TPX - Earnings call 3 2023 | Tempur Sealy International, Inc.

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Operator

Good day, and thank you for standing by. Welcome to Tempur Sealy's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Aubrey Moore, Vice President, Investor Relations. Please go ahead.

Aubrey Moore

operator. you, Thank and everyone, for in participating Good thank call. today's morning, you

Chairman, are President CEO; Officer. today me President and Scott Financial Vice Joining Executive Thompson, and Rao, and Chief Bhaskar

safe that Reform Litigation of results XXXX. involve subject statements may Private statements Act forward-looking forward-looking and includes of the call to This the uncertainties harbor These differ provisions Securities due are actual materially annual factors could report are quarterly Form of variety the affect a filings, and adversely including Form factors SEC on that its in XX-K reports discussed XX-Q. business. to the company's These company's on

of only posted of morning's filed non-GAAP made. the This at to on be can speaks is statement forward-looking the financial it no investor.tempursealy.com website any and which update date commentary was will Any press information company obligations the undertakes release, in as which Reconciliations found the the include statements. on accompanying with investor non-GAAP forward-looking company's The information. financial SEC.

the in detailed Our comments information release. will the provided supplement press

And now introduction, turn to to pleasure call my over the Scott. with it's that

Scott Thompson

review performance, in on an then morning, before I update highlights Good us acquisition for Mattress from up joining proposed sharing earnings of XXXX third provide start third thank Firm more opening quarter our detail. quarter you After Aubrey. call everyone, call. will some performance and Bhaskar I'll Q&A. Thanks, our will our financial by and for that, on our the

sales best third quarter the and in reporting third are history. we the EPS Today, company's

billion we net For of and the sales $X.X adjusted of third EPS quarter approximately $X.XX. reported of XXXX,

cybersecurity performed than industry in operations We strong relative down relative and U.S. disruption our It macroeconomic with market year Overall, incident market expectations continued solid the brands, the operating exceeded well performance. our of low underperformed our volume our of Sealy softer challenging expectations Internationally, performance We despite with expected both and mitigated our of more approximately double in as gross are Our whole and on Tempur consistent last in team. with expectations. the margin demonstrate quarter believe positioned the impact a quarter. major our digits a performance results flow bedding background. The despite expansion. company and the the U.S. bedding quarter, down estimated a a generation strength line third year-over-year the industry is cash markets for with operations and of strong success. third

Turning for the to highlights quarter.

our industry-leading market. to the First, performance and driving relative U.S. broader brands our with the resonate continue strong products to consumer,

are Tempur's All The and feature, lineup premium, advocacy of new and compared in our our proposition rates initiatives strengthening to new the mattresses generate acoustic the cooling Base comfort the lumbar appeal the mix value favorable Down improvement attachment quarter and strengthen wellness-minded of advertising year-over-year. consumer. to to The Smart prior new Tempur retail Wake in supporting incremental Wind our robust offering, of products massage, technologies our and of and lineup Breeze adjustable Up year. an the continue driving innovation

drove mattress in quarter. in ASP third Tempur innovations foundation These the increase X% and a

complete generation to our portfolio our refresh products. introducing expect by of the U.S. XXXX, Looking next ahead full we to of Adapt Tempur

We expect in our on for years come. to new strong returns products investments

an advertising. Tempur solid our of the to drove e-commerce continued Tempur health Over investments support and U.S. the brand national marketing long-term very new year-over-year. increase These digital Tempur-Pedic performance continued products search in quarter, interest in and Tempur we our investments and with support

brand Stearns the strong investment in also awareness Our and to continued in expand Foster marketing performance U.S. strategic market. & and of distribution product drive

completed earlier Foster rollout our collection We & the of mattress all-new year. Stearns this

customers. sales growth consumer-centric and resonated opportunities traditional consumer, connecting enhanced driving with products premium innovation, elevated premium innerspring innerspring with step-up new these see to continue The are design year-over-year. We the

