| BRIEFLY | |
| Sealy’s second quarter | |
| Net sales | $312 million |
| Income from operations | $26 million |
| Gross profit | $127 million |
| Gross profit margin | 40.7% |
Mattress maker Sealy reported that net sales for the second quarter of fiscal 2012 decreased by $9.3 million to $312 million, a 2.9% decline when compared with the second quarter of fiscal 2011.
The Trinity, N.C.-based company reported that gross profit grew by $1.9 million to $127 million, a 1.5% increase over the same quarter a year ago. Gross margin increased 1.8 percentage points to 40.7%. U.S. gross profit margin increased 2.5 percentage points to 40.8% of net sales.
The increase in the U.S. gross profit percentage was due, in part, to advances made in the manufacturing processes, which resulted in a 1.3 percentage point increase in U.S. gross profit margin, the company said. A reduction in product launch costs contributed an additional 1.3 percentage point increase in U.S. gross profit margin. Prior-year quarter results included $1.7 million of higher product launch costs, which were associated with the launch of the 2011 Next Generation Posturepedic line, the company said.
Income from operations for the second quarter of fiscal 2012 increased 16.5%, or $3.7 million, to $26 million.Net income from continuing operations for the second quarter of fiscal 2012 was $0.03 per diluted share.
“We delivered solid financial and operational performance in the second quarter of 2012,” said Larry Rogers, Sealy president and chief executive officer. “Our increased gross margin and adjusted EBITDA performance for the quarter were driven by the successful rollout of our Next Generation Stearns & Foster line and our strategic commitment to driving profitable sales.”
Total U.S. net sales decreased 5.2% to $240.2 million from the prior-year quarter. Excluding third-party sales from component plants, wholesale average unit selling price increased 5.4%, while wholesale unit volume decreased 10.4%.
The increase in AUSP was driven primarily by increases in all major innerspring lines and improved product mix related to the Next Generation Stearns & Foster product line, the company said. Sealy attributed the decrease in unit volume to relatively lower sales of Posturepedic beds, which grew 14.2% in the prior-year quarter.
International net sales increased $4 million, or 5.9%, from the second quarter of fiscal 2011 to $71.8 million. The increase was due primarily to increased sales in Canada, coupled with stronger sales performance in Argentina, the company said.
“As we look forward in 2012, we are focused on driving continued performance from the Next Generation Stearns & Foster line, our value-priced Sealy promotional line and the premium- priced Optimum by Sealy Posturepedic,” Rogers said. “Our Sealy promotional and Optimum lines began shipping in the second quarter of 2012 and we expect both of them to perform well during the second half of the year,” Rogers said.
