Global mattress manufacturer Tempur Sealy International, Inc. has reported a decline in fourth quarter sales while the full year remained flat.
According to its latest trading update for the fourth quarter and year ended 31 December 2023, Q4 sales fell 1.4% to $1,170.5 million as compared to $1,187.4 million in the fourth quarter of 2022.
North America net sales decreased 4.0% to $895.4 million as compared to $932.3 million in the fourth quarter of 2022, primarily driven by macroeconomic pressures impacting U.S. consumer behaviour. International net sales increased 7.8% to $275.1 million as compared to $255.1 million in the fourth quarter of 2022.
Gross margin was 43.8% as compared to 41.2% in the fourth quarter of 2022. Net income decreased 24.2% to $77.1 million as compared to $101.7 million.
As for the full year, total sales were flat at $4.9 million, with net income down 19.2% to $368.1 million.
Company Chairman and CEO Scott Thompson commented: “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.
“Our competitive advantages of developing and marketing differentiated products through consumer-centric innovation; world-class manufacturing capabilities; successful omni-distribution platform; and vertical integration enabled the Company to deliver solid financial results. The Company is uniquely positioned to realize significant sales growth once the bedding category returns to growth.
“Regarding the pending Mattress Firm transaction, we certified compliance with the Federal Trade Commission’s second request in the fourth quarter of 2023 and expect the transaction to close in the second half of 2024. Both Tempur Sealy and Mattress Firm continue to make joint progress in integration planning, including the signing of post-closing supply agreements with numerous companies providing Mattress Firm product.
“These agreements provide access post-closing to certain consumer-desired products, solidifying important supplier relationships. Additional discussions regarding post-closing supplier relationships are ongoing. Overall, we are optimistic about Tempur Sealy’s future and look forward to welcoming Mattress Firm into the organization later this year.
“We are pleased to issue 2024 guidance that targets growth in both adjusted earnings per share and sales. Underpinning our guidance is recent distribution gains and a belief that category demand is stabilizing around the world from negative year-over-year industry units. We expect full year 2024 industry units to be consistent with 2023 levels.
“With our strong financial position, resilient operating model and the recent investments made in our brands, products and expanded capacity, Tempur Sealy is positioned to grow adjusted earnings per share and sales. As we grow into our new foam-pouring plant in the U.S. and given our near-term category outlook, we expect pressure on our profits in the first quarter of 2024 with adjusted EPS likely being between $0.45 and $0.50 then returning to year-over-year growth in subsequent quarters.”
