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From Home Furnishing Business

Tempur Sealy Reports Lower Q4 Sales, Profits

Still feeling the effects of the termination of its contract with Mattress Firm last year, mattress producer Tempur Sealy International (NYSE: TPX) reported a 15.9% decline in fourth-quarter sales and a 6% dip in profits.

Worldwide sales for the final quarter of 2017 totaled $648.2 million, down from $771.1 million the 2016 fourth quarter.

Excluding sales to Mattress Firm, which totaled $155.7 million in the 2016 fourth quarter, the company said North American sales in the most recent quarter rose 4%, driven by a 19% jump in sales of Tempur-Pedic products.

In addition, the company’s direct-to-consumer sales shot up 55.7% to $34.4 million in the most recent quarter.

Fourth-quarter net income totaled $49.7 million or 91 cents per share. That was down 6% from $52.9 million or 94 cents per share in the 2016 fourth quarter.

The net income figure included a $23.8 million tax benefit stemming from recently-enacted changes to U.S. tax law.

Operating income was down 23.6% to $79 million, although gross margin increased to 42.2% from 41.2% in the 2016 fourth quarter.

"We enter 2018 as a much stronger company, supported by a diversified base of retail partners and a growing direct to consumer business,” said Scott Thompson, chairman and CEO. “Our manufacturing operations have never been stronger, and we are incredibly excited about our innovative new product lineup, which will enable our retail partners to succeed by driving higher average selling prices."

For the 2017 calendar year, worldwide sales were down 12% to $2.75 billion, while full-year net income tumbled 20.3% to $152.7 million or $2.79 per share.

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