Q3 Sales up 9.4% for Sealy

September 26, 2012  by in UnCategorized   

By Home Furnishings Business in Financial Reports on September 27, 2012

Bedding major Sealy Corp. (NYSE: ZZ) reported third-quarter 2012 sales of $365 million, a 9.4% increase over the prior-year period.

Total U.S. net sales increased 11.2 percent to $286.2 million from the third quarter of fiscal 2011. International net sales increased $2.5 million, or 3.2 percent, from the third quarter of fiscal 2011 to $79.2 million. This increase was primarily due to increased sales in Mexico and Argentina partially offset by lower sales in Canada. In Canada, local currency sales increases of 1.2 percent translated into decreases of 3.2 percent in U.S. dollars due to a weaker Canadian dollar. Local currency sales performance in Canada was driven by a 3.8 percent increase in average unit selling price, offset by a 2.5 percent decrease in unit volume.

Income from operations for the third quarter of fiscal 2012 decreased 13.8 percent, or $5.2 million, to $32.6 million. This year's results included $6.6 million of higher national advertising costs, which primarily related to the rollout of our Optimum by Sealy Posturepedic line as well as higher compensation related expense.

Net income from continuing operations for the third quarter was $0.1 million.

Net sales for the nine months ended August 26 increased 3 percent to $989.8 million from $960.9 million for the comparable period a year earlier. Net income from continuing operations was $4.5 million, versus net income from continuing operations of $8.4 million in the prior-year period.

During the fourth quarter of 2010, the company divested the assets of its manufacturing operations in France and Italy, which represented all of the assets in its Europe segment. In addition, the company discontinued manufacturing operations in Brazil. The company has transitioned to a license arrangement with third parties in both of these markets. These businesses are accounted for as discontinued operations, and accordingly, the company has reclassified its financial data for all periods presented to reflect these actions. Unless otherwise noted, the reported financial data pertains to Sealy's continuing operations.

Sealy, Trinity, N.C., had planned to host a conference call this afternoon to discuss third-quarter results, but cancelled that call due to the transaction announcement with Tempur-Pedic International.