TPX - Earnings call transcript Q1 2024 | Tempur Sealy International, Inc.

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Operator

Good day, everyone, and welcome to today's Tempur Sealy International Inc. call. [Operator Instructions] Please note, this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Aubrey Moore, Investor Relations. ahead. go Please

Aubrey Moore

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

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

provisions These in Form business. forward-looking including and of only XX-Q. forward-looking forward-looking materially discussed company date statements company's factors due may annual quarterly its no affect The Reform statement subject made. safe the forward-looking Securities This call undertakes factors uncertainties adversely Form any filings, of XXXX. statements. and are the that on Private These obligation includes SEC company's the of differ the is update which variety on report speaks that XX-K involve to could on of Any to are the a it harbor statements Act as results Litigation reports actual to

financial information SEC. accompanying of which website morning's include Reconciliations the company's the and this commentary at the on information. found investor investor.tempursealy.com financial non-GAAP filed non-GAAP press posted be on with also will is This release, can

Our with comments Scott. is introduction, the will pleasure in over my that call turn to the it release. And information the to provided press supplement now detailed

Scott Thompson

After an turn thank call Thank I'll quarter the then that, Bhaskar of us close to on XXXX provide the the to over Aubrey. begin from you earnings to detail. which with morning, you, the proposed everyone, on financial I'll Mattress by Good and and quarter call. joining for our first more our some highlights year. Firm, acquisition expect we review in performance our update of end

Q&A. for Lastly, I'll the open up call

$X.XX. adjusted were billion, and net approximately In the EPS quarter, sales first $X.X was

strong $XXX million, position period with competitive evidence adjusted in our of last year. EBITDA same market. the These results are Our the was consistent

Turning few to highlights. a

in bedding markets to First, high-quality we launch and all continue products the develop serve. we

designed to Adapt compared our and Tempur impressive material. need, consumer material address standard They refreshing alleviating are are These Tempur the pains. portfolio relief innovative aches an products. actively to products U.S. our most with pressure to and fundamental in engineered are latest We our feature improvement XX% provide

mattresses our a are sleep we rolled rollout system. Day. retailers Adapt and the mattresses out advanced adjustable substantially our basis, strong. of are from third-party our proven and When combined is operations is on range comprehensive Memorial over smart be our The result expect of XX,XXX with direct-to-consumer by Early reports to retailers to schedule

heating priced recently also, national select at customizable cooling sleep ActiveBreeze, queen base most and We to approximately system, retailers, $XX,XXX our and for rolled out set.

This system and both benefits climate discerning the to management offering cutting-edge the ultra-luxury seeking solutions, active Sleeptracker-AI. caters of consumer sleep

effect, that Our of generates and reporting offering interest halo third-party our of Tempur our showroom presence company-owned propelling are the Tempur a top-tier the floors on product retailers the towards lineup. this stores

Although with is the upward products, still tickets in early the of ActiveBreeze additional driving rollout, $XX,XXX. when bundled some

like challenges driving product, of with perception While modest brick-and-mortar the in Please this the innovative we future for brand category. traffic, momentum lies sales products the elevating retail our innovation. that reduced note ultra-premium its and in are bedding anticipate significance volume foreshadowing even

increased Excluding to price products and on sales sleep. provide year-over-year, mattress the brand our increased innovative willingness the floor double all spend attach mid-single U.S. quality to of better impact across our designed night models, digits, demonstrating rate average consumers' digits products

in business. our momentum building international also are products New

consumer-centric collection spectrum expanded of that innovation features, a customers. new price the Our product range of needs an meets broader and

of Tempur fully launch our the bases out executed pillows the we all-new quarter, mattresses, first in and rolled bed now U.K. and the In are worldwide.

