Sealy Net Loss Grows to $15.2 Million in Fourth Quarter
TRINITY, N.C.-In what retiring President and CEO Larry Rogers called a disappointing performance, Sealy's fourth-quarter net loss climbed from $4.5 million to $15.2 million from fiscal years 2010 to 2011.
Significant drops in both sales and gross margin were the primary culprits. Net sales in the quarter, which ended on Nov. 27, were off 9.2 percent to $269.3 million, as sales in the company's lower-price-point products lost volume due to increased competition. That sales decline, along with higher raw-materials cost, combined to reduce gross margin by 500 basis points, to 36.4 percent. Selling, general and administrative expenses on a dollar basis were flat in comparison with the prior year's fourth quarter, but increased 336 basis points as a percentage of sales to 36.7 percent.
Rogers said the fourth-quarter results were "not in line with the goals that we set forth in the beginning of 2011," and added that Sealy is making "operational changes to improve our future business results." He added that the company is now focused on the launch of its Next Generation Stearns & Foster line and the development of its specialty division. He also said he expects that much of the industry's growth in 2012 will come from upper-price-point and lower-price-point mattress lines.
In December, Sealy announced that Rogers would retire some time this year, and that the company is currently searching for his successor.
For the full fiscal 2011 year, Sealy was able to reduce its net loss from $13.7 million in 2010 to $9.9 million in 2011. Net sales rose a bare 0.8 percent to $1.2 billion.