Sealy sees double-digit gains domestically and globally

Larry Thomas -- Furniture Today, June 29, 2011

ARCHDALE, N.C. — Bedding major Sealy Inc. said worldwide sales for the quarter ended May 29 were 10.6% above the same quarter last year, but the company swung to a net loss of $377,000.

The company said the red ink was due to losses from operations in Brazil and Europe that recently were sold.

Without those discontinued operations, Sealy would have recorded a profit of $750,000 or 1 cent per share for the quarter. That compares with earnings from continuing operations of $3.67 million, or 4 cents per share, in the same quarter last year.

The most recent quarter's net loss compares with net income of $849,000, or 2 cents per share, in the same quarter last year.

Worldwide sales for the quarter, the second quarter of Sealy's fiscal year, totaled $321.3 million. That's up from $290.5 million in last year's second fiscal quarter.

U.S. bedding sales for the quarter were up 10.6% to $253.4 million - a figure driven by the introduction of the Next Generation Posturepedic line. Sealy said the revamped flagship line had been delivered to a majority of its retail customers by the end of the quarter.

"We were pleased with our operational and financial performance in the second quarter, which allowed the company to deliver double digit sales growth over the prior year, as well as sequential growth in gross margin, income from operations and adjusted EBITDA," said Larry Rogers, president and CEO. "We accomplished these results even as we saw conditions for the industry become more challenging than expected."

In the U.S. the company said wholesale unit volume increased 12.2%, while the average unit selling price fell 1.2%. The decrease in the average unit selling price was driven by a heavy mix of floor samples of the new Posturepedic line, which were sold at a significant discount during the product rollout.

For the six months ended May 29, worldwide sales totaled $626.8 million, an increase of 4.1% from the first six months of the previous fiscal year.

Sealy recorded a net loss of $1.28 million, or 1 cent per share for the most recent six months. That compares with net income of $6.56 million, or 5 cents per share, for the same period in 2010.

Excluding the discontinued operations, the company had a six-month profit of $880,000, or 1 cent per share.