October 29, 2021

Recticel Results

Trading update 3rd quarter 2021 – Strong performance despite significant cost inflation

Regulated information, Brussels, 29/10/2021 — 06:58 CET, 29.10.2021

• Net sales 3Q2021 increase from EUR 217.4 million in 3Q2020 to EUR 319.7 million (+47.1%), of which +15.8% organic growth, +0.5% currency effect and a EUR 66.1 million contribution from FoamPartner 
• Year-to-date September 2021 net sales increase from EUR 591.6 million in 9M2020 to EUR 915.9 million (+54.8%), of which +31.2% organic growth, +0.2% currency effect and a EUR 138.0 million contribution from FoamPartner
• Net financial debt: EUR 189.0 million (30 June 2021: EUR 206.6 million) 

Olivier Chapelle (CEO): “The positive sales trend observed during 1H2021 continued in 3Q2021, driven by very strong demand in Insulation. Demand in Engineered Foams and Bedding has stabilised, due to overall hesitating consumer confidence and global supply chain issues affecting among others the automotive production. 

The chemical raw materials supply and prices are stabilizing, but volatility remains high given the recent steep inflation in energy costs affecting our suppliers. Our commercial teams continue to adapt pricing where necessary.

The integration of FoamPartner in Engineered Foams continues to progress according to plan.

The divestment process of our Bedding division is on track. It is the intention to sign a deal during 4Q2021 and to close the transaction in the course of 1Q2022.

The closing of the acquisition of the insulation board business of Gór-Stal is postponed sine die, as the owners have informed us recently that they do not want to proceed with the sale citing changed circumstances. Recticel will use all legal steps available to enforce the acquisition and obtain full damages.“

OUTLOOK

Despite declining momentum in some end-markets, reflecting a slowdown in economic recovery and supply chain disruptions, the Group confirms its expectation of an Adjusted EBITDA in a range between EUR 123 million to EUR 133 million for the full year 2021, including the contributions of FoamPartner (9 months) and its related synergies.

https://www.recticel.com/trading-update-3rd-quarter-2021-strong-performance-despite-significant-cost-inflation.html

October 29, 2021

Huntsman Q3 Results

Huntsman Announces Improved Third Quarter 2021 Earnings; Repurchases Approximately $102 million of Shares During the Quarter; Wins Significant Arbitration Award Against Albemarle

Download as PDF October 29, 2021 6:00am EDT

Related Documents

Audio Earnings WebcastEarnings Slides PDF

THE WOODLANDS, Texas, Oct. 29, 2021 /PRNewswire/ —

Third Quarter Highlights

• Third quarter 2021 net income of $225 million compared to net income of $57 million in the prior year period; third quarter 2021 diluted earnings per share of $0.94 compared to diluted earnings per share of $0.22 in the prior year period.
• Third quarter 2021 adjusted net income of $239 million compared to adjusted net income of $70 million in the prior year period; third quarter 2021 adjusted diluted earnings per share of $1.08 compared to adjusted diluted earnings per share of $0.32 in the prior year period.
• Third quarter 2021 adjusted EBITDA of $371 million compared to $188 million in the prior year period.
• Third quarter 2021 net cash provided by operating activities from continuing operations was $186 million. Free cash flow from continuing operations was $110 million for the third quarter 2021.
• Balance sheet is strong with a net leverage of 0.9x and total liquidity of approximately $2 billion.
• Repurchased approximately 4 million shares for approximately $102 million in the third quarter 2021.
• On October 28, 2021, Huntsman won an arbitration award against Albemarle for fraud and breach of contract in excess of $600 million of which the Company expects to net in excess of $400 million after attorney’s fees.

Huntsman Corporation (NYSE: HUN) today reported third quarter 2021 results with revenues of $2,285 million, net income of $225 million, adjusted net income of $239 million and adjusted EBITDA of $371 million. 

