Sealy's 3Q Sales Dip Slightly

September 28, 2010  by in UnCategorized   

By Home Furnishings Business in Bedding on September 29, 2010

Bedding's largest vendor, Sealy (NYSE: ZZ) announced on Tuesday third-quarter 2010 sales of $346.2 million, a decrease of 1 percent compared with a year ago.

Sealy, Trinity, N.C., recorded a $15.8 million net loss for the third quarter. Excluding a non-cash, impairment charge of $23 million related to a write down of the assets of the company's European segment to their fair market value, net income for the period would have been $7.1 million.

"While our third quarter results reflect the inconsistent industry demand and on-going pressures in the overall macroeconomic and retail environment, we remain focused on actions within our control to drive our future performance, said Larry Rogers, president and CEO, said in an announcement of Sealy's performance. "In light of this challenging marketplace, we are actively working with our retail partners to execute promotions that will bring the consumer back into their stores, while continuing to make investments in new product rollouts and new product development to drive future sales growth.

"The Sealy Promotional line has now been fully rolled out and the specialty Embody line rollout will be completed in Q4. While we would like to have had both rollouts completed faster, both lines are now performing better than their predecessors and have shown improvement from the beginning to the end of the quarter. In addition, our 2009 Stearns & Foster line continues to deliver strong growth. Lastly, we are excited by the progress made on our Next Generation Posturepedic line, which remains on track for a January 2011 launch."

Through fiscal 2010's first nine months, Sealy's sales rose 4.6 percent from the same period a year ago to $1,002.3 million. The net loss for the period was $9.3 million. Excluding the non-cash impairment discussed above, the company's net income for the period would have been $13.7 million, versus $11 million in the prior year period.

Sealy also announced that Deborah G. Ellinger and John B. Replogle have been appointed as independent directors to the company's Board. In addition, the Company appointed Larry Rogers, president and CEO of Sealy Corp., to the Board of Directors. The company also announced that Matthew W. King has agreed to step down as a member of the Board of Directors.

"The Board is pleased to recognize Larry Rogers' leadership and significant contributions to Sealy with his election to the board," said Paul Norris, Sealy's non-executive chairman.

As a result of these decisions, the Board now consists of a majority of independent directors. These changes follow the company's previously announced plan to have a majority-independent Board of Directors to comply with the New York Stock Exchange's transition rules for a company which is no longer a "controlled company".

"We are pleased to welcome Deborah and John to our Board," Rogers said. "Their vast wealth of knowledge and expertise with marketing related experiences in the retail environment will be of immense benefit as we continue to grow and introduce new products. As a new Director myself, I look forward to working together with Deborah, John and the other talented members of our Board to develop fresh and exciting strategies that will help us achieve our goals in the coming years."

Ellinger is currently an advisor to Catterton Partners, with whom she has worked since 2004. Replogle is CEO of Burt's Bees Inc., a position he has held since January 2006.