Matt Firm Absence Sends Tempur Sealy 2Q Sales Down 18%

July 27, 2017  by Larry Thomas in Economic News, Industry   

Tempur Sealy said it stopped selling product to Mattress Firm, its largest customer, in early April and had sales of only $1.2 million in the quarter. In last year’s second quarter, sales to Mattress Firm were $191.4 million, about 24% of the company’s total sales of $804.4 million.

Excluding Mattress Firm, the company said sales in North America rose 10% in the most recent quarter, driven by growth across all of its brands.

Although Tempur Sealy’s operating income plunged 43.5% to $56.6 million, net income was 15% above last year’s second quarter, totaling $24.5 million or 45 cents per share. Last year’s second quarter, however, included a one-time loss of $47.2 million for early retirement of debt.

The company’s EBIDTA, or earnings before interest, taxes, depreciation and amortization, fell 30.6% to $85.8 million.

"We are pleased with our sales and EBITDA performance, despite the loss of our largest customer, and, we are encouraged that our business trends accelerated throughout the quarter,” said Scott Thompson, chairman and CEO. “While worldwide industry trends continue to be a bit sluggish, we have outperformed our expectations and are raising the midpoint of our 2017 financial guidance."

The company didn’t issue sales or earnings per share forecasts, but said adjusted EBITDA should be $425 to $450 million for the 2017 calendar year.

For the first six months of 2017, sales totaled $1.38 billion, down 9.4% from $1.53 billion in the first half of 2016.

Six-month net income totaled $58.4 million or $1.07 per share. That was down from $60.9 million or 99 cents per share in the comparable period. The most recent earnings per share figure is higher because the company had about 7 million fewer shares outstanding.