across customization various the unique meet of us of facilitate higher channels. to demands Tempur level new manufacturing the the process, beds We effectively to mattress a also consumers construction allowing while streamlining markets optimized and

marketing brands compelling in and invested products. our support Second highlight, to we

new our ad exclusive We category continue resonating and quarter, and North the consumers and relaxation we throughout delivers rate launched trouble our consumers' These Tempur interest products. digital purchase and outlets recently are Tempur-Pedic focusing and which meet Ergo expansion to people consumers designed an mode SoundScape -- focused feature, developed the introduced Base falling immersive asleep. in media first attach In APS drive America, on journey. strategy, driving in broad-based our their retail balanced ads ProSmart with partners. we help ASP a have the be for on experience to to targeted to its In new already with who both creative design

quarter, TV support second one these how new the to provides the solution of a sleep, the our with digital lineups to assets barriers pains. to collection focused on illustrating we In quality leading and targeted aches continue and spots Adapt

Our consumer are content this put new these we're new research that market. highest date, our ads to assets shows to excited scoring and the into

products Foster reinforces We messages of years. and that invest continue that been advertising XXX also quality support comfort, superior brand with our has the to hallmark to the the Strearns craftsmanship over engaging & for in

successful recent advertising XXXX. the helping first also As investments brand year since introduced achieve to in the with Stearns consumer in & our successful, case our Tempur-Pedic the been year-over-year excessive traffic has every we advertising, stearnsandfoster.com have in to television been growth Foster

investments product of industry's helping we highest Tempur to Google Search volume. year-over-year XXXX, continue new the to recently support Internationally, range. our brand marketing our increase the positive launched in growth to the And achieve in momentum

all highlight the reaches covers relevant and generation Our latest creative materials, many of the Tempur media channels. assets of all retail assortments benefits

and of search, We continue sessions see retail results positive to awareness, with in uplift traffic. share web

we that reaffirms intelligence retail market challenging are environment. a in market outperforming the Our

host as our stores David The key markets region. Beckham for for assets, the in an quarter. second the material other in key Asia high-growth will recently content campaign during we Pacific event go also Asia We We'll newest our and in retail signing consists Pacific partners in television our China year, David online Australia. March brand partners. point-of-sale this later of Beckham with The of our and the in and announced and campaign own log channels subsidiaries ambassador, launched retail for our

in to near-term to break sales long-term at efforts brands. their through worldwide build continuing points driving our all Our are consumers support also while for journey, to designed purchase advertising

shows seeking research sleep brands our be of consumers continue solutions. to high-quality for top that mind Our

to continue optimize expand we to omnichannel to highlight, our shop. diverse wherever Third want and consumer they distribution the platform meet

largest our channels. Our in brands in with we with betting into existing gain big-box and relationship labels April, to large our specialty across the the bedding OEM quarter, retailers. new retailer. traction products additional and wholesale stores first private In one And continue expanded the expanded a we segment U.S. distribution of

through also product and e-commerce Consumers presence. with our company-owned our stores engaging are

e-commerce Our direct solid robust growth business. in performance a North strength channel X% sales by American was delivering the driven in year-over-year our quarter,

Finally, continue and in improvements through to we sourcing efficiencies. operational year-over-year costs drive

of optimizing During productivity combined impact the quarter, our the team point resulted These XXX gross with America adjusted commodity basis and improving gross first first contracts, to in adjusted operations the International's benefit XXX margin quarter and North logistics. margin. on benefit basis a labor efforts, prices focused enhancing normalizing quarter supply point to

Bhaskar over turn detail. With to call more the provide to that, I'll

Bhaskar Rao

you, Thank Scott.

share These first the adjustments credit costs was $X.X Mattress pro terms connection to in acquisition of approximately XXXX, with the mentioned, the As per Firm. primarily and quarter all were earnings forma incurred of our adjusted billion which in of million approximately our facility. consolidated are are quarter, adjustments senior $XX of $X.XX. planned related sales There in are consistent of with

points changeover prior operating channel the was Turning year sales channel and operational partially direct XX.X%, the to basis, costs. improvement at new to the to to growth declined North efficiencies Net and margins On initiatives. and commodities costs basis launch wholesale first OEM XX.X% gross in offset results. American quarter. offset by driven support product X% American American consistent North in investments gross North by the grew X% in margin, declined by adjusted a XXX adjusted driven reported margin improved by distribution X%.

