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Sealy sales drop 21% in 1st quarter, profits up
Bedding major Sealy’s results
for the first quarter of 2009
included a profit of $4.7 million—
attributed to reductions in expenses
and cost-cutting measures—and a
sales decline of 21%, to $310 million
over the same quarter of 2008.
The Archdale, N.C.-based com-
70 | BedTimes | May 2009
pany reported that selling, general
and administrative expenses were
$96.7 million in the first quarter,
$19.5 million less than the same period
a year ago. Sealy said it implemented
cost-saving initiatives that
cut $7.9 million in fixed expenses,
“including actions to decrease salary
and fringe benefit-related costs and
reduced spending on discretionary
items.”
“We are taking further measures
to improve our profitability through
gaining market share, improving
gross margins, reducing expenses
and maximizing financial flexibility,”
said Larry Rogers, Sealy president
and chief executive officer.
“Furthermore, the vertical integration
of our latex and innerspring
production provides Sealy with an
additional advantage during these
challenging economic times.”
Total domestic net sales for the
first quarter of 2009 were $234.8
million, compared to $281.3 million
in the first quarter of 2008.
Wholesale domestic net sales,
which exclude third-party sales
from Sealy’s component plants,
were $231 million, compared to
$276.7 million in the first quarter
of 2008.
Sealy’s average unit selling
price decreased 0.1% and unit
volume declined 16.5%. However,
the company said it “experienced
solid sales growth” in its Sealybranded
value products and that
its new Posturepedic product line
outperformed the rest of its U.S.
portfolio.
Sealy attributed a decline in
international sales to the weak
retail environment in Europe and
Canada. International net sales
decreased $35.4 million, or 32%,
from the first quarter of 2008 to
$75.2 million.
First-quarter gross profit was
$118.3 million, or 38.1% of net
sales, a decrease compared to
39.1% of net sales for the same
quarter in fiscal 2008. Sealy attributed
the year-over-year decrease
in gross margin to a decline in
international gross margins, which
resulted from higher raw material
prices and deleveraging of manufacturing
expenses.
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