| BRIEFLY | |
| Tempur-Pedic second-quarter snapshot | |
| Net sales | $329.5 million |
| Net income | $29.1 million |
| Gross profit margin | 50.7% |
Specialty bedding manufacturer Tempur-Pedic, with headquarters in Lexington, Ky., reported net sales of $329.5 million in the second quarter of fiscal 2012, a 4% decrease over second-quarter 2011. Earnings per share declined 41% to $0.45 in the second quarter from $0.76 per share in the prior-year quarter.
North American net sales decreased 8% compared with the second quarter of fiscal 2011. International net sales increased 8%. On a constant-currency basis, international net sales increased 17%.
Global mattress sales decreased 4%, with an 8% decrease in the North American segment and an 11% decrease in the international segment. On a constant-currency basis, international mattress sales increased 20%. Pillow sales decreased 2% globally, falling 10% in North America but increasing 5% internationally. On a constant-currency basis, international pillow sales increased 12%.
The company reported that its net income decreased 45% to $29.1 million for the second quarter of 2012, compared with $53.1 million in the second quarter of 2011.
“As we stated on June 6, 2012, changes in the competitive environment in North America during the second quarter had an adverse impact on our performance,” said Mark Sarvary, Tempur-Pedic chief executive officer. “We are taking actions across our operations to realign our expense structure appropriately. At the same, time we are focused on a series of new initiatives designed to strengthen our competitive position. At next week’s industry tradeshow in Las Vegas, we will unveil several of these new initiatives to our customers. We are very confident in our company’s growth potential and our strong brand and, as a result, remain committed to our long-term strategic plan.”
The company’s gross profit margin in the second quarter was 50.7%, compared with 52.9% in the first quarter of 2011. The decrease was a result of increased promotions and discounts, debt reduction and product mix, offset partially by geographic mix, Tempur-Pedic said.
Operating profit margin was 14.4% as compared with 24.2% in the prior-year quarter.
Operating cash flow was $42 million for the quarter, down from $48.2 million in the second quarter of 2011.
During the second quarter, the company purchased 4.9 million shares of its common stock for a total cost of $138 million. As of June 30, Tempur-Pedic had $100 million available under its existing share repurchase authorization.
Tempur-Pedic maintained its full-year net sales guidance of approximately $1.43 billion but updated its full-year earnings guidance, forecasting earnings per share to be approximately $2.80, up from its prior forecast of $2.70 per share.