ASP the thrilled are up high-end We that performing digits & last and our Foster are double year. product is of well from Stearns products

strategy and & Additionally, year. interest Foster up e-commerce for XX% multiyear our Clearly, & this our search Foster were Stearns us is and for traffic retailers. Stearns working well

is amid well our the and solid performing backdrop. international sales macro growth driving current Second operation highlight,

successfully over new our international of We Europe new the Tempur be products key launched well launch the nearly rollout XX have in completed being the worldwide, end track markets and markets in are The will year. the lineup substantially in Asia. received. The and all before on completing is

both is outperforming record also has the operation versus Dreams, market satisfaction. our Additionally, performing customer in and broader sales, U.K. retail well

the This for highlighting the demonstrates our team international quarter's performance the strength international strategy long-term and operations. opportunity of

consolidated step gross management to Thanks of improved supplier fluctuations, on in which This adjusted gross driving a significant towards Third, we're operational After year-over-year. the significant worldwide, pleased disruption multiple and basis overhanging, XXX are is years rapid report laser-focused commodity the COVID of margins. team year-over-year contracts compressing macroeconomic remains and expansion achieving. pressured margin improvements. improvement margins to successful margin consolidated achieved we point towards normalized inflation, profitability,

gross The driver our on to commodity first pricing margin is our inflation. improvement offset ability to pass of

XXX commodity a we historical pace. basis between increased margin XXXX prices may compression points and at experienced approximately of you As recall, XXXX, as

pricing have started changes prices the that normalize. been Now have implemented, to commodity

You can statements. positive our results reported see the in financial

innovations in gross scale our Additionally, further expansion. we're and optimistic drive market margin product that will the our new

approximately needs margin to is levels gross operating XXXX, we The of above met we periods operational disruptions. invested during chain In ensure supply million normal our second $XX driver improvement efficiencies. of customers'

XXXX, of year-over-year were maintaining third-party contracts, significant on supply to put retail and and efficiencies. labor half in the While relationships in the strengthening began period productivity pressure our our to margins. Beginning during improvements these logistic actions uncertainty drive that of critical operations back

on multiyear our we'll operational ahead, remain reductions focused look targets. and we achieving cost As

our driver to brand improvement and margin is mix. gross Third product

softness resonate momentum in current our the at a Our are mix consumers of new favorable premium less impacted benefit We're products portfolio. the market. Tempur the also driving Foster Stearns and & continuing to high consumers, premium are as by end with seeing

ranked customer satisfaction Award in our made morning. is with Lastly, highlight J.D. Tempur-Pedic in online #X report. mattresses XXXX the J.D. Power Power final this the the announcement we

fifth our a J.D. mattress category We online awards. for and the to of Power's thrilled of for year are at this the consecutive one achieve winning third year least distinction row in

I'll call to Now our statements Bhaskar more to financial over detail. turn review in the

Bhaskar Rao

of consolidated Scott. third In billion, approximately per sales were $X.XX. you, and the XXXX, quarter was $X.X Thank adjusted earnings share

were results we these believe slightly our competitive continue market. our expectations, outperform While below set a to challenging in we

are the Firm disclosed forma previously adjustments connection acquisition planned the incurred of with approximately have facility. adjustments with in are quarter, of to consistent pro event. of We all our costs terms which senior million the cyber These credit the related in primarily and of Mattress $XX

X%. American operational American X% On by favorable partially the adjusted channel efficiencies, offset declined declined margin North sales commodities improved the Net robust by XXX deleverage. channel third North wholesale basis, to very Turning the results. direct and XX.X%, quarter. in a declined a gross basis and reported points driven X% to

XX offset North driven by in operating margin by investments XX.X% adjusted American bps growth gross margins, improved to partially initiatives. improvement in

to sales on X% on increased International. solid a XX% net currency International Now a a reported basis. very turning constant basis and

compared XX.X%, basis and a International leverage. margin mix improved by the to driven gross As prior favorable our commodities, points robust XXX to year,

points offset investments. basis Our to International partially improved by XXX in gross operating margin margin, by XX.X%, adjusted improvements driven

continue line trend largely prices Global commodity in expectations. with our to

to year, the from elevated continue though XXXX remaining the levels. significantly favorable We expect of commodity for remainder prices

signed agreements recognized benefit relationships certain benefit who suppliers the we our to addition of gross favorable commodity scale markets, multiple with will global term. have our over the momentum. In long have These margins