Peter R. Huntsman, Chairman, CEO and President, commented:

“We are pleased with the strong earnings we delivered in the third quarter.  Despite pockets of disruption in our supply chain and cost inflation, we see strong pent-up demand across most of our businesses with favorable pricing dynamics. In addition, we are benefiting from cost reduction programs and synergies from the acquisitions we completed over the past 18 months. As indicated in our second quarter earnings call, we resumed share repurchases and we used free cash flow generated in the quarter to repurchase approximately $102 million of our stock during the quarter at an average price of $25.64 per share.

Since 2017, we have divested approximately 40% of our portfolio, including much of our commodity product lines, while adding numerous differentiated and higher margin products to the portfolio through bolt–on acquisitions. Our investment grade balance sheet remains strong and, together with our cash generation, provides us with the opportunity to continue to return capital to shareholders and further our portfolio transformation with additional bolt–on acquisitions when they make strategic and financial sense. In addition, we are investing in high return organic projects that will increase our total returns and improve margins over the next 24 to 36 months.

I also want to recognize the efforts of our corporate leadership team as well as our Board of Directors in connection with our arbitration award announced yesterday afternoon. This was a multi-year effort that could not have been won without their support, integrity and cohesion. 

We have a bright future, remain focused on improving the quality of our margins, and look forward to discussing the Company’s strategy at our Investor Day on November 9th in New York City.”

Segment Analysis for 3Q21 Compared to 3Q20

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended September 30, 2021, compared to the same period of 2020 was largely due to higher MDI average selling prices and slightly higher sales volumes. MDI average selling prices increased in all our regions. Sales volumes increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown, partially offset by the impact of Hurricane Ida at our Geismar, Louisiana facility that occurred in the third quarter of 2021. The increase in segment adjusted EBITDA was primarily due to higher MDI margins resulting from higher MDI pricing and slightly higher sales volumes as well as stronger earnings from our PO/MTBE joint venture in China, partially offset by higher raw material costs. 

Performance Products

The increase in revenues in our Performance Products segment for the three months ended September 30, 2021, compared to the same period of 2020 was primarily due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown as well as in response to an increase in raw material costs. Sales volumes also increased primarily due to stronger demand. The increase in segment adjusted EBITDA was primarily due to increased revenue and margins, partially offset by increased fixed costs.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended September 30, 2021, compared to the same period in 2020 was primarily due to higher sales volumes, higher average selling prices and the favorable net impact of the Gabriel Acquisition and the sale of the India-based DIY business. Excluding our recent acquisition and divestiture, sales volumes increased across all of our specialty markets, primarily in relation to the ongoing recovery from the global economic slowdown. Average selling prices increased largely in response to higher raw material costs. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and the benefit from our recent acquisition.

Textile Effects

The increase in revenues in our Textile Effects segment for the three months ended September 30, 2021, compared to the same period of 2020 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to increased demand resulting from the ongoing recovery from the global economic slowdown, particularly in the North Asia and Americas regions. Average selling prices increased primarily in response to higher freight and logistics costs. The increase in segment adjusted EBITDA was primarily due to higher sales revenues, partially offset by higher fixed costs.

Corporate, LIFO and other

For the three months ended September 30, 2021, adjusted EBITDA from Corporate and other decreased by $11 million to a loss of $48 million from a loss of $37 million for the same period of 2020.

Liquidity and Capital Resources

During the three months ended September 30, 2021, our adjusted free cash flow from continuing operations was $110 million as compared to $189 million in the prior year period.  As of September 30, 2021, we had approximately $2 billion of combined cash and unused borrowing capacity.

During the three months ended September 30, 2021, we spent $76 million on capital expenditures as compared to $54 million in the same period of 2020.  For 2021, we expect to spend approximately $350 million on capital expenditures.

