As the calendar turned to November, Tempur-Sealy International reported on its financial results for the most recent quarter ending September 30, 2023 along with revised financial guidance for its full 2023 outlook. TSI shared the findings during a call with investors on November 2nd.
Total net sales for the company were down 0.5 percent compared to the same period a year prior, totaling just shy of $1.28 billion in Q3. In North America, TSI saw sales drop 3.2 percent in the quarter. The international segment saw sales increase more than 12 percent.
“We realized robust third quarter operating cash flows and expanding gross margins while our sales and earnings were solid against a challenged operating environment,” TSI Chairman and CEO Scott Thompson said in a statement. “We believe the company outperformed the broader bedding market. This outperformance and double-digit growth in international sales partially mitigated a challenged U.S. bedding market, which was softer than anticipated in the quarter.”
Mattress Firm Update
Operating expenses for TSI increased to $52.3 million during the quarter compared to $36.6 million last year. The jump was attributed to the $15.7 million that’s still tied up in the pending Mattress Firm acquisition. Adjusted operating expenses actually show a decrease in spending year over year to around $34 million in Q3 2023 versus $36 million last year.
On the $4 billion acquisition, which has been under intense scrutiny by the Federal Trade Commission since last December, TSI said it plans to formally respond to the FTC’s latest request during Q4 and ultimately close the transaction in mid- to late-2024.
“I am pleased to share that Tempur Sealy and Mattress Firm continue to make joint progress in synergies planning,” Thompson said. “In addition, Tempur Sealy has signed post-closing supply agreements with numerous companies providing Mattress Firm with access to certain consumer-desired products, solidifying important supplier relationships ahead of the expected close. Additional discussions regarding supplier relationships are ongoing.”
Earlier this year and not long after the deal was announced, Nationwide Marketing Group CEO Tom Hickman sat down with Thompson in order to give TSI the opportunity to address the independent retail channel and questions our Members had on the merger.
“We have a vested interest in NMG and we have a vested interest in the Independent channel,” Rusing said during the interview, pointing out that Nationwide Members, collectively, have become TSI’s second largest customer. “It’s been good business for us, it’s healthy, and we remain committed to it prior to this acquisition and after the acquisition. … It’s too big of a business for us not to be. There’s no change in our commitment [to the Independent channel] and, in fact, I would tell you that we’re probably going to have to work harder.”