Sealy sales slip 1% in fiscal third quarter

Company posts $15.8M loss on asset writedown

Larry Thomas -- Furniture Today, September 29, 2010

ARCHDALE, N.C. — A writedown of European assets caused bedding major Sealy to record a third-quarter net loss of $15.8 million on a 1% decline in sales.

The loss for the quarter ended Aug. 29, which equals 16 cents per share, compares with net income of $12.1 million or 13 cents per share in the same quarter in 2009.

Sealy said the loss included a non-cash charge of $23 million related to the value of its European assets. Without that charge, the company would have recorded a profit of $7.1 million for the quarter.

The company said worldwide sales for the quarter declined 1% to $346.2 million. U.S. sales, meanwhile, were down 2.2% to $251 million.

Unit volume was off 0.3% and the average unit selling price dropped 2.3%. The lower unit volume was attributed to lower sales of Sealy's flagship Posturepedic line, while the drop in the average unit selling price was due to a greater mix of promotionally priced bedding.

"While our third quarter results reflect the inconsistent industry demand and on-going pressures in the overall macroeconomic and retail environment, we remain focused on actions within our control to drive our future performance," said Larry Rogers, president and CEO. "In light of this challenging marketplace, we are actively working with our retail partners to execute promotions that will bring the consumer back into their stores, while continuing to make investments in new product rollouts and new product development to drive future sales growth."

For the first nine months of Sealy's fiscal year, sales rose 4.6% to $1 billion.

The nine-month net loss totaled $9.3 million or 10 cents per share. Excluding the third-quarter writedown, the company would have recorded net income of $13.7 million.

In the first nine months of the previous fiscal year, the company had net income of $11 million or 7 cents per share.