Income Taxes

In the third quarter 2021, our adjusted effective tax rate was 15%.  For 2021, our adjusted effective tax rate is expected to be approximately 19% to 20%.  We continue to expect our forward adjusted effective tax rate will be approximately 22% to 24% 

Albemarle Litigation

On October 28, 2021, a panel of three former federal judges sitting as arbitrators found that Albemarle (and its predecessor Rockwood) had defrauded Huntsman in connection with the sale of its pigments business in 2014, breached the contract under which the business was sold, and awarded Huntsman in excess of $600 million for the fraud and breach, inclusive of punitive damages and statutory interest at 9% of which the Company expects to net in excess of $400 million after attorney’s fees. The award is subject to confirmation and limited appeal in the New York state court.

Earnings Conference Call Information

We will hold a conference call to discuss our third quarter 2021 financial results on Friday October 29, 2021 at 10:00 a.m. ET.

Webcast link: https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/46827/indexl.html

The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman’s investor relations website, www.huntsman.com/investors.  Upon conclusion of the call, the webcast replay will be accessible via Huntsman’s website.

https://www.huntsman.com/news/media-releases/detail/499/huntsman-announces-improved-third-quarter-2021-earnings

October 29, 2021

Huntsman Q3 Results

Huntsman Announces Improved Third Quarter 2021 Earnings; Repurchases Approximately $102 million of Shares During the Quarter; Wins Significant Arbitration Award Against Albemarle

Download as PDF October 29, 2021 6:00am EDT

Related Documents

Audio Earnings WebcastEarnings Slides PDF

THE WOODLANDS, Texas, Oct. 29, 2021 /PRNewswire/ —

Third Quarter Highlights

• Third quarter 2021 net income of $225 million compared to net income of $57 million in the prior year period; third quarter 2021 diluted earnings per share of $0.94 compared to diluted earnings per share of $0.22 in the prior year period.
• Third quarter 2021 adjusted net income of $239 million compared to adjusted net income of $70 million in the prior year period; third quarter 2021 adjusted diluted earnings per share of $1.08 compared to adjusted diluted earnings per share of $0.32 in the prior year period.
• Third quarter 2021 adjusted EBITDA of $371 million compared to $188 million in the prior year period.
• Third quarter 2021 net cash provided by operating activities from continuing operations was $186 million. Free cash flow from continuing operations was $110 million for the third quarter 2021.
• Balance sheet is strong with a net leverage of 0.9x and total liquidity of approximately $2 billion.
• Repurchased approximately 4 million shares for approximately $102 million in the third quarter 2021.
• On October 28, 2021, Huntsman won an arbitration award against Albemarle for fraud and breach of contract in excess of $600 million of which the Company expects to net in excess of $400 million after attorney’s fees.

Huntsman Corporation (NYSE: HUN) today reported third quarter 2021 results with revenues of $2,285 million, net income of $225 million, adjusted net income of $239 million and adjusted EBITDA of $371 million. 

Peter R. Huntsman, Chairman, CEO and President, commented:

“We are pleased with the strong earnings we delivered in the third quarter.  Despite pockets of disruption in our supply chain and cost inflation, we see strong pent-up demand across most of our businesses with favorable pricing dynamics. In addition, we are benefiting from cost reduction programs and synergies from the acquisitions we completed over the past 18 months. As indicated in our second quarter earnings call, we resumed share repurchases and we used free cash flow generated in the quarter to repurchase approximately $102 million of our stock during the quarter at an average price of $25.64 per share.

Since 2017, we have divested approximately 40% of our portfolio, including much of our commodity product lines, while adding numerous differentiated and higher margin products to the portfolio through bolt–on acquisitions. Our investment grade balance sheet remains strong and, together with our cash generation, provides us with the opportunity to continue to return capital to shareholders and further our portfolio transformation with additional bolt–on acquisitions when they make strategic and financial sense. In addition, we are investing in high return organic projects that will increase our total returns and improve margins over the next 24 to 36 months.

