By Alan Wolf, YSN
Tempur Sealy International (TSI) has revised its second-quarter outlook skyward, as solid sales in May and early June offset a challenging April.
Writing in a Q2 earnings update, TSI Chairman and CEO Scott Thompson noted that “There is no question that post-April order trends have been strong,” with Tempur-Pedic and Sealy-branded products showing year-over-year domestic growth over the past six weeks. That’s in sharp contrast with business conditions in April, which the company described as “very difficult” due to shelter-in-place orders and other COVID-19-realted issues that impacted the bedding market.
Thompson said that while most brick-and-mortar bedding retailers are experiencing lower average selling prices (ASPs) and reduced store traffic, closing rates are stronger compared to last year. What’s more, online sales for both third-party retailers and the company’s own direct-to-consumer segment have been “very strong throughout the quarter,” he reported, with e-commerce sales up more than 125 percent quarter-to-date worldwide.
Based on the improving sales environment, the company is now forecasting a 15 percent decline in total second-quarter net sales from the year-ago period, compared to the projected 30 percent decrease it anticipated as recently as May 28. Unadjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ending June 30, will be at least $50 million, it estimated.
The uptick in business jibes with a bullish report issued by industry analyst Piper Sandler and highlighted by FurnitureToday, which found that “Sales trends in mattresses continue to improve sequentially by week with increasing average selling prices and surprisingly strong demand.” The Minneapolis-based investment bank also cited the TSI update, suggesting that the company could “still significantly exceed its new guidance,” as its competitive positioning “remains the best in company history.”
In his revised forecast, Thompson added that nearly all factory employees are back on the job in order to meet current demand.