Urethane Blog

Tempur Sealy Results

July 26, 2018

Tempur Sealy Reports Second Quarter 2018 Results

|PR Newswire|About: TPX
Q2: 07-12-18 Earnings Summary
EPS of $0.52 misses by $-0.11
Revenue of $669.7M (+ 1.6% Y/Y) misses by $-22.24M

– Tempur-Pedic US Sales Increased 10%

– Updated Financial Guidance for the Full Year 2018

PR NewswireLEXINGTON, Ky., July 26, 2018 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) today announced financial results for the second quarter ended June 30, 2018. The Company also updated its financial guidance for the full year 2018.

SECOND QUARTER 2018 FINANCIAL SUMMARY

  • Total net sales increased 1.6% to $669.7 million from $659.3 million in the second quarter of 2017. On a constant currency basis(1), total net sales increased 1.2%, with an increase of 0.1% in the North America business segment and an increase of 5.4% in the International business segment.
  • Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.2% as compared to 40.7% in the second quarter of 2017.
  • GAAP operating income decreased 1.9% to $55.5 million as compared to $56.6 million in the second quarter of 2017. Operating income in the second quarter of 2018 included $6.9 million of restructuring charges. Adjusted operating income(1) increased 10.2% to $62.4 million as compared to GAAP operating income of $56.6 million in the second quarter of 2017. The Company had no adjustments to operating income in the second quarter of 2017.
  • GAAP net income decreased 6.9% to $22.8 million as compared to $24.5 million in the second quarter of 2017. Adjusted net income(1) increased 16.3% to $28.5 million as compared to GAAP net income of $24.5 million in the second quarter of 2017. The Company had no adjustments to net income in the second quarter of 2017.
  • Earnings before interest, tax, depreciation and amortization (“EBITDA”)(1) decreased 2.3% to $83.8 million as compared to $85.8 million for the second quarter of 2017. Adjusted EBITDA(1) increased 5.7% to $90.7 million as compared to EBITDA(1)of $85.8 million in the second quarter of 2017. The Company had no adjustments to EBITDA in the second quarter of 2017.
  • GAAP earnings per diluted share (“EPS”) decreased 6.7% to $0.42 as compared to $0.45 in the second quarter of 2017. Adjusted EPS(1) increased 15.6% to $0.52 as compared to GAAP EPS of $0.45 in the second quarter of 2017. The Company had no adjustments to EPS in the second quarter of 2017.

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 to $527.8 million from $525.4 million in the second quarter of 2017. GAAP gross margin was 38.5% as compared to 37.9% in the second quarter of 2017. GAAP operating margin was 12.2% as compared to 10.6% in the second quarter of 2017.

North America net sales through the wholesale channel decreased $1.7 million to $494.3 million. North America net sales through the direct channel increased $4.1 million, or 13.9%, to $33.5 million, primarily driven by growth from expanded retail stores and increased web sales, as compared to the second quarter of 2017.

North America gross margin improved 60 basis points as compared to gross margin for the second quarter of 2017. The improvement was driven primarily by operational improvements, increased pricing, and favorable brand mix. These were partially offset by commodity cost inflation. North America operating margin improved 160 basis points as compared to operating margin for the second quarter of 2017. The improvement in operating margin was driven by favorable operating expense leverage and the improvement in gross margin.

International net sales increased 6.0% to $141.9 million from $133.9 million in the second quarter of 2017. On a constant currency basis(1), International net sales increased 5.4% compared to the second quarter of 2017. Gross margin was 51.2% as compared to 52.1% in the second quarter of 2017. Operating margin was 13.0% as compared to 19.6% in the second quarter of 2017.

International net sales through the wholesale channel increased $0.1 million to $108.5 million and sales through the direct channel increased $7.9 million, or 31.0%, to $33.4 million as compared to the second quarter of 2017.

International gross margin declined 90 basis points as compared to gross margin for the second quarter of 2017. The decline in gross margin was driven primarily by commodity cost inflation, foreign exchange and unfavorable mix. These were partially offset by the change in classification of royalty income due to the adoption of new revenue recognition guidance. International adjusted operating margin(1) declined 320 basis points as compared to operating margin for the second quarter of 2017, primarily driven by the change in classification of royalty income due to the adoption of new revenue recognition guidance and the decline in gross margin.

https://seekingalpha.com/pr/17226707-tempur-sealy-reports-second-quarter-2018-results

RSS Sign Up for Email Updates