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Tempur-Pedic expects first-quarter sales decrease

Direct-channel sales ‘much weaker than planned’

By Furniture Today Staff -- Furniture Today, March 17, 2008

LEXINGTON, Ky. — Tempur-Pedic warned today that it expects a first-quarter sales decrease in the high single-digit percentage, resulting in earnings per share that are about half what the company posted in the comparable 2007 period.

“Based on recent industry data and feedback from retailers, we believe the U.S. mattress industry is experiencing an unprecedented slowdown,” said H. Thomas Bryant, president and CEO of the foam mattress and pillow manufacturer and marketer.

“Our operating expenses and advertising plans anticipated a stronger retail environment. However, we have reviewed our cost structure and are taking actions to reduce expenses while remaining committed to our business model and focus on premium products,” said Bryant.

In the 2007 first period, Tempur-Pedic reported earnings of $29.8 million or 35 cents per share on sales of $266 million.

Officials said sales were below plan this year because of “economic factors affecting consumer spending.”

Tempur-Pedic said that its high single-digit percentage decrease in total net sales for the quarter will include domestic sales down in the high teens and international sales down in the high single digits. The quarter ends March 31.

It said sales through the U.S. direct channel, the company’s highest margin channel, have been “much weaker than planned,” which will contribute to a lower gross margin. The company added that it expects that its net debt in the quarter will be lower than in the 2007 period.

Tempur-Pedic said it will report first-quarter results in April. It also said that its previous financial guidance for full year 2008 should no longer be relied upon.

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Tempur-Pedic sales sagging this quarter

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