LEXINGTON, Ky. – Tempur Sealy International’s net income dropped 10.6% to $76.3 million in the first quarter ended March 31, compared with net income of $85.3 million in the same quarter last year.

The company’s first quarter sales slipped 1.5% to $1.19 billion compared with $1.2 billion in the prior-year quarter.

North American sales dropped 2% to $901.1 million, compared with $919.6 million in the first quarter of 2023, while the company’s international business remained consistent with a 0.1% blip in sales to $288.3 million.

The company said its domestic wholesale business dropped 3.4% to $776.9 million, primarily because of “macroeconomic pressures impacting U.S. consumer behavior.” Net sales through Tempur Sealy’s direct channel climbed 7.7% to $124.2 million in the quarter compared with the same period last year.

International net sales through the wholesale channel increased $600,000, or 0.6%, to $108.9 million as compared with the first quarter of 2023. International net sales through the company’s direct channel decreased $800,000, or 0.4%, to $179.4 million as compared with the first quarter of 2023.

“We are pleased to report solid first quarter sales, earnings and record operating cash flow against a global backdrop which appears to be at a historical nadir,” said Scott Thompson, chairman and CEO. “The strong reception to our newly launched innovative products and our ongoing investment in compelling marketing to support the industry, combined with our broad-based omni-channel reach and our commitment to driving operational efficiencies, drove our industry outperformance in the first quarter. Although we look forward to the market’s recovery, this recessionary environment provides opportunity to highlight  the strength of our global business model and our leading competitive position. We continue to invest in our key initiatives and expect to emerge from the current downturn positioned well for long-term success.”

The biggest non news in this morning’s earnings release was that the company continues to work with the Federal Trade Commission to gain approval for its acquisition of Mattress Firm. The deal announced a year ago this week has remained a topic of conversation throughout the bedding segment as the FTC reviews the transaction and the impact it could have on competition throughout the mattress business.

Tempur Sealy had given the FTC pre-merger notification in the fall of 2022, and the commission began conducting interviews with bedding industry players, both manufacturers and retailers. The company has said it has complied with the FTC’s requests and in November 2023 provided additional documentation to the agency. In December, the company announced it was looking to divest of 200 stores in the Sleep Outfitters brand.

“Regarding the pending Mattress Firm transaction, which we have been working on for two and half years, we believe it will unlock benefits for customers and shareholders,” Thompson said. “We continue to work closely with the FTC to advance the transaction approval process. As previously disclosed, we anticipate the FTC will complete its review in the second quarter, and we are targeting closing the transaction in 2024. We look forward to bringing the Mattress Firm team onboard.”

The proposed close date for the acquisition at the time of the announcement was for the second half of 2024.

Looking ahead to the full year, Tempur Sealy held its expectations for the balance of the year for an adjusted earnings per share of between $2.60 and $2.90 with a sales outlook for low to mid-single digit year-over-year growth.

The company’s board of directors approved a quarterly cash dividend of 13 cents per share, payable May 30 to shareholders of record at the close of business on May 16.

See also:

• Tempur Sealy continues to ink supplier agreements, moving toward acquisition’s close
• Macroeconomic pressure delivers declines in Tempur Sealy’s year-end results

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