Now net basis. X% a a on were constant to on year-over-year international. basis turning currency declined International sales and reported consistent

operational to International by to As the efficiencies. prior improved points margin compared our XXX driven year, commodities XX.X%, basis and gross

improved operating the in growth adjusted points in XX driven basis International XX.X% margin, gross to by margin investments initiatives. Our partially offset improvement by

first items. million, Xx. leverage We the under less Now was $XX operating billion, our ratio X.XXx cash end X first $X.X the moving debt and of on cash to within flow generated facility was to credit balance quarter of of sheet our At $XXX million consolidated quarter, range of our and record flow year-over-year. an target historical cash improvement

finance of We and of started the Mattress is execute our to capital. have which flexibility, to leverage transaction, Firm consistent history financial cost strategy balancing our of with already elements

the to after quarter X.XXx, XXXX half of We borrowings be loan successfully and to credit We in between net anticipate incremental closer raising leverage and a closing in facilities the expect extended executed transaction 'XX. term the draw delayed and first of in late expanded X 'XX. of the our and a closing assuming second closing

to leverage months expect our Xx return first of the We X to XX to after range the ratio in target closing.

in adjusted range, to rate At market. the in turning the robust $X.XX. challenged Now to previous expect $X.XX year-over-year guidance. EPS expectations, we the of growth with to a of 'XX be range a XX% Consistent this midpoint represents

the first based flat which U.S. in versus half of second considers also prior some is expectation year, 'XX. versus to sales industry are recovery our down increasing mid-single on and unit slightly half Our headwinds the in to This volumes XXXX. low- guidance the that bedding the digits implies

Our leading $XXX spend support to we won our continued of recently product sales new from outperforming continue launches. industry the success new distribution in products. million as Advertising and U.S. the due and the brands to approximately

adjusted of range. billion in $X resulting EBITDA of approximately midpoint at this of All the the

allocations considers million, and level normalized of of are guidance And from million. dividend by as CapEx XXXX: $XXX year. the maintenance major quarterly million in an This $XXX of significantly a Our of is our over projects prior of approximately $X.XX, of a XX% CapEx years capital growth driven CapEx prior capital spend also of $XX complete. following down approximately more the increase

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

D&A to a year approximately the rate $XXX diluted to of Interest back full expense tax For With million. XXX share count of of I'll $XXX on over that, shares. million, million Scott. the expect and million $XXX call of million a approximately to turn with we XX% 'XX, $XXX

Scott Thompson

Thank you, Bhaskar. job. Nice

call a Before on provide pending me let for questions, update acquisition Mattress of opening Firm. our brief the

completion request. XXXX, with in of announced Commission's Federal fourth quarter substantial certified second previously As the we Trade the

We continue in approval the the quarter. complete anticipate advance work review the to process the FTC FTC and its to second with transaction's to

to we continue transaction disclosed, pursuing close to and proactively with are this contingent a previously XXXX. plan. we in acquisition, the As divestiture to late mid- expect connection upon In

to post-closing offered a supply agreements. we've X also agreements mattress on share agreement are suppliers successfully with us. that win-win numerous X and I'm pleased supply suppliers firm have engaged executed We post-merger of the negotiated with

Firm's financial was We Mattress Firm with the made I'll their progress slightly with for Mattress call ahead on on most summary, encourage transaction for to available comment you results performance. Mattress the their Lastly, industry consistent on open believe to and Operator? website. to forward we joining quarter, financial on up for performance website Firm trends. more good brief U.S. look proposed information closing a recent the which recently we making quarterly review of the the their we're In that, questions. Mattress Firm's team. And

Operator

[Operator our Sachs. we from Goldman Susan Maklari will And Instructions] with question first take

Susan Maklari

I of the how bit thinking together. little to Scott, coming wanted a you're talk about year

we the confidence perhaps expectation that puts we you half. was still guess, into the we're to how a to you your that. I margin takes that may in in year then would line seeing more first in second in the soft balance volume? coming recovery bit of prepared now know the while you what the quarter and top the earnings expect improvement one the any about in see in? by the half second remarks, mentioned through XXXX, the together can a on as come the bit talk And think earnings continue will gives recovery the volumes driven was I thoughts half that be I some and you that move