I also want to recognize the efforts of our corporate leadership team as well as our Board of Directors in connection with our arbitration award announced yesterday afternoon. This was a multi-year effort that could not have been won without their support, integrity and cohesion. 

We have a bright future, remain focused on improving the quality of our margins, and look forward to discussing the Company’s strategy at our Investor Day on November 9th in New York City.”

Segment Analysis for 3Q21 Compared to 3Q20

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended September 30, 2021, compared to the same period of 2020 was largely due to higher MDI average selling prices and slightly higher sales volumes. MDI average selling prices increased in all our regions. Sales volumes increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown, partially offset by the impact of Hurricane Ida at our Geismar, Louisiana facility that occurred in the third quarter of 2021. The increase in segment adjusted EBITDA was primarily due to higher MDI margins resulting from higher MDI pricing and slightly higher sales volumes as well as stronger earnings from our PO/MTBE joint venture in China, partially offset by higher raw material costs. 

Performance Products

The increase in revenues in our Performance Products segment for the three months ended September 30, 2021, compared to the same period of 2020 was primarily due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to stronger demand in relation to the ongoing recovery from the global economic slowdown as well as in response to an increase in raw material costs. Sales volumes also increased primarily due to stronger demand. The increase in segment adjusted EBITDA was primarily due to increased revenue and margins, partially offset by increased fixed costs.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended September 30, 2021, compared to the same period in 2020 was primarily due to higher sales volumes, higher average selling prices and the favorable net impact of the Gabriel Acquisition and the sale of the India-based DIY business. Excluding our recent acquisition and divestiture, sales volumes increased across all of our specialty markets, primarily in relation to the ongoing recovery from the global economic slowdown. Average selling prices increased largely in response to higher raw material costs. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and the benefit from our recent acquisition.

Textile Effects

The increase in revenues in our Textile Effects segment for the three months ended September 30, 2021, compared to the same period of 2020 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to increased demand resulting from the ongoing recovery from the global economic slowdown, particularly in the North Asia and Americas regions. Average selling prices increased primarily in response to higher freight and logistics costs. The increase in segment adjusted EBITDA was primarily due to higher sales revenues, partially offset by higher fixed costs.

Corporate, LIFO and other

For the three months ended September 30, 2021, adjusted EBITDA from Corporate and other decreased by $11 million to a loss of $48 million from a loss of $37 million for the same period of 2020.

Liquidity and Capital Resources

During the three months ended September 30, 2021, our adjusted free cash flow from continuing operations was $110 million as compared to $189 million in the prior year period.  As of September 30, 2021, we had approximately $2 billion of combined cash and unused borrowing capacity.

During the three months ended September 30, 2021, we spent $76 million on capital expenditures as compared to $54 million in the same period of 2020.  For 2021, we expect to spend approximately $350 million on capital expenditures.

Income Taxes

In the third quarter 2021, our adjusted effective tax rate was 15%.  For 2021, our adjusted effective tax rate is expected to be approximately 19% to 20%.  We continue to expect our forward adjusted effective tax rate will be approximately 22% to 24% 

Albemarle Litigation

On October 28, 2021, a panel of three former federal judges sitting as arbitrators found that Albemarle (and its predecessor Rockwood) had defrauded Huntsman in connection with the sale of its pigments business in 2014, breached the contract under which the business was sold, and awarded Huntsman in excess of $600 million for the fraud and breach, inclusive of punitive damages and statutory interest at 9% of which the Company expects to net in excess of $400 million after attorney’s fees. The award is subject to confirmation and limited appeal in the New York state court.

Earnings Conference Call Information

We will hold a conference call to discuss our third quarter 2021 financial results on Friday October 29, 2021 at 10:00 a.m. ET.