Now flow moving cash on items. to the balance sheet and

while credit debt flow, cash our months business we first few model and the facilities. successfully this to highlight million With credit refinanced operating approximately in down under providing debt billion approximately flexibility. I'm third $XXX pleased the $XXX paid X operating last the that X.Xx, financial have X we X have to $X.X over $X.X years, senior million. was refinancing, of our weeks, of end proving the the consolidated credit banking and flow financial our funds company funding, all realized of is within of our have cost net our extended range leverage facility of current target maturities, In quarter, over meaningfully and billion, increased year. flexibility in our our commercial our the At was We tight We cash the a potential this improved debt maintaining has ratio third Xx. clearly generated over market. total quarter historical last what of

terms of purchase we expect closes, X be acquisition the with leverage close, our reported, we pay we of and suspended deleverage cash Mattress and repurchases anticipate agreement debt. Over we interim towards down authorization period As to significantly plan temporarily between to under the this share our as we the to ratio repurchase to our as between the transaction. use have we Firm, previously under work closing X.XXx. After sign

now of We EPS and the guidance. $X.XX XXXX Now $X.XX. turning to be in adjusted to range expect

reflects the our based industry our of new which midpoint have includes year-over-year the global We revised range, maintained consistent digits our key digits year. launches initiatives, low prior on of sales the This volumes execution with U.S. of double single uncertainty. will impact $X.XX that The versus prior the our down pricing. wraparound updated and annual expectation be expectation is product high a and guidance of

midpoint of $XX brands adjusted of the All the range, of of we results million year. approximately continue in consistent marketing and prior record spend support at to products. our and million $XXX advertising new approximately launches, for Sales the $XXX leading million product support to year as investments with this and EBITDA

I versus should expectations. reflects out point that exchange are rates the our unfavorable range previous EPS foreign adjusted

previous now XXXX has current an indicating Our our our fourth contemplates versus EPS adjusted outlook for FX expectations. headwind, quarter been $X.XX reduced XXXX

primarily million following quarterly the includes XXXX considers of facility. to XX% representing a our relative the of Our growth, $XX of $XXX also Crawfordsville a of fund which CapEx of approximately million, guidance increase $X.XX, allocations completion capital: and to dividend

to $XXX approximately annualized million maintenance of by would of Going gross spend think and a million. of return CapEx $XX driven more forward, CapEx as million spend. spend of normalized expect we approximately our We to level $XXX

Lastly, I to modeling items. would like a few flag

million rate shares. expense million, share of count D&A million the of diluted full XXXX, interest of and tax XX% we on For XXX.X about $XXX year a to $XXX approximately million of $XXX expect a

I'll that, the back over turn call Scott. With to

Scott Thompson

Thanks. Bhaskar. job, Nice

expect Firm. the to our update which robust the we quarter acquisition of are responding we opening questions, the me Commission's for Federal brief let call fourth expectations, request, Before up Consistent second of provide XXXX. in our complete on Mattress with a to Trade currently pending

to the We to expect XXXX. mid in continue late to close transactions

Firm's on closely their with an numerous our financial topics, is their We updates leadership expectations. continue report received most year-end team. to has X early Their will audit preliminary results Firm results fiscal including fiscal when their line performance. Mattress We in likely in complete, and December. high-level work with Mattress are October

closing, our multi-branded look retailer Operator? joining a one Mattress including to to Tempur key ahead make agreements relations Finally, supplying signed open May, Firm. summary, These Firm existing I'm to call post progress closing. with regarding announcing Firm questions. close Since acquisition planning numerous I'll ongoing. In supplier Firm that plus additional post relations pleased the solidifying close. are continue Firm supply on contracts Mattress expected towards discussions closing share we the suppliers are company for has and as and transaction team. Mattress not the with for supplier the the expectation And the and currently Mattress for supply joint up Sealy that, agreement in of with in with consistent Tempur our Sealy Mattress forward few to continue progress is for track, A

