Throughout the quarter, we continued to navigate a very dynamic environment. We still believe tariffs will be a net positive for us, but remain concerned that wide-ranging tariffs could drive inflation, hurt consumer confidence and pressure consumer demand. We are actively mitigating some of the negative impacts experienced in a few of our businesses, such as supply chain disruptions that can have an indirect impact on us and our customer demand disruptions. Our teams are actively engaged with customers and suppliers across our global footprint to reduce tariff exposure and minimize impacts.
In general, import issues are an ongoing risk, especially for our Bedding Products segment, but we are encouraged that some recent enforcement actions support fair competition for domestic manufacturers and importers alike. U.S. Customs and Border Patrol recently dismantled a Chinese mattress transshipment scheme estimated to have evaded more than $400 million in duties. The Consumer Product Safety Commission has also recently issued recalls and product safety warnings for certain imported mattresses that fail mandated U.S. flammability standards.
Now more than ever, misclassification of shipments and understated product values are additional problems that domestic manufacturers face when competing against imports. While we continue to believe that imports have a role in the U.S. bedding market, the domestic industry must be able to compete on a level playing field. Amid these initiatives and macroeconomic challenges, our teams remain focused on providing high-quality innovative products to our customers, keeping our employees safe and continuously improving at everything we do. I’ll now turn the call over to Ben.
Benjamin Burns
Executive VP & CFO
Thank you, Karl, and good morning, everyone. Third quarter sales were just over $1 billion, down 6% year-over-year due primarily to continued soft demand in residential end markets as well as sales attrition from both the divestiture of our aerospace business and our restructuring efforts.
Looking at sales by segment, Bedding product sales decreased 10% year-over-year but improved 3% sequentially versus the second quarter and sales accelerated through the quarter. Specialized product sales declined 7%, while Furniture, Flooring and Textile product sales were flat year-over-year. In Bedding Products, as anticipated, sales weakness at a certain customer and retailer merchandising changes drove volume declines in adjustable bed and specialty foam. U.S. spring unit volume was in line with both mattress consumption and domestic mattress production volumes, both of which we estimate declined low single digits.
U.S. mattress industry production improved sequentially versus the second quarter, marking the second consecutive quarter of improved domestic production volume. While we are encouraged to see sequential improvement, third quarter domestic volume remained negative year-over-year. It is worth noting that the improvements we have seen are not consistent across the industry. Certain channels and market participants are performing better than others. We have also started to see stabilization in demand patterns between holiday promotional periods.
In the fourth quarter, we expect U.S. domestic mattress production to slow sequentially due to normal seasonality and to remain negative on a year-over-year basis. Total market consumption for the full year is now expected to decline low single digits with domestic production down mid- to high single digits. Within our Specialized Products segment, we experienced modest sales declines in automotive and hydraulic cylinders with the divestiture of Aerospace making up the largest sales drag during the quarter. Looking ahead, multiple global automotive supply chain risks such as availability of aluminium, certain semiconductors and access to rare earth minerals have materialized as we moved into the fourth quarter and has begun impacting both the industry and our business. However, we have experienced no material impact to date.
Finally, within Furniture, Flooring and Textiles, continued sales growth in textiles and Work Furniture was offset by declines in home furniture and flooring. We anticipate continued year-over-year strength in the geo-component side of our textiles business, while current trends and seasonality will likely continue in the other businesses within the segment through the remainder of the year.
Susan Maklari
Goldman Sachs Group, Inc., Research Division
Yes. Okay. That’s great color, Ben. And then I want to turn to Bedding. Can you talk about the demand environment and how that came through during the quarter? I think you said that you did see things improve each month in the third quarter. But it seems like that’s coming despite the headwinds that we are seeing in the housing market and the volatility in consumer confidence. How do we sort of weigh those different factors out there? And can you just talk a bit about what you think is actually going on out on the ground?
Karl Glassman
President, CEO & Chairman
Susan, thanks for the question. Before we go down that path, though, I’m going to turn it over to Tyson, but I want to stop for just a second and congratulate Tyson and his team for the tremendous job that they’ve done in the Bedding segment. The restructuring has been a challenge, the demand headwinds. The team has come together. We have an innovation pipeline that is more robust than it’s ever been in our history. And when you think of — they still have issues, Tyson will be very candid on these issues regarding specialty foam and adjustable bed. But when you look at the financials, you can see to your earlier question, the restructuring benefits, you can see cost management, operational efficiency improvements, metal margin expansion through the trade sale of trade rods. And like I said, the early in the year, we talked about the benefit of customer product launches. We’re seeing that. It’s ramping up. But most notable is what the teams have coming into the near future. 2026 is going to be really robust from innovation, evidence of our team’s capabilities. So with all of that, Tyson, why don’t you go ahead?
J. Hagale
Executive VP & President of Bedding Products
Sure. And thanks, Karl. Susan, I’ll start just with some comments about the market. And I think we would characterize things right now as more stable than seeing a lot of recovery, although in both the second and third quarter, Ben mentioned this, but we saw sequential improvement in both quarters, which was coming off a pretty tough first quarter, but still that’s a trend we haven’t seen in quite some time. But really, it’s getting us back to more of a stable place, but still in the third quarter, especially looking at the domestic market, down low single digits when we talk about units.