Webcast link: https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/46827/indexl.html

The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman’s investor relations website, www.huntsman.com/investors.  Upon conclusion of the call, the webcast replay will be accessible via Huntsman’s website.

https://www.huntsman.com/news/media-releases/detail/499/huntsman-announces-improved-third-quarter-2021-earnings

October 28, 2021

Tempur Sealy Results

Tempur Sealy Reports Record Third Quarter Results

-Net Sales Increased 20% Compared to the Third Quarter of 2020, Direct Sales Increased 79%
-EPS Increased 52.6% to $0.87, Adjusted EPS Increased 18.9% to $0.88
-Raises 2021 Adjusted EPS Guidance Range to $3.20 to $3.30

LEXINGTON, Ky., Oct. 28, 2021 /PRNewswire/ — Tempur Sealy International, Inc. (NYSE: TPX) announced financial results for the third quarter ended September 30, 2021. The Company also issued updated financial guidance for the full year 2021 that reflects the improved business performance.

THIRD QUARTER 2021 FINANCIAL SUMMARY

• Total net sales increased 20.0% to $1,358.3 million as compared to $1,132.3 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, total net sales increased 19.2%, with an increase of 11.9% in the North America business segment and an increase of 71.6% in the International business segment.
• Gross margin was 42.5% as compared to 46.8% in the third quarter of 2020. Adjusted gross margin⁽¹⁾ was 46.9% in the third quarter of 2020. There were no adjustments to gross margin in the third quarter of 2021.
• Operating income increased 38.6% to $249.8 million as compared to $180.2 million in the third quarter of 2020. Operating income in the third quarter of 2020 included $45.2 million of amortization for aspirational plan stock-based compensation. Adjusted operating income⁽¹⁾ increased 11.0% to $252.1 million as compared to $227.2 million in the third quarter of 2020.
• Net income increased 46.1% to $177.4 million as compared to $121.4 million in the third quarter of 2020. Adjusted net income⁽¹⁾ increased 15.6% to $179.6 million as compared to $155.4 million in the third quarter of 2020.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽¹⁾ increased 5.5% to $295.2 million as compared to $279.9 million in the third quarter of 2020. Adjusted EBITDA⁽¹⁾ increased 6.6% to $297.6 million as compared to $279.3 million in the third quarter of 2020.
• Earnings per diluted share (“EPS”) increased 52.6% to $0.87 as compared to $0.57 in the third quarter of 2020. Adjusted EPS⁽¹⁾ increased 18.9% to $0.88 as compared to $0.74 in the third quarter of 2020.

KEY HIGHLIGHTS

Company Chairman and CEO Scott Thompson commented, “Our strong third quarter sales performance was driven by growth across all brands, products, channels and segments. Our broad-based performance is especially notable given the strong prior year comparative period and our inability to fully meet market demand in the quarter due to continued supply chain constraints. We continue to see opportunity to further grow our business and extend our lead in the design, manufacture and distribution of bedding products over the long term. Our key building blocks to future growth include the meaningful expansion of our total global addressable market via our OEM initiative and our TEMPUR international product launch, our industry-leading innovation capabilities and our balanced capital allocation philosophy. In 2022 and beyond, we expect to leverage these complementary building blocks to deliver double-digit sales and EPS growth.”

Business Segment Highlights

The Company’s business segments include North America and International. Corporate operating expenses are not included in either of the business segments and are presented separately as a reconciling item to consolidated results.

North America net sales increased 12.6% to $1,120.0 million as compared to $994.7 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, North America net sales increased 11.9% as compared to the third quarter of 2020. Gross margin was 39.9% as compared to 44.7% in the third quarter of 2020. Adjusted gross margin⁽¹⁾ was 44.8% in the third quarter of 2020. There were no adjustments to gross margin in the third quarter of 2021. Operating margin was 21.2% as compared to 23.6% in the third quarter of 2020. Adjusted operating margin⁽¹⁾ was 23.8% in the third quarter of 2020. There were no adjustments to operating margin in the third quarter of 2021.

