Hampered by weak demand in two of its three business segments — bedding products and…
Tempur Sealy International said sales slipped 1.4% to $1.171 billion in the final quarter of 2023 amid continuing soft demand in the bedding industry.
The Lexington, Kentucky-based mattress producer said its net income and earnings per share also tumbled more than 24% in the quarter, but gross margin rose to 43.8% from 41.2% in the fourth quarter of 2022 due to operational efficiencies and lower commodity costs.
Sales in North America totaled $895.4 million in the fourth quarter — 4% below the final quarter of 2022 — but international sales jumped 7.8% to $275.1 million. Within North America, sales in the wholesale channel fell 6.2% to $762.8 million, while sales in the direct-to-consumer channel rose 11.1% to $132.6 million.
“We are pleased with our fourth quarter and full year 2023 financial performance, especially in light of the soft demand within the bedding category. We believe the company outperformed the category,” said Scott Thompson, chairman and CEO. “The company is uniquely positioned to realize significant sales growth once the bedding category returns to growth.”
Fourth quarter net income totaled $77.1 million or 43 cents per share, compared with $101.7 million or 57 cents per share in the final quarter of 2022.
For the 2023 calendar year, worldwide sales totaled $4.925 billion, an increase of 0.1% from $4.921 billion in 2022.
Full-year net income totaled $368.1 million or $2.08 per share. That was down 19% from $455.7 million or $2.53 per share in 2022.
Thompson said Tempur Sealy is forecasting sales growth in the low- to mid-single digits in 2024, as he expects industry unit sales to be roughly even with 2023.
The company is projecting adjusted earnings per share, which don’t include one-time charges such as costs related to its pending acquisition of Mattress Firm, of $2.60 to $2.90 in 2024. Tempur Sealy had adjusted earnings per share of $2.40 in 2023 and $2.60 in 2022.
Thompson said the company expects the Mattress Firm acquisition to close in the second half of 2024.