Scott Thompson

the when -- the Look, confidence look is the at international Also, with back in that biggest they're asked the and Sure. about in domestic get things short they half, question. in back both probably That's first we in resonating for thing easier. comps have marketplace, products half you Thank half. at and the you of a much that than quite frankly, one very the launched, it our we are standpoint. front the have the that look an easier momentum from should been the when comps simple and

data, throughout to the I going of that We question margin would bedding where into historical is data quarter. good also and the last you positive performance obviously if thing I about performance had gross quarters. to we're a think for is year. look at, to of the . I is, this talk say at the the have I your and had the this throw kind margin everyone industry bedding a expect in guess where has have number who that's at primarily in at I'll because that look looked the the a point is data U.S. been easiest industry and depression one is you'd

it's so some And it's or or to whether quarter got a quarter two. point, this normalize it's at whether out

But and normalize normalize. bottom demand. standpoint. continue There's or the don't the a certainly, the we into we the call been doesn't going that seems gainer of back any minor any I haven't relatively just industry There need frankly, market no any quite fairly up of know. products as robust a been that we over see hard for be we've And why reason changes quarters. mattresses. very structural what And time, an reason to And don't It's growth, into wouldn't it changes tell. know, deliver around long won't bouncing any to growth share begin we've believe a industry for that to it number the even then building reasonable pent-up been I'd from should may year. always or if you in half

Bhaskar Rao

that some it we of items takes the some and as Susan, U.S., whatnot, have again, as do distribution and Scott drivers we earnings well. standpoint, relates in volume new margin And mentioned, resonating puts have from outside an the products that to

gross think margin, about performance you some quarter. the If we nice first had in

time a double last back we quarter. more a continue As the to half, go half in well. as efficiencies give that a should but Scott the the some been we'd see half we mentioned, expect us that tapping And benefit That of commodities throughout year us and we'd that of bit now, a about those for speaking year, operational couple back green in the first as first for expect been we the the saw the expansion in we've throughout well. of items. in margin the as year, The have in tailwind shoots

Operator

And our next with we Raymond Bobby will question James. Griffin from take

Robert Griffin

did the Can the talk how puts a cost startup on takes gross quarter the a Did margins, into played as guess really there as of some out and performance I as out? you maybe launch expected? get up play I consolidated costs costs maybe want well a bit of nice to that basis facility follow on Or on the shifted well during new as little segment any XQ? basis. manufacturing

Bhaskar Rao

as it out Bobby, played expected.

that we ramp a So standpoint, would largely capacity we did that, is new indicate specifically in very be from Crawfordsville, with that mode and imagined. what consistent did that happen, had

in would in beyond, As we seeing have quarter OEM, new is year-over-year, did into in specifically quarter quarter, the that distribution, X models, a start out phasing standpoint line but the we standpoint. and indicate we did we'd the from first have continuation year, a and from revenue that. the offset from second expectation more some the the get as played little expected. will largely Also, an that Tempur, we we'll of than second prior in In bit

is it throughout get tailwinds that the what which things as control, continue, So under group, hitting all as it as the productivity have to we'll just historically addressable levels, get operations will go-forward relates be COGS whether back the margin go on the -- is standpoint. year, about for we again, we of what a we then from what the again, from we've driving to driving we think when our expectations out those had, And you XXXX reminder, those cylinders a we what which once productivity. recoup

Scott Thompson

that And it, deliver to highlight to mistaken, of headwind. I'm first gross was mean we little the margin I even I Bhaskar, a margin able gross quarter. bit performance. step mean, solid it in with And headwind, a still if over a were not strategic That's and very Crawfordsville

Operator

with Bank take And question we Jadrosich America. of Rafe from our will next

Rafe Jadrosich

gains just if the quarter? can there? about to you've you retailers? the talk the wanted you that And you how in industry driving, along been first with there's the shelf space additional the on ask think I versus performed that, that made, gains you've in then do those share just space timing of white And some

Scott Thompson

of this Sure. is how And working you're market by out kind in let share when industry perfect performs. and me start information saying, the everybody not guessing and