North America net sales through the wholesale channel increased $104.1 million, or 11.7%, to $991.2 million, as compared to the third quarter of 2020, primarily driven by broad-based demand across our retail partners. North America net sales through the direct channel increased $21.2 million, or 19.7%, to $128.8 million, primarily driven by strong company-owned stores sales growth, as compared to the third quarter of 2020. 

North America gross margin declined 490 basis points as compared to adjusted gross margin⁽¹⁾ in the third quarter of 2020. The decline was driven by pricing benefit to sales with no improvement in gross margin, operational inefficiencies and unfavorable brand mix driven by supply chain issues. North America operating margin declined 260 basis points as compared to adjusted operating margin⁽¹⁾ in the third quarter of 2020. The decline was primarily driven by gross margin, partially offset by operating expense leverage.

International net sales increased 73.2% to $238.3 million as compared to $137.6 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, International net sales increased 71.6% as compared to the third quarter of 2020. Gross margin was 54.6% as compared to 61.9% in the third quarter of 2020. Operating margin was 21.1% as compared to 29.9% in the third quarter of 2020. Adjusted operating margin⁽¹⁾ was 22.1% as compared to 30.2% in the third quarter of 2020.

International net sales through the wholesale channel increased $7.9 million, or 7.9%, to $108.0 million as compared to the third quarter of 2020. International net sales through the direct channel increased $92.8 million, or 247.5%, to $130.3 million, primarily driven by the acquisition of Dreams Topco Limited (“Dreams”) on August 2, 2021,  as compared to the third quarter of 2020.

International gross margin declined 730 basis points as compared to the third quarter of 2020. The decline was primarily driven by the acquisition of Dreams and pricing benefit to sales with no improvement in gross margin. Dreams’ margin profile is lower than our historical international margins as they sell a variety of products across a range of price points. International adjusted operating margin⁽¹⁾ declined 810 basis points as compared to the third quarter of 2020. The decline was primarily driven by the acquisition of Dreams, the decline in gross margin and operating expense deleverage.

https://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-reports-record-third-quarter-results-0

October 28, 2021

Tempur Sealy Results

Tempur Sealy Reports Record Third Quarter Results

-Net Sales Increased 20% Compared to the Third Quarter of 2020, Direct Sales Increased 79%
-EPS Increased 52.6% to $0.87, Adjusted EPS Increased 18.9% to $0.88
-Raises 2021 Adjusted EPS Guidance Range to $3.20 to $3.30

LEXINGTON, Ky., Oct. 28, 2021 /PRNewswire/ — Tempur Sealy International, Inc. (NYSE: TPX) announced financial results for the third quarter ended September 30, 2021. The Company also issued updated financial guidance for the full year 2021 that reflects the improved business performance.

THIRD QUARTER 2021 FINANCIAL SUMMARY

• Total net sales increased 20.0% to $1,358.3 million as compared to $1,132.3 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, total net sales increased 19.2%, with an increase of 11.9% in the North America business segment and an increase of 71.6% in the International business segment.
• Gross margin was 42.5% as compared to 46.8% in the third quarter of 2020. Adjusted gross margin⁽¹⁾ was 46.9% in the third quarter of 2020. There were no adjustments to gross margin in the third quarter of 2021.
• Operating income increased 38.6% to $249.8 million as compared to $180.2 million in the third quarter of 2020. Operating income in the third quarter of 2020 included $45.2 million of amortization for aspirational plan stock-based compensation. Adjusted operating income⁽¹⁾ increased 11.0% to $252.1 million as compared to $227.2 million in the third quarter of 2020.
• Net income increased 46.1% to $177.4 million as compared to $121.4 million in the third quarter of 2020. Adjusted net income⁽¹⁾ increased 15.6% to $179.6 million as compared to $155.4 million in the third quarter of 2020.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽¹⁾ increased 5.5% to $295.2 million as compared to $279.9 million in the third quarter of 2020. Adjusted EBITDA⁽¹⁾ increased 6.6% to $297.6 million as compared to $279.3 million in the third quarter of 2020.
• Earnings per diluted share (“EPS”) increased 52.6% to $0.87 as compared to $0.57 in the third quarter of 2020. Adjusted EPS⁽¹⁾ increased 18.9% to $0.88 as compared to $0.74 in the third quarter of 2020.

