Tempur Sealy Goes from Loss to Profit in Q3
November 7, 2013,
LEXINGTON, Ky.-With the integration of Sealy still in progress, Tempur Sealy posted third-quarter net income of $40.2 million, against a net loss of $2 million in last year's third quarter.
The bottom-line results in both quarters reflected charges and costs related to Tempur-Pedic's acquisition of Sealy, which was finalized in March. Net sales in the quarter, which ended on Sept. 30, totaled $735.5 million, up 111.4 percent from last year's third quarter and including $389.9 million of Sealy net sales in this year's quarter.
Gross margin fell 857 basis points to 40.6 percent, the result of the inclusion of Sealy, whose margins are lower than those for the Tempur segments. Selling, marketing, general and administrative expenses were up 106.9 percent in dollars--again due to the inclusion of Sealy--but dropped 67 basis points as a percentage of sales, to 30.3 percent.
Mark Sarvary, Tempur Sealy's CEO, said the quarter was in line with the company's expectations. Sarvary noted that Tempur North America's sales were up slightly in the quarter, and the Sealy business produced growth. Because of the weakness in Europe, Tempur International's results were below plan, Sarvary said.