Operator

the line [Operator from Instructions] Sachs. Maklari Our question first Susan with of comes Goldman

Susan Maklari

start we talking don't demand environment. bit a Why about the by

the Any balance note things bit about a how as year? comments, your during sort you're a the in some this felt thinking more of in And had there? little the progress quarter? And we than of quarter -- you through the you maybe color obviously, things softer that talk in about trended anything how business but appreciating think can gave I of anticipated. the

Scott Thompson

then not our think the Sure. question operations a all, streamline further, directed was I mean, your And towards Canada for kind Thank overlook had in quarter. solid. I quarter, America. more good Mexico the of growth question even you really North is question, your that team to first your Susan. great of And solid let's and International had

your So kind question our where of ratcheted which focused is market. is the down U.S. largest really is market,

gotten trough. the about we deeper. As which the the far periods, holiday the in probably the I the during that have quarter as the non-holiday same the in in trends saw offset is we quarter haven't talked seeing how think we're periods quarter, in enough been then second growth periods, third strong progressed, market. But to holiday And troughs

kind slightly I'd in-quarter the of we'll before So of higher the used during That's would call the the trend. fourth what that It maybe the the with and expect to period. business that troughs seasonality holiday quarter. be deeper call the -- trend that would continues be we incur peaks normalization that same COVID slightly to in

asked the from we're working that, that thought pull talking slowdown general with although some wallet probably ensure think a just shift. has it well great you also do was been I as never forward volumes industry the think that U.S. pullback been are currently in like making or and sitting that standpoint, industry general, for where you demand. big in of has I here of at some through decline really we're from There's a kind of economy, we've minor in we unit recession in and COVID, quarters, know, mean, I has X kind the in number. to

biggest And as and analytics to to why and understand historical really a the and such lines. look through the know, got on that that what volumes smart having think go ours industry lot the in looking is industry industry a the it, advertising. slug we've advertising, of on I is both off lot effectiveness the and we and tough at you a thing as trend working people we're goes compared of at it our try is of

top-of-funnel yes, you at a top years their the funnel. they've retailers, both the advertising an think is XX%. over is the from XX% last to what standpoint probably the issue retailers of XX%. and of that of bottom manufacturers when funnel the from advertising if retailer advertising the bigger into I the of moved from at reduced plus XX% look to mix it, at have their you the of If But advertising XX% The issue. look last to look you bottom dive the a the bottom, is standpoint, are manufacturer have down the And top to and And down their also X X you from funnel. the people moved about of probably and advertising manufacturing advertising a over that's of funnel the years doing moved

happen is what's we're the in means the and customers trip the into what So enough mattresses their putting all fighting about for does industry. few triggering that customers of That mean? not funnel, we're thinking the that in on to kind funnel going

advertising means you retailers, enormous top the funnel. for off I of the that's total in dollars advertising down and with the funnel play you manufacturers mix include If XX%. math, is that taken advertising traffic. of think it's When And for the top an That XX%. plus problem the the decline down is big change, in amount

I like other about. think than that's share the and actually of people bigger wallet that to things issue talk

expense the from Now we've we our advertising industry in our continue not support standpoint, a to as cut. manufacturer

funnel helping forward. are pull the So not see you not with the us manufacturers other cutting, can clearly

moved funnel, help of them we're is we're with back analysis, We at kind track about the looking it it's what some walking the major this them working doing talking have of and retailers retailers to them. and to on some with and through industry resonating to that. And get other the of we're bottom

some and large relooking retailers their dollar at And amount. are mix of advertising the

