Tempur Sealy net sales jump 12.5% in third quarter

Time：2019-11-04 15:15:05    Share：

Tempur Sealy International said net sales increased 12.5% in its third quarter, while direct channel net sales increased 62%.

“During the third quarter we recognized the highest gross profit in the company’s history, greater than what was generated previously across a larger presence,” said Tempur Sealy CEO Scott Thompson. “Our double-digit growth in operating income and adjusted EBITDA allows us to continue investing in our plants, products and people, while repurchasing our stock and strengthening our balance sheet by reducing our financial leverage.”

TSI’s gross margin was 43.9% as compared with 41.1% in the third quarter of 2018.

Operating income increased 42.4% to $120.6 million, compared with $84.7 million in the third quarter of 2018. Adjusted operating income was $97.8 million in the third quarter of 2018. There were no adjustments to operating income in the third quarter of 2019.

Net income increased 73.3% to $73.3 million, compared with $42.3 million in the year-ago period. Adjusted net income increased 29.2% to $72.5 million, compared with $56.1 million in Q3 2018.

Earnings before interest, tax, depreciation and amortization increased 33.7% to $150.7 million, compared with $112.7 million last year. Adjusted EBITDA increased 17.4% to $149.9 million, compared with $127.7 million in the 2018 period.

North America net sales increased 14.5% to $682 million, and North America net sales through the wholesale channel increased $48.6 million, or 8.8%, to $602.2 million. North America net sales through the direct channel increased $37.6 million, or 89.1%, to $79.8 million, driven primarily by growth from company-owned stores, including the acquisition of Sleep Outfitters. Excluding Sleep Outfitters, North America net sales through the direct channel increased 37%.

“This marks the sixth consecutive quarter of adjusted EPS growth driven almost entirely by improved operating performance vs. share buy backs,” Thompson said. He noted that the company has hired more than 600 new employees this year and invested “tens of millions of dollars in property, plant, and equipment to drive future performance.”

For the full year 2019, the company expects adjusted EBITDA to range from $485 million to $500 million, raising the mid-point by $28 million. The increase is driven by the above-expectations performance of the North America business during the third quarter and the more favorable outlook for the company’s launch and channel fill with Mattress Firm, partially offset by the increases to variable compensation.