LEXINGTON, Ky., June 17, 2020 /PRNewswire/ -- Tempur Sealy
International, Inc. (NYSE: TPX, "Company" or "Tempur Sealy") today
provided an update on its expected second quarter financial
results. Quarter-to-date orders have significantly improved from
previous expectations and the Company now estimates total second
quarter net sales to be down only 15% compared to prior year as
strong sales in May and early June are mitigating a very difficult
April. This improvement in order trends has been broad-based
geographically, driven by improving wholesale channel trends and
continued robust growth of over 125% from global e-commerce
quarter-to-date.
Additionally, the Company now expects in the second quarter to
achieve at least $50 million of
unadjusted EBITDA and to report a ratio of consolidated
indebtedness less netted cash to adjusted EBITDA within the
Company's target range of 2.5 to 3.5 times. Account receivable
aging is consistent with the same period last year and full quarter
operating cash is expected to be positive.
Tempur Sealy Chairman and CEO Scott Thompson
commented, "This has been a very difficult period to forecast as
shelter-in-place orders and other COVID-19 related issues impact
the bedding market. But there is no question that post-April order
trends have been strong. Internationally, trends have improved as
the majority of our markets have returned to growth. Additionally,
I am pleased to highlight that in the U.S., our largest market,
both Tempur-Pedic and Sealy branded products have also grown
year-over-year in the month of May and through June to-date. Most
third-party retailers have reported seeing this growth both
in-store and online. In stores, most retailers are experiencing
lower average selling prices and reduced foot traffic, with
stronger closing rates compared to last year. The online channel
for most everyone, including third-party retailers and
direct-to-consumer, has been very strong throughout the quarter. In
fact, our global e-commerce sales are up over 125% quarter-to-date
while experiencing lower customer acquisition costs."
Thompson continued, "Our flexible operating model has quickly
adjusted to the improved trends and increased volume. In the U.S.,
we have brought back almost all plant employees to facilitate
servicing current demand. The rapid change in market conditions
over the last few months has resulted in some short-term
inefficiencies, but we believe these issues are manageable as
compared to the difficulties faced from the significant sales
declines in April."
The Company noted its expectations are based on information
available at the time of this release, and are subject to changing
conditions, many of which are outside of the Company's control. The
Company also noted that it was providing this update due to the
unusual circumstances resulting from the COVID-19 pandemic and
related economic downturn. The Company is not adopting any policy
or practice of providing any mid-quarter updates on net sales,
monthly net sales, unadjusted EBITDA, ratio of consolidated
indebtedness less netted cash to adjusted EBITDA, operating cash or
other aspects of its financial
performance.
Non-GAAP Financial Measures
Unadjusted EBITDA and ratio of consolidated indebtedness less
netted cash to adjusted EBITDA are non-GAAP financial
measures. Amounts shown for the Company's second quarter 2020
financial targets represent management estimates of performance
based on the Company's guidance provided on the date of this press
release. The Company notes that it is unable to reconcile
forward-looking unadjusted EBITDA 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 the second quarter of 2020 but would not impact unadjusted
EBITDA. These items that impact comparability may include income
taxes and other items. For additional information regarding
unadjusted EBITDA and the Company's ratio of consolidated
indebtedness less netted cash to adjusted EBITDA, please refer to
the Company's press release dated April 30,
2020.
Forward-Looking Statements
This press release may be deemed to include statements that are
"forward-looking" within the meaning of the federal securities
laws, which include 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", "estimates", "believes" and
variations of such words or similar expressions are intended to
identify such statements. Any forward-looking statements contained
herein are based upon current expectations and beliefs and various
assumptions. These forward-looking statements include, without
limitation, statements relating to the Company's expectations
regarding net sales, unadjusted EBITDA, ratio of consolidated
indebtedness less netted cash to adjusted EBITDA, operating cash
and performance generally for the second quarter of 2020 and
subsequent periods and the Company's expectations for emerging from
the market downturn. There can be no assurance that the Company
will realize these expectations or that these beliefs will prove
correct.
Numerous factors, many of which are beyond the Company's
control, could cause actual results to differ materially from any
that may be expressed herein as forward-looking statements. These
risk factors include the duration, scope and severity of COVID-19
and its effects on the Company's business and operations, including
the disruption or delay of production and delivery of materials and
products in the Company's supply chain; the impact of the
macroeconomic environment in both the U.S. and internationally on
the Company's business segments; uncertainties arising from global
events; the impact of travel bans, work-from-home policies, or
shelter-in-place orders; a temporary or prolonged shutdown of
manufacturing facilities or retail stores and decreased retail
traffic; the efficiency and effectiveness of the Company's
advertising campaigns and other marketing programs; consumer
acceptance of the Company's products; general economic, financial
and industry conditions, particularly conditions relating to
liquidity, financial performance and related credit issues present
in the retail sector; financial distress among the Company's
business partners, customers and competitors, and financial
solvency and related problems experienced by other market
participants, any of which may be amplified by the effects of
COVID-19. Other potential risk factors include the risk factors
discussed under the heading "Risk Factors" in Part I, ITEM 1A of
the Company's Annual Report on Form 10-K for the year
ended December 31, 2019 and in Part II, ITEM 1A of the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020. 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.
About the Company
Tempur Sealy International, Inc. (NYSE: TPX) is the world's
largest bedding manufacturer. Tempur Sealy International, Inc.
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
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SOURCE Tempur Sealy International, Inc.