TPX - Earnings call transcript Q3 2024 | Tempur Sealy International, Inc.

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Operator

Good day, everyone, and welcome to the Tempur Sealy Third Quarter 2024 Earnings Call. [Operator Instructions] Please note, today's call will be recorded, and we will be standing by if you should need any assistance. It is now my pleasure to turn today's conference over to Aubrey Moore with Investor Relations. Please go ahead.

Aubrey Moore

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

subject Scott Vice President Officer. This Securities President forward-looking that are Bhaskar CEO; call Litigation today harbor statements Executive safe XXXX. Rao, and are Reform me Act Thompson, the and Chairman, and includes provisions of Joining of the Private to Chief Financial actual involve affect materially the business. may due that to These forward-looking results factors adversely statements a could uncertainties and differ variety of company's and discussed in of report the company's reports including forward-looking filings, XX-Q. Any annual XX-K is the made. as are SEC on its statement Form factors quarterly it only Form on These speaks date The any forward-looking undertakes statements. obligation company to no update This morning's financial commentary non-GAAP information. also will include this press investor.tempursealy.com website in of at Reconciliations is can filed company's financial the release, the with investor be and accompanying SEC. found posted non-GAAP information which on the

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

Scott Thompson

compared and some the grew billion, Q&A. and our acquisition some earnings proposed for over Thank you joining on more Mattress review open Good to last EBITDA Aubrey. grew net to of from Bhaskar the adjusted on for provide highlights I'll morning, to an comments the million call. up turn same X% X% call quarter I'll In Firm $XXX quarter, performance our and third $X.X the then to us the you, detail. After sales in financial then XXXX to solid call thank begin quarter the third that, year. with a period

bedding remains to year. to volumes. grew grew share significantly $X.XX share GAAP below the and compared industry XX% overall historical EPS our X% per last $X.XX period The same EPS Our per to adjusted

Sealy's results Xx is targeted EBITDA net outstanding debt ratio third pleased to are midpoint Xx. and a with declined leverage of in to below an the range Adjusted solid to we of results. our X.Xx, domestic our However, which with international performance quarter Tempur

strong financial our strongest we closing $XXX free we Firm cash market of quarter As since third in the are Mattress generation we've position the our preparing transaction. Cash million cash of very planned XXXX. and for reported of the flow, quarter previously, despite was soft the free quarter in flow delivered the

to third highlights. Turning quarter the

is our margin by of XX.X% and strongest operating Our margin initiatives adjusted which platform. third XX consolidated driven our is highlight efficiency quarter, first growth the EBITDA in with coupled in diverse quarters, our business the

service to We and invest best-in-class levels continue agile advertising conditions. to brand also industry in responsive through remain and while

which new see XXXX we to led and product in in by expect I'll launch, be discuss We significant a estimate once market normalizes, minute. to the to be the upside Sealy Posturepedic which

to second Turning highlight. our

the technology, continued continues completed advanced consumers to well XXXX, generation cooling of and the followed units. Breeze perform fleet barriers products halo range solutions, Adapt recent pressure and XXXX newest products to Breeze We business rollout and overcome relief to of smart recently a product. These driven of of our collection such with market, as insights innovative new our Tempur-Pedic launched broad our updated common products quality help the refresh success launched U.S. brand starting to by distribution in broader Our compared and the the newly full bases generation of active sleep. feature by industry-leading AI-driven

commitment consumer-centric ongoing delivering in Our and returns. to clearly is innovation investment

base retail to which our both transaction an value is growing their a increase average mattress consumers and our purchases, in driving see attaching we trend As direct-to-consumer in smart a partners business. for

wellness-focused reached by Foster growth August customers. report year's open solutions. These engagement channels, results strong delivered driven the was enhance in in app brand with direct-to-consumer by both investments the to strongest rapidly pleased through product our interest prove consumer Tracker demonstrating record AI value performing our solid our and to and particularly innovative sleep. ongoing e-commerce users and level We're personalized app continues real-time that a our advertising. our offering them both Stearns last achieve in Sleep coaching in and downloads help and wholesale our products Additional, product better & new September, premium, resonating platform quarter expanding our are launch, to

bedding relatively Our large distribution a value in well aided products wins also challenging performed demand X environment, in by recent U.S. retailers.