Operator

comes question from next with the Keith Piper Peter Sandler. line of Our

Peter Keith

margin gross nice expansion. really So

And to was you're from did and me in surprise investments. that others the some I the you think I growth growth SG&A. think making reference

some investments little QX? So detail of And could are? these there to Is you maybe what changed unpack a bit growth anything accelerate? with what

Bhaskar Rao

Absolutely.

continue want brands to Scott of that one and our support So things that the is to products. mentioned we important

that believe itself is showing we that, that to advertise is advertising market outperform and continue we to continue in share. what capture the and we So

unique very of So experiences locations, are on that strategy. And a shopping specifically type tail very those. unique very Tempur to those those say is our remain piece positive doors, that I is What imagine, long retail and further would you of as going be our on can constructive that identified advertising. opportunities. own have We've we store

what's selling you those about the continue growth are Outside those marketing pay out those through in of to as about about the as as we things and things, that's to think and that stores, dividends you in as think flowing investments So think well. years. going

invest going are to future We in growth.

Scott Thompson

our far said. consistent did getting felt competitive Yes. we're strengthening about some what as and gains and call stayed at make those I growth and doing stuff. mean When worry to take I'd track at market with Tempur we we start-up position, our to not advertising they're plan. and we there that's share We we on with back new And investments, pull we're them. But what short-term what quarter's things earnings. as those some we like are stores continue look costs the should

Operator

line Raymond Our of question comes next Bobby from with Griffin the James.

Robert Griffin

market that just flow things in out and in our costs XXXX repeat out then mind? for maybe Bhaskar, this might a or all next keep can the in product we from should to really investment clearly, in side, and highlight a a that XXXX dynamic didn't from played the year occur help other look is here. out, look not you of at of asking model and also expenses anything think own year we that this there And kind that us flow about should when that about of year? on But standpoint coming very the predictions. maybe you you standpoint I'm few cost XXXX guidance. not in We'll aspects a make

Scott Thompson

and start, up. and probably clean it Sure. Bhaskar enhance I'll then it will

environment. that a And that's the the statements. has for Look, margins. in this kind on think few through a quarter done beginning that to on conversion, of like of normalized. issues. beginning is getting in one mean, the thing and you're that metrics. because job operations last efficiencies. to really back the We're the And used to we supply highlight really back look, commodity we're the the is it's very operating AX in focusing chain all mess that historically mind our flow operating team see do issues, financial efficiencies changes, first an years, operational driving to tough I Well, staffing a I we're a to great the we're really quarter jumps

that going see to optimistic internal an you're in issue, that that's So to and XXXX. continue I'm

I of International highlights big think group. you the also is can the sales one see

cube of talked them this operations took [ an from again not ] project, we've that about efficiency As which and through standpoint. from a got We're project. lot off energy focus

So I'm expecting operating marketplace. resonating plus the is the some product efficiencies internationally, in

was growth, take, of group. Bhaskar, think international a it that. in or market think complications, geopolitical is I like a product give the the XX% we'll about it. a This international for at call time And high-end

to So product operation it's the ASP what leverage This get sales. higher your we're head? they just are expect resonating. in thrilled. Bhaskar, is the of off We'd international and from top

Bhaskar Rao

think to the then those those think number a of the it, gross should see continue. way I to from we right growth and line operations a about initiatives or drive all top tailwinds the are standpoint, margin

Operator

line Bank next the from of America. of with comes Our question Haas Jason

Jason Haas

What what a turnover? the to levels? curious to light think it housing industry we to see unit see to is take is question, of to more your think need previous to there? you Do think do needed in Do to going more Scott, industry Is get back you time? key pickup get could in if advertising? we you for need a just I'm say comments you normalized

Scott Thompson

Yes.

