LEXINGTON, Ky., June 18, 2019 /PRNewswire/ -- Tempur Sealy
International, Inc. (NYSE:TPX, the "Company") is broadening
distribution of its bedding products by entering into two new
third-party retail relationships and expanding an existing retailer
relationship. The additional net sales from these three supply
agreements are expected to be in excess of $400 million on an annual run rate basis once
product launches are completed. The impact on the Company's
previously announced adjusted EBITDA guidance for 2019 is not
expected to be material, with an initial estimate of incremental
annual adjusted EBITDA benefit in the range of $75 million to $100
million beginning in 2020.
The Company announced it has entered into a supply agreement
with Mattress Firm, Inc. ("Mattress Firm"), the largest specialty
mattress retailer in North
America, to reintroduce Tempur-Pedic, Stearns & Foster,
and Sealy branded products into approximately 2,500 Mattress Firm
stores across the United States.
This agreement represents a significant opportunity for both
companies. This agreement reunites some of the strongest bedding
brands with the more than three million people a year that find
their right sleep solution at Mattress Firm. The reintroduction of
products into Mattress Firm stores is expected to commence in the
fourth quarter of 2019 and to be completed early in the first
quarter of 2020.
The Company also announced the recent expansion in its long-term
supply agreement with Big Lots, Inc. ("Big Lots"), a 1,400-store
retailer in the United States. This agreement is expected to
grow the sales of entry-level Sealy products and to drive unit
volume, primarily in the below $1,000
retail price point, a segment that has been a recent focus of the
Company. Big Lots' growing partnership with Sealy is evidence of
the investments in product quality and manufacturing reliability
that Sealy has made in recent years. Sealy's launch of new products
with Big Lots is expected to be complete by year end 2019.
As previously announced, the Company also recently extended
its European retail distribution network by reaching a supply
agreement with Beter Bed Holding, one of Europe's leading bedding retailers. The launch
of new products with Beter Bed Holding is expected to be complete
by the end of 2019, and initially will include over 100 stores.
Tempur Sealy International, Inc. Chairman, President and CEO
Scott Thompson commented, "The
expansion of our distribution is a testament to the strength of our
brands, coupled with reliable manufacturing and quality
service. Our premium brands and innovative products have
allowed us to service a growing customer base. We expect these
newly reported transactions will have a positive impact on
expanding our brands' share of voice in the market and in
leveraging our cost structure. Aligning with quality third-party
retailers in a win-win structure is consistent with our
distribution strategy."
Thompson added, "While the most important aspect of our
worldwide omni-channel distribution strategy is third-party retail
distribution, we continue to pursue our highly successful direct to
consumer initiatives, both online and through company-owned retail
stores. Furthermore, the Company has also embarked on an initiative
to capture additional market share in emerging e-commerce and big
box retailer channels as a continuation of our focus to be wherever
the customer wants to shop."
The Company will hold a conference call on Wednesday, June 19, 2019 at 8:00 a.m. Eastern Time, to discuss further
details regarding this release.
The dial-in number for the conference call is (800)
850-2903. The dial-in for international callers is (224)
357-2399. The call is also being webcast and can be accessed
on the investor relations section of the Company's website,
www.tempursealy.com. After the conference call, a webcast replay
will remain available on the investor relations section of the
Company's website for 30 days.
Forward-Looking Statements
This press release contains
statements that may be characterized as "forward-looking" within
the meaning of the federal securities laws, which includes
information concerning one or more of the Company's plans,
objectives, goals, strategies, and other information that is not
historical information. When used in this release, the words
"expects," "guidance," "anticipates," "estimates," "will," and
variations of such words or similar expressions are intended to
identify forward-looking statements. These forward-looking
statements may include, without limitation, statements relating to
the Company's expectations regarding its product launches, new
business relationships and expansion plans, and the respective
impacts those items might have on the Company's strategy and
objectives, results of operation, liquidity or financial position.