is market, XXXX. difference. in-house inception We've and since been style clear XXXX. by excitement Posturepedic designed supported value significant while fresh more step-up new This beginning will bedding advertising largest highlight. in compelling patent of Sealy branding and largest This of campaign also years. to as story. support, feature the has designed is the updated Turning thoughtfully advertising effort share to mattresses the brand. drive to operate its in threat products level remanagement have collection fit engineers multimedian pending for will line brand merchandising, look Memorial of designed company's a be a national a R&D of is of collection the Sealy multiyear we to been U.S. simplified provide will top technologies. These Sealy superior Sealy were of result our campaign coil legacy. The unit volumes proposition industry reinforce where Posturepedic U.S. to half brand. a market as to staying Day for and national a advertising feature This common the collection last Posturepedic to XXXX. cycle new precision few to is our mid-to-entry growth product new our This launching The excited which marketing targeted Posturepedic will all-new the a at connected the We're at update proprietary Sealy a coils the weak funnel, be a that where provide Posturepedic we'll product The be third of with work launch

continuing driving fourth brand third-party highlight. to double-digit international healthy retailers' relative and our momentum Both our significant to make be margins, legacy Dreams sales and business Sealy's we product overall in-store in Posturepedic XXX We're to third and operating brick-and-mortar experience, investments to updated will international an in our representing training. plan in messaging success. Shifting all-new our Our by international with drive Sealy to very market. amplified in-store points for elevate high-return the growth presence subdued material and expansion our performed basis the quarter, well operations of International international and in and

launched investments international markets broaden we supporting with Notably, year, than more and over advertising. newly the last the bases XX%. Our opportunities pillows, see by our China our in term. We're to bed and key expanded launched since outperformance continued distribution Germany, across growth international of products to and strategic the Australia. collection Tempur collection market U.K., mattresses, distribution long wholesale And drive like new continuing

feeding ensures investments the the continued brand Our funnel market throughout we for growth. awareness long-term sustainable and drive conversion, both that

for final Our quarter. highlight the

XXXX Our segment Tempur-Pedic recently the Power's of retail awarded years J.D. the X retail honored and this of brand for Satisfaction category #X category. mattress in last to the online in-store online year and fourth out U.S. in the the achieve distinction mattress for was Report. We're satisfaction customer in Mattress X the both for consecutive

testament been over service. And to Bhaskar. to J.D. history study. these resting brand named is satisfaction innovation that, to and commitment most a our U.S. product the unwavering the Power Tempur-Pedic awarded the our With This consumer-centric and mattress quality in with call of mission the I'll recognitions has turn

Bhaskar Rao

quality adjustments consolidated was These earnings third of you, sales were and incurred Thank of all Mattress the will senior quarter closing transferred allow share credit This optimization million per manufacturing we are per to and of cost full-service related unit future us to of There of standards. small $XX in our acquisition are involves optimization our XXXX, with manufacturing $X.X our continuing of their initiatives. The manufacturing In to facility. pro-forma facilities lower shift with planned product billion make the adjusted while which manufactured terms connection are Firm $X.XX. our footprint to adjustments costs consistent quarter, Scott. into X approximately as the plant. volume in our the primarily industry-leading

business approximately margin American basis American XX.X% declined channel both in Net margin the American to efficiencies. by decline and new the to driven the XX operating partially to gross and third points points our sales impact results. deleverage. direct wholesale North of XX.X%, Turning to gross win adjusted mix and offset North operational by our quarter. in by declined operating basis margin North for the XX expense OEM driven distribution adjusted declined commodity X% costs