So this primarily the our about about talk we and talking best -- market is thinking I'll of this. is U.S. we're kind when what call

look springs it, what you other at data, you do about industry that call get if from sales was information at the rounding? if a double you standpoint, like So you for Bhaskar, think XX% look would digits you perceive and down,

Bhaskar Rao

Scott. Yes,

Scott Thompson

And for a pretty good the So round okay, And XX%, to it it, X%. we're to then we're quarter. see size X% down, the market. first call can you of you know

of do math up quarter. excluding else you was and else, have down little can in down. you So And bit say, close would what been probably first a us, probably come everybody to with the XX% should everybody

is base installed second several lion's and get two the secret that's that success call still least some gains share and future more. But fast would for what marketplace, we're a pieces. because us we'll at the say, in second in preliminary be come some after about the which the a asked more kind as on about, slot couple the first important okay, and And and we sales of installed there's That's the call specifically XX% space, there making it call the for quarter, well I share be for Yes, from shelf quarter have come come where call to, productive, we industry space, we'll the X%, is our how we we're in both the the Then come they got of how quarter. to distributed. But we've based talking today, velocity the down other So win-win. you gains base. the would spaces share call asked would most And you of rest us do and data piece gains. in is yes, white gains would When they'll look And really, Then in white were fairly quantify work velocity we'll not on. share it, U.S. white the online new it, there's and a space, still the the there's slot that, retailers. what space. from

more and you lot talk is as every world a space distributed If different. where in internationally, across about market the we're the international not white there's well country

Operator

will we Keith our next from Piper And Sandler. take Peter with question

Peter Keith

Just of of FTC you regarding guess what decision, confidence by was on second timing predicting that the curious I quarter? I the the gives on end the

Scott Thompson

Yes.

we of We the constructive have the me from that's litigation. or through we our we that been a it's on this started -- we're original FTC we're back if clearly first gauntlet based when in look have and this time because go those describe you on to originally need take. say, If very journey always at to we we'll of timing -- conversations And put that original goes the productive. ever the additional need said, all, the to look, line standpoint you'd because disclosed and transaction. always if And road And budget let disclosure that we've like to given litigation, through of kind go it. we've time how comfortable

job answer more of the assumed it framework taking and using important win was was, thing have we important been just the fast. when it get We're seriously that not meeting what would timing FTC through But likely right more learn people there's And most And minds. that's are to certainly industry. finished do and that think about guarantees, principle we'll the I'll certainly the work we're we and who always call, industry think litigation. the the opposed we this, dealing about we we're yet. high-quality the and through more But the the as that they I no more started the to with areas. right do and their learning as litigation we has very with in maybe all have process But

Operator

from with And take Seth Wedbush. Basham we will question our next

Seth Basham

if question Two-part don't mind. you

response on of sales year? this, your If FTC. on litigate a then regarding need started then be in little the we your First, the regarding this expect give quarter perspective and the secondly, do a us to do close you to has off? how cadence can to second you quarter, able transaction the trends follow-up still bit the And

Scott Thompson

is of at mixed cadence, this listen then of going time, a I first go little disclosed cadence The And don't messages. if cadence were think a you question quarter we as be I still kind get this kind those expect when yes. call there's sales There I'm back we of earnings retail, on orders. close is how cadence we question normally break up to answer We it fourth year. in would last time, and bit. sales. which end wholesale buckets, to user call it getting to do. sales the your the to think okay, And two buckets differed to within able I But two of a calendar On the

that retail at think and like. holiday down And I then what too would feels is at One, and information a retail. I think is was not were retail if was that two, March beginning February sales comped you it the of February no flattish -- it I was second market was weather. was perspective, tough; to because Then January moving Again, over positive. a February end because obviously a quarter, user, positive look And January from the say the tough question U.S. period. Then of there's So precise. probably in

picked out, quarter were Day, probably in of we up then about I and slightly of our through than kind talking is you're President's March and down. flattened February retailers as our a like, not were the and a If then orders working and slightly were positive better then I they have in particularly think period. And word up in stocking flattish it in stock our were April. orders actually and Again, it, flat of anticipation like January although call kind the are as I up down in we'll started in non-promotional we'll call wholesale, sales, it

things better in that flat non-promotional go orders been periods. different like than in or during be flat experienced they've period nonpromotional over I are than have trends X negative we've X would during to have Actually quarters. a up. our and the periods, the last, been orders call been it, promotional slightly Generally, positive then

but if I not, So know information that's best or green we have of it's today. a the as don't shoot

