Sealy reports second-quarter loss

Bedding major Sealy posted a net loss of $5.2 million in the second quarter of 2009 compared to a net income of $12 million for the same period in 2008. The Archdale, N.C.–based company’s results for the quarter included charges of $11.9 million related to the refinancing of its senior credit facility.

Net sales for the second quarter fell 20.4% to $298.5 million from $375.4 million for the same period the prior year. Second–quarter gross profit declined 17.6%, or $26.2 million, to $122.2 million compared to $148.4 during second–quarter 2008.

A soft retail environment negatively impacted domestic revenue performance, the company said. Total U.S. net sales were $222.5 million in second–quarter 2009 compared to $258.7 million in the second quarter of 2008, a decline of 13.9%.

International net sales decreased $40.7 million, or 34.9%, from the second quarter of 2008 to $76 million in the second quarter of 2009. Excluding the effects of currency fluctuation, net sales declined 22.2% from the second quarter of 2008. This decline was primarily due to the weak retail environment in Canada and Europe, the company said.

Total operational cash flow was $41.6 million, or 13.9% of net sales, an increase of 60 basis points on a year–over–year basis and an increase of 240 basis points from first–quarter 2009. The sequential improvement was based on improved gross profit margin performance and continued cost improvements, the company said.

“During the second quarter, we were able to strengthen our competitive position, execute consistently on our strategic initiatives and substantially improve our operating performance compared to the first quarter of fiscal 2009, said Larry Rogers, Sealy president and chief executive officer. “While we expect market conditions to remain challenging, we will continue to take measures to improve our profitability through increasing collaboration with our retailer and supplier partners and the introduction of new products, while aggressively right–sizing our cost structure and maximizing our cash flow.”

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