Bedding major Sealy reported a 9.2% sales decline at the close of its fiscal fourth quarter when compared with the same period a year earlier. The Trinity, N.C.-based company ended the full fiscal year with sales up 1% over 2010.
“We were disappointed with our performance in the fourth quarter and the full fiscal year 2011,” said Larry Rogers, who announced his retirement as president and chief executive officer at the end of the year. “These results were not in line with the goals that we set.”
Net sales for 2011 increased to $1.23 billion from $1.22 billion in 2010. Gross profit for 2011 was $478.7 million, or 38.9% of net sales, versus $509.5 million, or 41.8% of net sales in fiscal 2010.
Sealy reported its net loss from continuing operations for fiscal 2011 was $5.7 million, its net loss from discontinued operations was $4.2 million and its net loss for the fiscal year was $9.9 million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2011 decreased 29% to $126.3 million, or 10.3% of net sales, from $177.9 million, or 14.6% of net sales, in the prior fiscal year.
Looking at fourth-quarter figures specifically, Sealy’s net sales were $269.3 million, a decline of $27.3 million, or 9.2%, over net sales in the prior-year quarter. Total U.S. net sales decreased 9.6% to $203 million from the fourth quarter of fiscal 2010. Wholesale unit volume decreased 5.7%.
International net sales declined $5.7 million, or 7.9%, from the fourth quarter of 2010 to $66.3 million. Excluding the effects of currency fluctuation, international net sales decreased 6.4% from the prior-year period. Sealy attributed the decrease primarily to lower sales in Canada.
Gross profit for fourth-quarter 2011 decreased by $24.8 million to $98.1 million, or 20%, from the prior-year quarter. Gross margin decreased 5 percentage points to 36.4%. The decrease as a percentage of net sales primarily was due to a decrease in gross profit margin in U.S. and
Canadian operations, the company said. U.S. gross profit margin decreased 5.8 percentage points to 35%. Higher-priced raw materials and other inflation, especially related to foam and steel, negatively impacted gross margin, as did the costs associated with the Next Generation Stearns & Foster line launch and other factors, the company said.
“As we look forward into 2012, we expect the industry to continue to experience higher growth in upper- and lower-priced product rather than growth in products at the middle price points,” Rogers said. “Accordingly, we are focused on a successful launch of our Next Generation Stearns & Foster and the development of our new Specialty Division at the upper price points of the market and recapturing momentum at the lower price points.”