other with their on hoping funnel love all we low think others on back fell advertising pulled some and advertising people. I draft to in

don't and bunch have betting successful industry think up a an to to about. when advertises. let's the beds. you customer the X People wake And I day say is of buy think it industry trigger the go is very that

mix so people a think bit advertising mix fine-tuning. it's And I -- by of lack a primarily a little probably a of and

product see if not would it's there. share. mean, you historical what look, gathered And where Stearns at our that look in in & Foster advertising Tempur secret. I than market dollars point a to, we've lot done done. you We've Sealy also think has higher any of I I

that advertising product there. But is have So we've Yes, the you proven the to Sales advertising works. in got is great. great. team

so, advertising yes, the And key. I think is

doing at on retailers funnel try their issue, hear back to aren't and other little We've in investments aren't fighting the traffic. to that manufacturers the productive. grab like the that rather and than -- Sealy them talk people waiting kind And to or work funnel something had manufacturers the in get the customers just the and top You'll working really getting Those is off everybody the to And slot slots marketplace over they last end. Things are dollar done. of about journey needs some minute, a try all bind that Tempur bit purchase angle. has spiffs.

Operator

Our of with comes Basham the from next Wedbush Securities. line question Seth

Seth Basham

bit more supply the I was hoping color agreements for little around a about. talking you were

proposed So supplier new even because Firm? acquisition the are agreements you're we Or signing to benefits these new the Mattress gross XXXX? margin supply suppliers with independent? into to one how of those beneficial or of the you are And about think from should these existing that you mentioned,

Scott Thompson

Yes.

I supply One uncertainty and largest decided agreements minds. we sign in with these advantageous some their It Let to mean ahead Firm go and is customer, is be an it suppliers, some Why suppliers, that? of those. other did and me talk we post-merger Mattress think those it we're buying their would has Mattress creates about suppliers. Firm.

their to refinance need debt. them of Some

need of staffing. Some them just out their figure to

of Some lead long these have products times.

have have order to in to we that seemed come appropriate the sure make medium contractually in so both together, minds go looks it parties and arrange like. and market, ahead a And what a stable

that non-Tempur floor that gives RSA's have It of firm our they're a some going good us got also and not to It's also multi-branded going us Dreams with supply It's to the mattress them. service because have it certainty overseas for if Sealy place comfort non-Tempur we've our business we're also enough customers. signed, plan, disruptions. And get to It the any the executed. the Mattress Sealy To for to products have suppliers not gives with to folks we've contracts that got good going it's So we've is out. the an put shut But consistent business also extent are being plan concerns, has standpoint. that or love plan friendly FTC we our to is FTC they the suppliers at from not our demonstrate market. anywhere here. that Firm else. contracts in It's business

Operator

Our with next question from the Brad comes KeyBanc Capital of Markets. line Thomas

Bradley Thomas

was hoping bit I the get out student to about leading look been of Housing little slower. loan a I and Obviously, are higher. Scott, of could as ramping interest has your headwind. you're of how indicators be you of XXXX. kind rates a industry going could some payments of blush like thinking first the the health Obviously, consumer, the

on you And if help industry your us early might of take So that at the environment? challenged, how can kind Tempur XXXX. think if curious about in stays all, change strategy,

Scott Thompson

at But why from be we're the I industry, we some are let so think that see headwinds in standpoints. there there. in and some shape. That Sure. headwinds the far think got good -- want bottom historical Look, you to on already you are those in XXXX of or certainly don't we probably agree Those sand. macro should all in and we've are points if the good look underestimate we and head that our the

advertising. of think standpoint from is some industry this our self-inflicted I from on execution an

think or around a in bouncing down, took a down bounced Probably industry get bouncing you bit the the a little further term the probably either used the step little bottom. bottom around the does XXXX nothing in on of bottom. But I've So would me that get slow market that you we share. that take for not for think to would mean the Tempur the looking recovery see in marketplace I been this we've going that continue make industry. What Sealy? I in

issues finished -- what help as I will gains yet, without I I internal XXXX think the share I EPS there. a we'll cost into then think standpoint it a call XXXX issues when mentioned it's Top call, if is down think market it, a optimism And line in earlier we to with look feel But call offset we'll it's at. overall more know little -- haven't I don't got looks get we're to, even our budgeting. like think as market, coming softer more our be we from so relatively there. that volatile And some we've on some I But to gives us control you of appropriate. that when comfortable going going details a

Operator

next comes question line Our the Maheswari with from Atul of UBS.