KEY HIGHLIGHTS

Company Chairman and CEO Scott Thompson commented, “Our strong third quarter sales performance was driven by growth across all brands, products, channels and segments. Our broad-based performance is especially notable given the strong prior year comparative period and our inability to fully meet market demand in the quarter due to continued supply chain constraints. We continue to see opportunity to further grow our business and extend our lead in the design, manufacture and distribution of bedding products over the long term. Our key building blocks to future growth include the meaningful expansion of our total global addressable market via our OEM initiative and our TEMPUR international product launch, our industry-leading innovation capabilities and our balanced capital allocation philosophy. In 2022 and beyond, we expect to leverage these complementary building blocks to deliver double-digit sales and EPS growth.”

Business Segment Highlights

The Company’s business segments include North America and International. Corporate operating expenses are not included in either of the business segments and are presented separately as a reconciling item to consolidated results.

North America net sales increased 12.6% to $1,120.0 million as compared to $994.7 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, North America net sales increased 11.9% as compared to the third quarter of 2020. Gross margin was 39.9% as compared to 44.7% in the third quarter of 2020. Adjusted gross margin⁽¹⁾ was 44.8% in the third quarter of 2020. There were no adjustments to gross margin in the third quarter of 2021. Operating margin was 21.2% as compared to 23.6% in the third quarter of 2020. Adjusted operating margin⁽¹⁾ was 23.8% in the third quarter of 2020. There were no adjustments to operating margin in the third quarter of 2021.

North America net sales through the wholesale channel increased $104.1 million, or 11.7%, to $991.2 million, as compared to the third quarter of 2020, primarily driven by broad-based demand across our retail partners. North America net sales through the direct channel increased $21.2 million, or 19.7%, to $128.8 million, primarily driven by strong company-owned stores sales growth, as compared to the third quarter of 2020. 

North America gross margin declined 490 basis points as compared to adjusted gross margin⁽¹⁾ in the third quarter of 2020. The decline was driven by pricing benefit to sales with no improvement in gross margin, operational inefficiencies and unfavorable brand mix driven by supply chain issues. North America operating margin declined 260 basis points as compared to adjusted operating margin⁽¹⁾ in the third quarter of 2020. The decline was primarily driven by gross margin, partially offset by operating expense leverage.

International net sales increased 73.2% to $238.3 million as compared to $137.6 million in the third quarter of 2020. On a constant currency basis⁽¹⁾, International net sales increased 71.6% as compared to the third quarter of 2020. Gross margin was 54.6% as compared to 61.9% in the third quarter of 2020. Operating margin was 21.1% as compared to 29.9% in the third quarter of 2020. Adjusted operating margin⁽¹⁾ was 22.1% as compared to 30.2% in the third quarter of 2020.

International net sales through the wholesale channel increased $7.9 million, or 7.9%, to $108.0 million as compared to the third quarter of 2020. International net sales through the direct channel increased $92.8 million, or 247.5%, to $130.3 million, primarily driven by the acquisition of Dreams Topco Limited (“Dreams”) on August 2, 2021,  as compared to the third quarter of 2020.

International gross margin declined 730 basis points as compared to the third quarter of 2020. The decline was primarily driven by the acquisition of Dreams and pricing benefit to sales with no improvement in gross margin. Dreams’ margin profile is lower than our historical international margins as they sell a variety of products across a range of price points. International adjusted operating margin⁽¹⁾ declined 810 basis points as compared to the third quarter of 2020. The decline was primarily driven by the acquisition of Dreams, the decline in gross margin and operating expense deleverage.

https://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-reports-record-third-quarter-results-0