Leggett & Platt (LEG) saw its stock price soar 6.21% in pre-market trading on Tuesday, following the release of its third-quarter financial results. Despite a 6% decline in sales, investors appeared to focus on the company's improved financial position and cash flow management.

The company reported a significant reduction in debt, cutting $296 million in the third quarter alone, bringing its total debt down to $1.5 billion. This move strengthened Leggett & Platt's balance sheet, with total liquidity reaching $974 million, including $461 million in cash on hand. The improved financial position seems to have overshadowed the sales decline, as the company's net debt now stands at 2.6 times trailing 12-month adjusted EBITDA.

While Leggett & Platt's third-quarter sales fell 6% to $1.036 billion compared to the same period last year, the company managed to slightly improve its adjusted EBIT margin to 7.0%. Additionally, operating cash flow for the quarter increased by $30 million year-over-year, reaching $126 million. The company also reaffirmed its 2025 sales guidance of $4.0-$4.1 billion and projected operating cash flow of approximately $300 million, indicating confidence in its financial outlook despite current market challenges.