Simmons sales up
By Larry Thomas -- Furniture Today, March 16, 2008
Atlanta — Despite a tough retail business climate, bedding major Simmons reported double-digit sales increases for both the fourth quarter and the full year in 2007.
The company said fourth quarter sales were up 19.9% to $269.6 million, while sales for all of 2007 jumped 17.2% to $1.13 billion.
Domestically, sales were 12.8% ahead of last year's fourth quarter, totaling $239.2 million. For the full year, domestic sales rose 11.4% to top $1 billion for the first time, totaling $1.002 billion.
"During the year, we gained considerable market share, and the fourth quarter was the eighth consecutive quarter that our sales growth exceeded the growth rate for the industry," said Charlie Eitel, chairman and CEO.
Fourth quarter net income came to $6.2 million, compared with a net loss of $2.8 million in last year's fourth quarter.
For all of 2007, net income was $23.9 million. That compares with $47.6 million in 2006, a figure that included a one-time gain of $43.3 million on the sale of the Sleep Country USA retail chain.
Eitel said he doesn't expect any short-term improvement in the business climate, but he believes Simmons can maintain its growth pace.
"We believe our sales momentum, strong product offerings and keen focus on cost management put us in a position to be successful — despite a soft economy and higher raw materials costs," he said.
Eitel said his biggest concern for 2008 is inflation in raw materials and fuel prices.
An upcoming 3.3% price increase on mattresses retailing for under $1,000 will help, but he said the company still must be vigilant about controlling costs.
"There has been virtually no pushback on (the price increase). Everybody understands the problem," he said. "And we have designed the increases so the retailer can pick up margin."
Prices on products retailing for more than $1,000 were raised an average of 2.8% on Nov. 5.
| Simmons | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/29 | 2007 | 2006 | Change |
| (a) Includes a pretax gain of $43.3 million in the 2006 year on the sale of Sleep Country USA. Also includes an income tax benefit of $482,000 in the 2007 quarter. |
|||
| Sales | $269,572,000 | $224,790,000 | 19.9% |
| Operating income | 23,038,000 | 15,943,000 | 44.5% |
| Net income (a) | 6,214,000 | (2,802,000) | — |
| Earnings per share | NA | NA | NA |
| Year ended 12/29 | 2007 | 2006 | Change |
| Sales | $1,126,841,000 | $961,625,000 | 17.2% |
| Operating income | 104,334,000 | 105,622,000 | (1.2%) |
| Net income (a) | 23,949,000 | 47,614,000 | (49.7%) |
| Earnings per share | NA | NA | NA |
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