Tempur Sealy sales down 0.8% in 2016
February 16, 2017,
LEXINGTON, Ky. -- Tempur Sealy International said total net sales decreased 0.8% to $3,127.3 million for 2016. On a constant currency basis, total net sales increased 0.7%, with growth in both the North America and international business segments, the company reported.
"Overall, the worldwide markets for our products are solid and the team remains focused on our long-term initiatives,” said Scott Thompson, Tempur Sealy’s chairman and CEO. “Our fourth quarter adjusted EPS growth of 19% is evidence of the strength of company's brands, and business model, even against a relatively muted bedding industry."
GAAP net income was $202.1 million, compared with $73.5 million in 2015, a 175% increase. Adjusted net income was $242.4 million, compared with $199.9 million in 2015, the company said.
Earnings before interest, tax, depreciation and amortization increased 31.3% with $510.8 million, compared with $388.9 million in 2015. Adjusted EBITDA increased 14.4% to a record $521.6 million, as compared with $455.8 million in 2015, the company said.
GAAP operating income increased 34.4% to $415.5 million, as compared with $309.1 million in 2015. Adjusted operating income was $425.0 million, or 13.6% of net sales, as compared with $373.8 million, or 11.9% of net sales, in 2015.
In the fourth quarter, total net sales increased 0.3% to $769.5 million from $767.3 million in the fourth quarter of 2015. On a constant currency basis, total net sales increased 1.7%, with an increase of 1.9% in the North America business segment and an increase of 0.9% in the international business segment, the company said.
The GAAP gross margin in the fourth quarter was 41.5% as compared with 40.8% in the fourth quarter of 2015. GAAP net income was $63.4 million as compared with a net loss of $11.3 million for the fourth quarter of 2015. In the fourth quarter of 2015, the company recorded a $60.7 million tax charge related to its Danish tax matter.
North America net sales increased 1.9% to $623.4 million in the fourth quarter from $611.6 million in the fourth quarter of 2015. GAAP gross margin was 39.4% as compared with 38.7% in the fourth quarter of 2015. GAAP operating margin was 16.5% as compared with 15.5% in the fourth quarter of 2015, driven primarily by gross margin improvement, the company said.
International net sales decreased 6.2% to $146.1 million from $155.7 million in the fourth quarter of 2015. On a constant currency basis, international net sales increased 0.9%. GAAP gross margin was 50.6% as compared with 49.3% in the fourth quarter of 2015. GAAP operating margin was 18.2% as compared with 17.3% in the fourth quarter 2015, driven primarily by the increase in gross margin, officials said.
The company also released its financial guidance, saying that for the full year of 2017, it expects adjusted EBITDA to range from $400 million to $450 million, which includes approximately $15 million of unfavorable commodity inflation and $12 million of unfavorable foreign currency impact.
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