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From Home Furnishing Business

North American Bedding Drives Sales, Profit Hikes at Tempur Sealy

Bedding major Tempur Sealy International (NYSE: TPX) recorded a fourth-quarter profit of $63.4 million or $1.12 per share as sales crept up 0.3%.

The black ink reversed a net loss of $11.3 million or 18 cents per share in the 2015 fourth quarter, which included a one-time charge of $60.7 million to settle a tax dispute with the government of Denmark.

The company said the most recent quarter’s sales of $769.5 million was driven by its North American bedding business, which had sales of $589.6 million, up 2.6% from the comparable quarter. International bedding sales fell 6.8% to $115.9 million.

“Overall, the worldwide markets for our products are solid and the team remains focused on our long-term initiatives,” said Scott Thompson, chairman and CEO. “Our fourth-quarter adjusted EPS growth of 19% is evidence of the strength of the company’s brands and business model, even against a relatively muted bedding industry.”

For the 2016 calendar year, sales fell 0.8% to $3.13 billion, and the company recorded net income of $202.1 million or $3.38 per share. That was up from net income of $73.5 million or $1.17 per share in 2015.

Tempur Sealy didn’t issue sales or earnings forecasts for 2017, but did project adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $400 million to $450 million. In 2016, adjusted EBITDA totaled $137.9 million.

The company said the recent termination of its contract with Mattress Firm, its largest customer, and several other factors make it “unable to predict with a reasonable degree of certainty” its net income for 2017, but noted these factors “could have a significant impact on the company’s full year 2017 GAAP financial results.”

The company’s stock price has been hammered since the disclosure of the loss of the Mattress Firm contracts earlier this month. The company has said its products will be out of Mattress Firm’s roughly 3,600 stores by the end of the first quarter.

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