Tempur-Pedic Logs Record First-Quarter Profit and Sales
LEXINGTON, Ky.-A powerful performance in the North American market helped propel Tempur-Pedic to record totals in net income and net sales in its fiscal first quarter.
The specialty mattress manufacturer reported a bottom-line gain of 46 percent, to $48.3 million, and growth in net sales of 28 percent, to $325.8 million, for its first quarter, which ended on March 31. That sales increase included a jump of 37 percent in sales from the North American segment. Along with the sales pickup, Tempur-Pedic's profit got a boost from an increase of 311 basis points in gross margin, which finished the quarter at 52.3 percent.
Discussing the results in a conference call to financial analysts yesterday (as quoted from a transcript obtained from SeekingAlpha.com), Mark Sarvary, Tempur-Pedic's CEO, said the increase in sales included an increase in average unit selling prices, which helped both the top line and gross margin. Offsetting these factors was a rise of 31 percent in selling, general and administrative expenses, which, Sarvary said, included a 60 percent increase in investment in advertising.
Tempur-Pedic said its expectations for 2011 as a whole call for net sales to total between $1.31 billion and $1.36 billion. If these expectations come to pass, it would mean a sales gain of from 19 percent to 24 percent.