Operator

take Michael UBS. will with our next Lasser We question from

Michael Lasser

would can being down low- your low- digits sales to of instead go give that transaction of us If if you in profitability? how back a mid-single does year what are through, the aggressively buying would stock? up mid-single to your digits, not also, this And be you your sense mean for

Scott Thompson

Sure. and worked both I on Bhaskar a bit. little that have

the don't be to noticeable. bit I'll If little capital Bhaskar, that, you sales standpoint, it very not too product, very in is high-end the not Tempur, margin If it, Why take and matters significant. that would probably starter a give we'll are. on sales think, -- allocation. that I then where first, want beds, them decline primarily entry-level more high it the you in, call is is decline beds, around is the

Bhaskar Rao

Absolutely.

somewhere a I our the way thought meaning business about thought XX%. the XX% I being certain about band, generally, as certain around decremental So within or incremental within confines, to

as to XX%. going lower be, the it So it to XX% Foster that. brands, points. If the call from or be from be Tempur, it Scott price call the value, something it, of luxury it, the something let's north if & value mentioned, is would it coming let's Stearns than it's whether comes

those price above if kind if it was get it if value So luxuries. was in same you let's points. quantum of in the in the call it And those -- XX-ish

Scott Thompson

look part close. And you we repurchase would the you guess. opportunities I of and end question, Firm with would our that overcapitalized in not the would was the our decision. to clearly case a capital, . But X but is target, end will to on on stock ask think on price that's share vast be Xx. the which way will the is up it in of think we what will in uncertainty have capital depend price. the be line probably dependent because and get to we money economy. probably in, because in me fairly depend will second high leverage outlook probably to the -- the we would squeeze in that amount that be today, velocity would of would of would that and It going more up your my of which back the we -- will probably time, of on a want a stock repurchase, in Mattress of a were invested accumulated the the be if Board and X has of And what size X, deploy to share that majority do transaction return in unfortunate But of always do, under We reasonable period we the

So we and be it price pretty -- economic but like outlook. would on factors would again, quick probably be stock dependent

Operator

our Capital take question Thomas will Markets. we Brad from And next with KeyBanc

Bradley Thomas

and share about of most voice. wanted continue talking advertising to hear its the is we to its Tempur Scott, as retailers, with And advertising. we're successful that to ask out I

I and competitors trying for And changes in plans about be any the from in more think are to nuances should horizon competitive ad effective do was year? your could on year? you wondering you And upcoming comment, this so then lean a about with your standpoint that the one, you in just number be just we terms of terms any if think could there advertising election, this think there as of

Scott Thompson

think We and the would that biggest talked the because a upping net I would open it certainly be I've in their -- positive, I getting I a our unit the think thrilled And be to funnel. drastic industry the U.S. would U.S. mics advertising. to and about the in why competition the actually economy. this downturn problem, with before that's in is think minor industry people decline in on what is so I is us time

so. love their the help top traffic. think I biggest is pull responsibility store. to manufacturers weight floor more So our that's I have, of retailers, do part would the and which to all the as retailers to advertising see funnel And manufacturers problem into help I of drive hope traffic

think but I some a change "get anything, manufacturers to I game." the haven't pressure there's retailers on So hoping there. are seen other So of in we're kind putting

weird As the advertising there's there complete got and We've bit thinking certain hopefully, will accounted the a we've we've that little -- on covered. than will markets it a it's but at more always for our be it gets for for mess. our in where weird. bit a we far times that Certainly, as a been Pricing be guidance, election. little planning when an year. elections, market But

Operator

our will Hughes next Keith from question with Truist. we take And

Keith Hughes

question The is international. on

in be talk a the the of there about the shaping is to North comps how what bit If year just harder than guidance, you you have could terms up America? in

Scott Thompson

Bhaskar? take to that, want You

Bhaskar Rao

Absolutely.

