Tempur-Pedic Q3 Sales off 9%

October 23, 2012  by in UnCategorized   

By Home Furnishings Business in Bedding on October 24, 2012

Mattress vendor Tempur-Pedic International (NYSE: TPX) reported third-quarter 2012 net sales of $347.9 million, off 9 percent from the same prior-year period.

Net sales in the North American segment decreased 14 percent, and international segment net sales increased 3 percent. Tempur-Pedic, Lexington, Ky., had a net loss of $2 million, adjusted to income of $42.3 million to reflect the tax provision recorded in connection with the anticipated repatriation of foreign earnings together with certain transaction costs related to the proposed Sealy acquisition, for the period ended Sept. 30, compared with net income of $61.9 million in third-quarter 2011.

Mattress sales decreased 11 percent globally in the third quarter of 2012, down 15 percent in the North American segment and up 1 percent in the International segment. On a constant currency basis, International mattress sales increased 10 percent.

Operating income in the third quarter of 2012 included $3.6 million of transaction costs related to the proposed Sealy acquisition, as well as a benefit of $8 million related to an  adjustment to long-term incentive stock compensation following a re-evaluation of the probability of meeting certain related required financial metrics.

"Changes in the competitive environment that we experienced during the second quarter in North America continued to have an adverse impact on our third quarter performance," said CEO Mark Sarvary. "We recently launched a broad series of new initiatives in response to the new competitive landscape in North America, and while it remains early, we are seeing some stabilization as a result. The initiatives are more expensive than we initially estimated, however we are committed to returning to growth.  Internationally, our third quarter results reflect a softening in demand due to macroeconomic weakness in Europe. We remain very confident in our Company's growth potential and our strong brand, and are very excited about our proposed combination with Sealy Corporation. Together, Tempur and Sealy will have a portfolio of highly complementary brands, products, technologies, and geographic footprints that provides a platform for growth."

Tempur-Pedic is lowering its outlook for full year 2012 net sales to approximately $1.4 billion. The company currently expects 2012 adjusted earnings per share of approximately $2.55.