Any forward-looking statements contained herein are based upon
current expectations and beliefs and various assumptions. There can
be no assurance that the Company will realize these expectations,
meet its guidance, or that these beliefs will prove correct. The
Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which such statement is made.
Numerous factors, many of which are beyond the Company's
control, could cause actual outcomes to differ materially from
those expressed as forward-looking statements. These risk factors
include risks associated with the occurrence of any event, change
or other circumstance that could give rise to the right of the
Company, Mattress Firm, Big Lots or Beter Bed to terminate the
applicable supply agreement; the Company's ability to successfully
implement the launches with Mattress Firm, Big Lots and Beter Bed
and other new or expanded retail accounts for 2019 and beyond; the
possibility that the anticipated benefits of the supply agreements
with Mattress Firm, Big Lots or Beter Bed are not realized when
expected or at all; the impact of the macroeconomic environment in
both the U.S. and internationally (including the impact of highly
inflationary economies) on the Company, its business segments,
Mattress Firm, Big Lots and Beter Bed, as well as the Company's
expectations regarding growth of the mattress industry;
uncertainties arising from global events; the efficiency and
effectiveness of the Company's advertising campaigns and other
marketing programs; the ability to increase sales productivity
within other existing retail accounts and to further penetrate the
retail channel, including the timing of opening or expanding within
large retail accounts and the timing and success of product
launches; the ability to maintain efficient, timely and
cost-effective production and delivery of products, and manage
growth; competition in the Company's industry; consumer acceptance
of the Company's products; general economic, financial and industry
conditions, particularly conditions relating to the financial
performance and related credit issues present in the retail sector;
financial distress among the Company's business partners, customers
and competitors; financial solvency and related problems
experienced by other market participants; sales fluctuations due to
seasonality; and the effect of future legislative or regulatory
changes, including changes in international trade duties, tariffs
and other aspects of international trade policy.
Other potential risk factors include the risk factors discussed
under the heading "Risk Factors" under ITEM 1A of Part 1 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 2018. There may be
other factors that may cause actual results to differ materially
from the forward-looking statements contained herein. The Company
undertakes no obligation to update any forward-looking statement
contained herein to reflect events or circumstances after the date
on which such statement is made.
Adjusted EBITDA as used in connection with the Company's outlook
for 2019 and 2020 is a non-GAAP financial measure that excludes or
has otherwise been adjusted for items impacting comparability. The
Company is unable to reconcile this forward-looking non-GAAP
financial measures to GAAP net income, its most directly comparable
forward-looking GAAP financial measure, without unreasonable
efforts, because the Company is currently unable to predict with a
reasonable degree of certainty the type and extent of certain items
that would be expected to impact GAAP net income in 2019 and 2020
but would not impact adjusted EBITDA. Such items may include
restructuring activities, foreign currency exchange rates, income
taxes and other items. The unavailable information could have
a significant impact on the Company's full year GAAP financial
results for 2019 and 2020.
About the Company
Tempur Sealy International, Inc.
(NYSE: TPX) develops, manufactures, and markets mattresses,
foundations, pillows and other products. The Company's
products are sold worldwide through third party retailers, its own
stores, and online. The Company's brand portfolio includes many
highly recognized brands in the industry, including Tempur®,
Tempur-Pedic®, Sealy® featuring Posturepedic® Technology, and
Stearns & Foster®. World headquarters for Tempur Sealy
International is in Lexington, KY.
For more information, visit http://www.tempursealy.com or call
800-805-3635.
Investor Relations Contact
Aubrey Moore
Investor Relations
Tempur Sealy International, Inc.
800-805-3635
Investor.relations@tempursealy.com
Public Relations Contact
Rick
Maynard
Public Relations
Tempur Sealy International, Inc.
859-455-2988
Rick.Maynard@tempursealy.com
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SOURCE Tempur Sealy International, Inc.