Sealy reports $3.5M profit from continuing operations
Worldwide sales rise 0.4% in fourth quarter, but U.S. sales decline 3.6%
Larry Thomas -- Furniture Today, January 14, 2011
ARCHDALE, N.C. — Despite a decline in U.S. sales, bedding major Sealy recorded a profit from continuing operations of $3.5 million for its fourth fiscal quarter.
The company said worldwide sales rose 0.4% to $296.6 million in the quarter ended Nov. 28, but U.S. sales fell 3.6% to $224.6 million.
The U.S. sales figure included a decline of 1.7% in unit volume and a decline of 1.8% in the average unit selling price.
The quarterly profit from continuing operations, which equals 3 cents per fully diluted share, is a 23.6% jump from a profit from continuing operations of $2.83 million or 2 cents per diluted share in the same period a year ago.
Sealy sold its operations in Europe and Brazil last year, and results from those businesses aren't included in the continuing operations numbers.
Larry Rogers, president and CEO, said the drop is U.S. sales was due largely to heavier discounting and a greater mix of promotionally priced bedding.
During a conference call with securities analysts, Rogers said he expects a revamped Posturepedic line, which will be introduced later this month at the Las Vegas Market, will boost the company's U.S. sales and result in market-share gains in the second half of 2011.
Posturepedic typically accounts for about half of Sealy's domestic sales.
The new line, with retail price points of $699 to $2,399 in queen, features a titanium innerspring unit that he says is twice a strong as a conventional steel unit. It will be backed with a $10 million advertising campaign that will include television spots, point-of-sale materials and digital media ads, Rogers told analysts.
For the fiscal year ended Nov. 28, Sealy had worldwide sales of $1.22 billion, up 3.8% from $1.17 billion for the year ended Nov. 29, 2009.
Net income from continuing operations was $24.7 million, or 14 cents per diluted share, for the year. That's up from $22.9 million, or 15 cents per diluted share, the pervious year. The per-share earnings are higher for the previous year because the company had fewer outstanding shares.
Including a $38.4 million loss from discontinued operations, Sealy had a net loss of $13.7 million for the year. The previous year, the company recorded net income of $13.5 million, including a $9.4 million loss from discontinued operations.
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