Tempur Sealy Provides Improved Second Quarter Expectations
Tempur Sealy International, Inc. (the “Company” or “Tempur Sealy”) provided an update on its expected second quarter financial results. Quarter-to-date orders have significantly improved from previous expectations and the Company now estimates total second quarter net sales to be down only 15% compared to prior year as strong sales in May and early June are mitigating a very difficult April. This improvement in order trends has been broad-based geographically, driven by improving wholesale channel trends and continued robust growth of over 125% from global e-commerce quarter-to-date.
Additionally, the Company now expects in the second quarter to achieve at least $50 million of unadjusted EBITDA and to report a ratio of consolidated indebtedness less netted cash to adjusted EBITDA within the Company’s target range of 2.5 to 3.5 times. Account receivable aging is consistent with the same period last year and full quarter operating cash is expected to be positive.
Tempur Sealy Chairman and CEO Scott Thompson commented, “This has been a very difficult period to forecast as shelter-in-place orders and other COVID-19 related issues impact the bedding market. But there is no question that post-April order trends have been strong. Internationally, trends have improved as the majority of our markets have returned to growth. Additionally, I am pleased to highlight that in the U.S., our largest market, both Tempur-Pedic and Sealy branded products have also grown year-over-year in the month of May and through June to-date. Most third-party retailers have reported seeing this growth both in-store and online. In stores, most retailers are experiencing lower average selling prices and reduced foot traffic, with stronger closing rates compared to last year. The online channel for most everyone, including third-party retailers and direct-to-consumer, has been very strong throughout the quarter. In fact, our global e-commerce sales are up over 125% quarter-to-date while experiencing lower customer acquisition costs.”
Thompson continued, “Our flexible operating model has quickly adjusted to the improved trends and increased volume. In the U.S., we have brought back almost all plant employees to facilitate servicing current demand. The rapid change in market conditions over the last few months has resulted in some short-term inefficiencies, but we believe these issues are manageable as compared to the difficulties faced from the significant sales declines in April.”
The Company noted its expectations are based on information available at the time of this release, and are subject to changing conditions, many of which are outside of the Company’s control. The Company also noted that it was providing this update due to the unusual circumstances resulting from the COVID-19 pandemic and related economic downturn. The Company is not adopting any policy or practice of providing any mid-quarter updates on net sales, monthly net sales, unadjusted EBITDA, ratio of consolidated indebtedness less netted cash to adjusted EBITDA, operating cash or other aspects of its financial performance.
About Tempur Sealy International
Tempur Sealy International, Inc. (NYSE: TPX) develops, manufactures, and markets mattresses, foundations, pillows and other products. The Company’s products are sold worldwide through third party retailers, its own stores, and online. The Company’s brand portfolio includes many highly recognized brands in the industry, including Tempur®, Tempur-Pedic®, Sealy® featuring Posturepedic® Technology, and Stearns & Foster®. World headquarters for Tempur Sealy International is in Lexington, KY. For more information, visit http://www.tempursealy.com or call 800-805-3635.
Aubrey Moore – Investor Relations – email@example.com – (800) 805-3635
Source: Tempur Sealy International, Inc.