Atul Maheswari

why, your who in incremental the competitors why ultimately question a getting it of and who share that what the product the gain you ones have X-part keep that some really we risk and provide then marketing And continue position is from TPX might from all share the the catch are gaining is who of is the where then at strategy given the robust TPX share to TPX been different? already And some opportunity fresh share? the to Scott, related question. your investors to look then up color that, U.S.? Can that disrupted? Scott, the is story, a taking is on is gaining and how So on a who

Scott Thompson

detailed Good Sure. question.

to International all, don't of the want First get I market.

amount reported So first large just internationally, with a of competition there. share, this all, of obviously, what taking quarter. of we Lots

So talk each us takes to going because all through it country. we're to go about day it not

of is more the bit let's all U.S., question towards we're really taking to okay? I focus share a world. but U.S., I'm good on around internationally, forget, think not pointed the going your the So So

for think to I when I So think from second, apologize U.S., this the I go is you a we're everybody. taking share

player low group. down, call But was I smaller think in there somewhere it, be the the might we digits. I industry think a think double

Leggett. far I off think what that's our over at not friends

others of I number. we solidify perfect their as report can and think that numbers, kind

terms. And industry, the talking if the down like call call in U.S., so were just X for we down or X? And XX% Bhaskar, you'd let's it

Bhaskar Rao

or X. take Give

Scott Thompson

like Something that.

play you don't with tough I share hear sales means that competitor really us. I if had another So a When taking on time. the from sit that calls, numbers, other competitors

seen the bit gains will base I've bigger percentage then, believe little have gains. of the some sauce? to I good made smaller. there and XXXX. would stable. are industry significantly of short-term over are sales But no, in continue I further cut internationally. When optimizing been customers departments share But detriment we quarter, in beds make have and I as that we our expect and think dividends staff in in We we quarter share the this stable -- don't it everybody. of decisions And We We decision. a how So works and think pay has times retailers past, I've there's people our we this I'm invest taking share corners. mean, too We discussions quarters. I been their and the most got It's going will to advertising the from times optimize from long-term a say take productive drives advertising, some the marketing our doing also product. and share to think to about is the in force look, don't secret. what in great very invest big U.S. our don't us take decision it's money our is I and reduce and by our secret our And the that we a At stuff will still probably We've bad or base the what's is our probably people, not asked industry. certainly I recovery. very And in our some we're the put In and kind product. advertise. that with the and said in in and the we've share expect in about you point, to would that probably and been were during at what times. We would it XXXX because we

discussions position. have We optimizing about competitive our

that's hopefully, So helpful.

Operator

Hughes line Truist. comes Our from with next question of the Keith

Keith Hughes

numbers. of be bed you [ there question we're can organic I new talk to had the that versus Is International. that out the to influence about starting a X% Dreams there on enough growth, Amongst feel And product launches. the affecting ]? how

Scott Thompson

you actually for direct that because question great Thank a Yes. it's story.

I durable They the in very actually maybe the growth which had a what job. really home world. that in able is toughest we're done it budget they you a done around you, continue of hit standpoint is the the U.K. told to with is to indicate be execution. I Dreams team has As from sales quarter, gains. may team just fabulous market, experiencing outstanding a had significant U.K. market And acquisition, the retail and mean They the and tough. has EBITDA know, their one market good share tough should the for market

doesn't coming So on that it products product product standpoint, market in the Tempur only the U.K. because really do U.K. to the some the there's requirements fire have have new They major not new the special actually there's

a it always So last takes are -- little they on it.

of their make actually good but still a is product they'll in for the to a beds. the would they gearing they're tough a first with got other done product, have study, you market. want Tempur from of do, market, competitive business people new They in solidify Really call I'll So which own start tough bit really own coming. But what which plant. year dealing up their new part Harvard their next They've a position. boy, some

