Tempur Sealy International said sales slipped 2.5% to $1.21 billion in the first quarter of the year as the mattress industry continued to suffer from weak consumer demand.
Net income was also down, tumbling 34.7% to $85.3 million, or 48 cents per share.
Scott Thompson, chair and CEO of the Lexington, Kentucky-based mattress major, said the numbers were in line with expectations, and noted the company is still outperforming the industry as a whole.
“Our first-quarter performance reflects the strength of our industry-leading business model, as we continued to outperform the broader industry against a challenging operating backdrop,” Thompson said. “Though the U.S. industry conditions were slightly less favorable than anticipated as a result of heightened macroeconomic pressures, we performed largely in line with our first-quarter expectations.”
In North America, the company’s net sales were $919.6 million, down 1.3% from last year’s first quarter. The company said sales through its wholesale channel were down 0.9% to $804.3 million, while direct-to-consumer sales fell 4% to $115.3 million.
International net sales fell 6.4% to $288.5 million — a decline the company said was largely due to unfavorable foreign currency exchange rates.
Thompson said he believes sales in the second quarter, which ends June 30, will show year-over-year growth. This is due to “strong reception to our newly launched products, encouraging order trends quarter to date, and fully lapping the challenging prior year comps in the first quarter,” he said.
Second-quarter sales won’t be impacted by Tempur Sealy’s recent agreement to buy Mattress Firm, the nation’s largest specialty mattress retailer. That deal, which is valued at approximately $4 billion in cash and stock, isn’t expected to close until the second half of 2024, according to a news release.
Under terms of the agreement, Mattress Firm will operate as a separate business unit within the company after the transaction closes.
“This acquisition aligns with our strategy of acquiring companies that extend our competitive advantages, enable us to move closer to consumers and facilitate continued innovation,” Thompson said. “This combination will complement Tempur Sealy’s extensive product development and manufacturing capabilities with vertically integrated retail. The two companies have grown over the last 35 years with a mutual focus on providing customers the best sleep products in the world. We are thrilled to formally bring these teams together.”