Scott Thompson

I harder? think it is it's it? harder, Is don't

Bhaskar Rao

answer what would that comp I models we I half, that the you we did One is have about X to ways. can say first would is over. different -- have Well, X in way think

half XXXX of those think models -- XXXX, weren't when the about back X However, there. you

some we did growth. see However,

expectation is we outside think So up the would that of And we Kingdom. mean? Dreams, the wrapped that that have rate with in XXXX have is let's into and consumers it, as our United that about international I that in the all exiting As products resonated is the the is, growth does get saw launch what and effectively we XXXX. call continue

mid- the is geo So call macro that across from market as from our rate When continues pan as that competitive to standpoint. all business is high-single growth standpoint And I outperform that from just -- international, with the is just as set. standpoint, international U.S. to when digit the I a a however, a interesting

Scott Thompson

Yes.

products great business, the got in there's a that the lot I a lot marketplace international space. way the and some more think better velocity slot I white got think we've we've

would feels bedding Dreams was last call that does in little And than is in have comps. be, only section. good. tougher bit So mentioned the it year worse retail Dreams. a U.K. you was the and it The out market

world So choppy, it's bit the Tempur around business some one's a but the got that traditional little really good feels momentum. like

Operator

Phillip And William with from we Blair. take question Blee will next our

Phillip Blee

about compare relatively I did quarter? performance then how for then earlier consistent? in assumptions? for of talk brand shift impact under year we assumptions on you sales remainder that throughout wanted Can mix of Should And here. to gross about should the mix we year? mix remainder first to the how those the this think margin the expect question And to on remain piggyback the your an

Scott Thompson

beds. and the first the you start and to detail, can And I'll higher ASP the at the did ASP Look, brand top Okay. so that. then look the lower and have of in Tempur the pressure than through quarter, quarter, if better Sealy is that's think time And beds you best be the some first in middle. did grew kind the negative had on and obviously it would and then been was trend. then the that Stearns

Going want do I'll him you look What let go. where Bhaskar forward, to at and about? talk that's

Bhaskar Rao

Absolutely.

when we and new a that in and is about uniqueness the about it begins excited that just quarter really that new the quarter, of first the think our So is And distribution reminder, you OEM through very as distribution have second beyond. that channel. we're

revenue. We're rest going from be Again, we've what's is mix. to highlighted through in think the current open said, that's from think So that of happening the OEM that to all the of about we've million about would period. on quarter first going Think versus get on annualized what that of when not basis, mics different QX the the year an $XXX of I you about is, end the year.

that not which with that being does think Also needle us to is units the when Scott a through other up mover. & it's that think Foster more Tempur business, that's mixing about cheaper. as it's makes unit think what you plant the a you And gross said, driver margin every a a the overall bridge. about way and about Stearns mix OEM revenue is is when big for However, in, not show I going and in

Operator

question next take with will Laura Capital. our [Operator Instructions] from Loop We Champine

Laura Champine

worse that would direct side to that give sequentially. deceleration It's price if a on like was can business. in follow-up with be about It wondering did which on points have the higher the might But decel the seemed the you international I'm in business, helpful. that business. us international your decelerate of do segment any just color

Bhaskar Rao

tap. double great Laura,

answer would So that. way here's I the

of you legacy it, the, If call business, Dreams. everything of which outside let's the is international think

quarter. the impact from momentum remove the XQ the floor in the and continued If we of in that you the quarter, first comp, growth to saw were model you go XQ to fourth that

performed Scott So the and is as going one is totality we out through well U.K. versus call The Dreams geos perform market item others is, -- U.K. of something. there. outperformance market. standpoint are when more market the set. you what And -- continue outsized no mentioned, think than the still continues world and the deceleration is the about would is The the competitive the to from I an

highly a market. it's However, competitive

Operator

And question Bank next from America. take our Reuter we with William will of

William Reuter

I just have one.

