LEXINGTON, Ky. — Bedding manufacturer Tempur Sealy International reported a drop in net sales and net income for its third quarter ended Sept. 30.
The company reported net sales of $1.28 billion, down 5.5% from the $1.36 billion reported the same period last year. Net income fell 25.2% to $132.7 million, or 75 cents per share, from $177.4 million or 87 cents per share during the same period.
Sales in North America fell 5.6% to $1.06 billion, compared to $1.12 billion in the prior year quarter, while international net sales fell 5.3% to $225.6 million, compared to $238.4 million last year.
Gross margin in the North American market was 39.8% compared to 39.9% last year, while international gross margin was 53.4% compared to 54.6% the same period in 2021.
The company said that North America net sales in the wholesale channel dropped 7.4% to $918.1 million, which the company said was primarily driven by macroeconomic pressures impacting U.S. consumer behavior. North America net sales through the direct channel rose 8.4% to $139.6 million compared to the same period last year.
International net sales through the wholesale channel dropped 21.2% to $85.1 million, compared to the third quarter of last year, while international net sales through the direct channel rose 7.8% to $140.5 million compared to the same period in 2021.
The company said it also ended the third quarter with $2.8 billion in total debt and consolidated indebtedness less netted cash of $2.7 billion.
During the third quarter, it also repurchased 1 million shares of its common stock for a total cost of $25.2 million. Over the last 12 months, it has repurchased 24.1 million shares of its common stock for a total cost of $887.7 million and as of Sept. 30, it had about $809.5 million available through its existing share repurchase authorization.
In a statement, company Chairman and CEO Scott Thompson said the third quarter results “demonstrate the continued strength of our business model and industry-leading products, as they mitigated the unfavorable foreign exchange dynamic and overall challenging operating environment in the quarter.”
“We performed largely in-line with our expectations while working through these headwinds,” he said. “ Over the last couple quarters, we have extended some capital project timelines, and trimmed around the edges, cutting back on expected hiring and expenses. Going forward, we will keep the current operating environment in mind as we drive our competitive advantages to outperform the global bedding market and position ourselves well for the market’s eventual normalization.”