Tempur Sealy International said second-quarter sales fell 2.8% to $1.23 billion, but net income rose nearly 15% due to improved gross margins and cost controls.
The Lexington, Kentucky-based company, which produces the Tempur-Pedic, Sealy and Stearns & Foster brands, said North American sales were off 3.8% to $978.4 million, while international sales increased 0.9% to $255.2 million.
Net income for the quarter, which ended June 30, was $106.1 million or 60 cents per share. That was up from income of $92.4 million or 52 cents per share in last year’s second quarter.
“We are pleased to see our global market outperformance mitigate the impact of softer than anticipated industry volumes,” said Scott Thompson, chair and CEO. “Despite an estimated mid-single digit industry decline over the quarter, more than our anticipated low-single digit decline for the period, our sales were only slightly below internal expectations. Our strong gross margin performance and solid cost controls resulted in healthy earnings growth in the second quarter.”
Gross margin was 44.9% in the most recent quarter, up from 42.7% in the same period last year. Operating income, meanwhile, jumped 9.1% to $173.3 million.
For the first six months of 2024, the company said worldwide sales fell 2.2% to $2.42 billion. Six-month net income was $182.4 million, or $1.02 per share. That was up from $177.7 million, or $1.01 per share in the first half of last year.
Due to the continuing industry slump, the company trimmed its earnings estimates for 2024. Thompson said Tempur Sealy is now projecting adjusted earnings per share, which don’t include a variety of one-time charges and credits, of $2.45 to $2.65. That’s down from a May projection of $2.60 to $2.90 per share.
Separately, Thompson expressed confidence the company’s acquisition of retail giant Mattress Firm would close late this year or early next year, despite opposition from the Federal Trade Commission, which has filed suit to block the deal.
We are confident in the pro-competitive rationale for this transaction and look forward to presenting the facts of our case,” Thompson said.
Get the latest news on TSI: FTC Moves to Block Tempur Sealy’s Acquisition of Mattress Firm.
