Mattress major Sealy with headquarters in Archdale, N.C., has announced results from its 2010 fiscal second quarter. Net sales rose 6.1%, compared to the same period a year ago, to $316.5 million. It was the company’s third consecutive quarter of year–over–year sales growth.
Net income was $0.8 million—income was $7 million excluding debt redemption charges and payment–in–kind interest—compared to a loss of $5.4 million in the prior–year quarter. Gross profit for the second quarter was $128.2 million, a 5.2% increase over the same period in 2009.
Operating income, which included an incremental charge of $3.9 million relating to noncash compensation, was $24.7 million, compared to $28.9 million last year.
Sealy’s gross margin declined by 35 basis points to 40.5% from second–quarter 2009, driven by changes in product mix and investments associated with new product introductions, the company said.
“We are pleased with our results,” said Larry Rogers, Sealy president and chief executive officer. “We delivered our third consecutive quarter of year–over–year sales growth. Stearns & Foster continues to perform extremely well and we expect new products to drive future market–share gains in both innerspring and the fast–growing specialty sector. We also continue to focus on further deleveraging our balance sheet.”
Total U.S. net sales increased 3% to $229.1 million from the second quarter of fiscal 2009. U.S. gross profit margin decreased 176 basis points to 41.6%. The decrease was driven primarily by changes in product mix and investments made to introduce new products, the company said. Improvements in operations efficiencies, as well as higher absorption of fixed costs as a result of higher unit volumes, partially offset the decline.
International net sales increased $11.4 million to $87.4 million, or 15%, over 2009. Excluding the effects of currency fluctuation, international net sales increased 5.9% from the second quarter of last year. The company attributed the growth to the success of the new Stearns & Foster line in Canada, better execution of promotions and an increase in retail demand.