A few things, though, that I think are worth mentioning. Kind of within that stability, first of all, we’ve talked about this in some past calls that we see some pretty high peaks when we get to the promotional holidays and then some pretty tough valleys when we come off of those. But we’re seeing more stability month-to-month. So we see some improvement around the promotions, but we don’t see quite the big drop-offs, which I think is notable and something we’ll continue to watch.
The other thing is that although things are reaching more of a stable level, we don’t see consistent performance across all retail channels and brands. It is pretty choppy. And from our view, that’s coming from a variety of factors with industry consolidation that’s been going on, new program launches, advertising changes. All of those things are resulting in a lot of movement, which makes it a little more difficult to track exactly what’s going on, but I think that’s another thing we’ll watch going forward.
But big picture, I think we still have to continue to watch it. You mentioned it, Susan, but the big macro factors that tend to drive bedding and furniture are still a pretty big challenge. Karl talked about this, too, the consumer is dealing with a tariff environment, but still pretty tough housing, wages dealing with inflation and just general consumer confidence. Those are all big picture things that for us to plan for an actual more recovery type environment, we have to see those things start to flip to be more positive.
Robert Griffin
Raymond James & Associates, Inc., Research Division
This is Alessandra Jimenez on for Bobby. First, I just wanted to touch on kind of the growth opportunity for here — from here. Now that the majority of restructuring is near complete, where do you see the most opportunities for organic growth, assuming the macro environment is supportive?
Karl Glassman
President, CEO & Chairman
Well, longer term, I’m going to surprise you a little bit. I appreciate the question. Longer term, I see our largest growth opportunity probably in finished bedding. It’s a long tail to sell that product through, but we’re gaining momentum. We’re replacing some lost volume. So again, I’m not calling this being a fourth quarter or first half of next year even. But longer term, that private label work that we’re doing on finished bedding, I think will reap significant benefit.
J. Hagale
Executive VP & President of Bedding Products
And this is Tyson. I agree with Karl. The private label finished mattress opportunity, especially with where we’ve seen the biggest volume declines in our bedding business, but also as we see consumers get more confident in returning to bedding and furniture products, Karl referenced this in his opening comments, but some of the investments that we’re seeing in innovation and giving consumers a reason to come back and do some shopping, we feel pretty good about those right now. And this is purely anecdotal. There’s not a lot of data to support it, but just seeing the workload that our teams have right now in bedding, they are really busy working with our customers right now. And at least from a feel standpoint or gut, it seems like this is as busy as we’ve been working on new product development since at least the start of the pandemic. I mean, since then, it’s been a lot of VA/VE or just trying to spec products to replace things in the supply chain, but we’re seeing more activity around getting new products into the market, which hopefully is a signal of our customers getting ready to put more products on retail floors.
Karl Glassman
President, CEO & Chairman
Keith, if you don’t mind, Tyson, while we’re on that subject, much has been written about lost market share. Talk about that, if you don’t mind.
J. Hagale
Executive VP & President of Bedding Products
Well, and I think a lot of that comes from the moving pieces with the imported finished mattresses and how much are actually being consumed within the course of the year. It’s been a tough thing to track, but we’re seeing more stability with the imported finished mattresses, especially after some of those things were loaded up in the first part of the year ahead of tariffs. So it’s a little easier to get a view of that now, Karl. But on top of that, we’ve seen some different moves with some of the brands and industry consolidation, but that’s where we feel at least from the U.S. Spring point of view.
Keith Hughes
Truist Securities, Inc., Research Division
And if you look at adjustable and specialty, I know there’s a customer issue. When do you lap that, when will that start to look more like a chance to do better than the industry or like the industry?
J. Hagale
Executive VP & President of Bedding Products
Yes, Keith. So it is a consistent commentary from what we shared last quarter. I’ll talk just a little bit more about it. It’s largely 2 customers, and they’re the same ones for specialty foam and adjustable bed. The first one is Mattress Firm. And once the consolidation has been complete, with specialty foam, there was a private label mattress program that was taken internal. And then second to that, with our adjustable bed business, we still sell some product there, but we’ve seen a change in the merchandising plan and where some of the sourcing of that product is coming. So those have been both impactful to both specialty foam and adjustable bed. And it will really take fully through next year before we’ll fully get through that part of it. The second big challenge again for both businesses is not a market share loss, but it’s more just of a headwind of a large customer of ours that impacts both foam and adjustable bed. Now it’s hard to say exactly when we anniversary those because it’s more of just a specific customer challenge, but not lost market share.
Keith Hughes
Truist Securities, Inc., Research Division
Okay. And I think it was Karl, your commentary on the sector, you were seeing some retail do better than others. Could you talk about that a little bit more of what type of retail is seeing some at least sequential improvement? I was still down year-over-year? And what areas are still struggling?
Karl Glassman
President, CEO & Chairman
Yes, that was actually Tyson. Go ahead, Tyson.
J. Hagale
Executive VP & President of Bedding Products
Sure, Keith. Well, it’s probably what you would suspect. On the online channel, see quite a bit of strength in some of the lower-end online e-commerce. There’s a lot of volume moving through there. In brick-and-mortar, see quite a bit of activity happening in big box and through Mattress Firm. But it’s not as we’ve kind of talked about here, it doesn’t seem to be a rising tide lifting everybody at the same level. It is inconsistent, but see stronger unit volumes at least through those channels.
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