Bhaskar Rao

and outside a market. the of the in very is saw Dreams, as well new tough of Dreams outside resonating product nice And with consumer, we growth

Operator

the question Our next from Loop with line Capital. of Laura comes Champine

Laura Champine

internal a commentary us which the Mattress mattress quarter? industry the the expectations, commented down met privy appreciate of Can to believes that Tempur versus how just was give digits in I industry, that the double low not they're but you sense think those. being you Firms your I tracking

Scott Thompson

Yes.

been the And expected. particular Firm has our has would I this also future actually than previous around I'm I performed But industry we very guess, from in Mattress U.S. look, I clear Firm to respect That's partners. has say expected say could than comment. Mattress that words it, economy. better -- some I put trying my appreciate but think me would words. Let these I -- we worse have

work on. I We'll company. they've them join let well. to probably But done you're thrilled think helps certainly report. trying the to that reconcile them what you And no, to have we're

Operator

JPMorgan. the question of next Carla with Casella Our from line comes

Carla Casella

the of Can what commodities in or pandemic. some but improving commented break above and still a of there bit, it normalizing that you on they're are how some the You well key that little you're terms are bit a commodities just seeing? down

Scott Thompson

Absolutely.

that I the price. taking standpoint indicated we is that commodity the to framing been we've is about inflation way think able a from cost So just historically that cover the through of

a math However, point. standpoint, approximately that basis mathematical from issue, the margin, a XXX meaning created

-- takes. be from off to is think we're that about really way The its here lumber, whether peaks about is today, we commodity think of Everything sitting I half that et and and cetera. definitely steel, there's puts go. overall standpoint, still a chemicals, So

started a However, journey, you go. way still where this look we at there's if to

they of our to that the another which is the and we make in that sure major also story work we that commodities company standpoint suppliers there's not understand a the and is component continue potential is to suppliers, that momentum from of our story, itself However, with have.

couple seen over last from yes, bits. some So commodities of tailwinds we've the

done entered very the from standpoint. we've and to on suppliers giving, is contracts but that existing only relationship, what strategic win-win relationships also that as However, a relationship standpoint, our see commodity a gift benefits with an we've into keeps from EBITDA ensure to a not constructive

Operator

with question of from line America. of Next comes William Reuter the Bank

William Reuter

bit a customers increasing demographics? There's different if some little about clearly results? seeing middle wondering of talk those I if you concern And levels. a of debt experiencing bit lower could breakdown income little how your start between and income trends may to sales be you're impact your that about was

Scott Thompson

question customer few there's that challenged. the with entry-level is last no Consistent the Sure. quarters,

the be our share would market. that would better. not which and And are entry-level Tempur it especially in that, high-end really again, higher we're customer, growing, entry-level see is end U.S. big Foster Tempur. we We products the markets is & customer the well the doing have you real doing current talking entry-level where Stearns and Sealy active call product, Sealy But pressure, in Posturepedic and

Operator

from line question next the Our Securities. comes of Seth Basham with Wedbush

Seth Basham

follow-up. a have just I

now. than about by Is to You responding this timing you'd talked guys that longer that respond on done expected? be quarter. I track all being previously thought to with at to

Scott Thompson

I complicated look, a obviously. process, say, it's would

just fourth have X, clear. probably be million quarter. time we the We've documents, probably provided maybe very would original substantially weeks to think the be we over X always complete We're said X the with I that start. in from government off the line at

Operator

I'd this back Scott remarks. the you. Thompson to Mr. Thank to time, hand At for like closing conference

Scott Thompson

This and you, successful. brands, the our thank to and over your of thank confidence the company our partners, of for lenders, you. Board. in representation XX,XXX every retail what Thank in -- for employees our do day to leadership ends you outstanding you company make operator. To shareholders operator. the leadership today's call, Thank thank its To you you around world, our for your the

Operator

you This call. conference today's concludes Thank your for participation.

Everyone, You may now a day. have wonderful disconnect.

Tempur Sealy International (TPX) 2 Nov 232023 Q3 Earnings call transcript