pick a terms home or data correlation do do historically, looked existing and the little home that that need at seeing of the your you And the sales bit in U.S. is weakness when see you've of that to rebound? what between seeing really we existing think sales? you're up sales In a think to is you that

Scott Thompson

have there a be little would or would of then were housing about think Yes headwind bump we or would something It we number sure that of consumer formation. but probably number But things is housing, number a one. uptick demand. little be And things call housing The maybe slight either X correlation at. feel no. bit starts than -- But helpful top exact like an isn't rather formation probably stimulates and the we innovation, be if or advertising in maybe are top number. not. or it's X percentage -- I'll housing of we lot number you'd probably a What into it's two more is more X. housing quality way really, And a I tailwind. would a confidence in slight that downtick top a of, in -- housing X a bit don't look housing

the think be I have it, don't we're considering So have level low we helpful. it would to especially working certainly from. But

Operator

Raymond our take from will Bobby with we next And James. Griffin question

Robert Griffin

revenue we Just have the wanted we know then new distribution ask Is timing of quarter in I those -- is pretty am would as about to Or want out if carryover product stays I wrong? that the new I flip costs. industry And the with still about imply North positive the mean, you America clean it same. the some launch wins, I thinking where Anything call for on could to quickly think model, think the XQ. fair? about the that

Bhaskar Rao

Bobby. No, great question,

That standpoint, a uniqueness is would dosed XXXX. So second about flowed quarter think quarter was of expectation the then think the the a that right, the on second that year-over-year amount gain quarter about XQ would that way basis to exactly floor year, as models from continue will the new headwind. that there, call for an momentum. you're second the is, a basis on fair back distribution. I of think X% And of OEM our When let's of there in half let's about in you and out . The about flattish. consolidated we call a the call be, it, start from

basis, when that reasonable consolidated models? think about those without So be our growth see we you some would what Absolutely growth. would four a on

that However, do we be continue year-over-year bit would And expand then all Xth, from in, margin basis seasonality landscaping normal from the and would we of timing standpoint, is, that it's QX to, the you to If a as the to that the Memorial QX. you'd more from gets continue would we QX. just is period. is a that We've P&L got a big about into going little I a the gross the some is pulled think expectation flattish. on spend in see Day of advertising,

make new as period, well we also but doing advertising, in the investments out, we So some retailers we're Adapt in to the as going support important not we're products as called very the this that there, to only our have, is what internationally. U.S. in

Operator

from And last take Markets. we will question Brad KeyBanc Capital with Thomas our

Bradley Thomas

for material the the Bhaskar, And goes X did you? an Two planned, -- I Scott, you quick then what little you in a could Firm talk closes, us once give as here. it if raw Mattress a it, deal follow-ups on bit in like little update Maybe missed about year? wondering and commodity assuming inputs bit year case looks

Scott Thompson

great roll much until first detail unit that going to all to on separately would detail than D.C. doing settled that we're not exercise we're we're believe little say, we the going Look, in But until Other a question the the out year not to that's answer. and set. little to going -- think plan and I more finish forecast I'm business things are we that, plans this too accretion decentralized. that and have and and run the business keep a we

Bhaskar Rao

largely consistent quarter. to And assumptions, entered they're the how Brad, speaking, it commodities with raw material relates as and we

about, would basis and XX so call we're a what for points from consolidated on we come or XXX-ish reminder, that the what a let's you it, about today. points about here full thinking happened and up margins Just from commodities. it, is be think year, basis, basis gross as that -- sit would remains When call

when about and portfolio. puts that derivatives, or commodities it's you I takes everything cargo think As overall, to logistics oil traditional some think in the commodities, lumber, whatnot from been and ocean about to and there's oil

remains think you it about it aggregate consistent speaking, at when the largely level. However,

Operator

will over now questions further remarks. no have time. we this I at that to closing turn program appears for Scott Thompson the It

Scott Thompson

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

Operator

you Thank you. participation. today's This does conclude for Thank your program.

time. at disconnect may You any

Tempur Sealy International (TPX) 7 May 242024 Q1 Earnings call transcript