Sealy reports net sales up 4% in third quarter

Mattress major Sealy, with headquarters in Trinity, N.C., reported net sales of $334.1 million in the third quarter of fiscal 2011, a 4.2% increase over the prior–year period.

Total U.S. net sales increased 2.5% to $257.3 million over the third quarter of fiscal 2010. International net sales increased $7.3 million, or 10.5%, from the third quarter of fiscal 2010 to $76.8 million. Excluding the effects of currency fluctuation, international net sales increased 4.8% from the third quarter of fiscal 2010. Sealy attributed the gain primarily to increased sales in Argentina and Mexico, as well as the effects of a stronger Canadian dollar.

Gross profit increased by $4.8 million to $137 million in the fiscal third quarter.

Income from operations increased by $1.7 million to $37.8 million, a 5% increase over the prior–year period.

“We continued to reap the benefits of both our recent Next Generation Posturepedic launch and our new advertising campaign in the third quarter,” said Larry Rogers, Sealy president and chief executive officer. “These results were achieved despite a more challenging macroeconomic environment, as well as volatility and increases in the costs of our raw materials.”

Sealy’s net income from continuing operations in the third quarter was $7.5 million, or $0.04 per diluted share, compared with $9.2 million, or $0.05 per diluted share, in the prior–year quarter.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the third quarter increased 1.3% to $48.4 million.

During the quarter, Sealy completed the launch of its Next Generation Posturepedic line, which it said represented the largest and fastest rollout in company history.

“Looking forward, we still feel confident in our ability to execute on the initiatives that we control, which now also include an acceleration in the launch of our Next Generation Stearns & Foster line, but the overall outlook for the consumer environment is less certain,” Rogers said. “These events, alongside current raw materials inflation, challenge our ability to deliver gross margin expansion and adjusted EBITDA growth in the second half of 2011. However, with the investments we are making in our product portfolio in 2011, we feel well positioned for 2012.”

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