Now currency International reported a turning results. a XX% net to international sales a on grew on basis XX% basis. robust and constant

margin year, As the improved XX XX.X% period operational same compared to gross points basis driven efficiencies. international our by to last

venture recently operating We're in Asia share by XX.X%, to points our improvement leverage India. manufacturing joint margin, to first partially improved expense adjusted International performance. gross Our Asian and XXX operating our that joint basis pleased the offset by the margin in venture plant opened driven

operations and willingness further to it in vision our near the to in the evidence be Although future. not invest expected material term, long-term of to the is

to cash debt historical moving leverage to our within sheet of under the $X.X credit quarter, At target cash Now the range of facility was balance consolidated end Scott less mentioned, items. third And flow X.Xx, billion. ratio the as Xx. and was X our our

billion $X.X B. As executed have announced, we loan term previously a

fund fully positioned now Mattress at are the We acquisition Firm to close.

to turning XXXX Now guidance.

prolonged notable and our in range, EPS midpoint expansion a X% outlook this narrowed to of the have adjusted represents market. At challenged profitability the a $X.XX year-over-year, We a between be $X.XX. growth of

digits with the full the dollars year, industry fourth that bedding expectation the industry considers quarter, at 'XX. single it year down approximately guidance prior the midpoint XXXX the we to implies in our consistent the saw what Our digits U.S. volumes that year. on are implies mid-single be sales will down consistent will which [indiscernible] in fourth which is based below the This be high be quarter also unit on will approximately the current slightly prior

resulting due significantly by CapEx prior wins million years, products, outperforming and of adjusted a of quarterly our advertising year. primarily allocations recent projects are the capital complete. XXXX. of industry our in CapEx XX% sales approximately $XXX considers an from and over of down as volume prior billion, Our is major spend in driven the maintenance global increase of level This of to $X.XX, with distribution dividend guidance $XXX capital

a $XXX the XXXX, a rate XXX of the with $XXX million on approximately $XXX full Lastly, we that, to back XX% I tax a to approximately turn of expect call Scott. million of $XXX expense would to modeling shares. With D&A of diluted like items interest million, to million count share I'll flag few year million for

Scott Thompson

to mattress to share moment I'd related [indiscernible] like our to a some acquisition. take updates on

First, court XX, Tuesday, X And next is hearing weeks. last November begin about expected XXXX. the scheduled to federal to

the late XXXX in be close XXXX, potential our We a coming to line transaction months, allowing successful process previous or believe continue with and completed litigation expectations. for early a in in

on a FTC specialty which with the As the previously strong our then of with and retail experience, capable announced, led executed includes proposed and an extensive leadership Mattress mattress sale in to part Sleep as of capital acquisition company conducted a with team. The of and a we Warehouse, XX a process, contingent retail the locations divestiture engagement provides agreement locations our for Firm, Mattress distribution purchase mattress agreement which subsidiary, Firm Outfitter retail base XXX centers. Mattress

of the closing Mattress the expect close to We transaction. divestiture Firm approximately quarter after X the

challenging courts. Turning through us addition by week. to Effectively FTC administrative jurisdiction issue FTC the proceeding. Firm prevent court of is STC and law. injunction merger next against administrative starts recently using separate our in This asked federal to own constitutional at its different seeking complaint of the actions [indiscernible] course, some proceeding The filed to the giving an X to commission, that the the proceeding Mattress an

our we litigation. limited, process litigation are and ongoing, comments pending cannot take the on As questions is

Mattress recent to their our difficult market Firm well financial on with expectations. a and quarter. encourage brief believe their are they review to their financial website most Firm's they made to website, information available consistent Mattress Firm's results more performance. the you moving quarterly on Finally, and comments we in recently were We weathering on U.S. Mattress performance

questions, I'd evolution like take and Before the for reflect minute I on of the Tempur up a call Sealy. to open

and efforts for our of dedicated have to the continuous we innovation customers. years, expertise XXX last the Over benefit

become company betting recognized global platform. and We leading manufacturing advanced omnichannel a highly to brands, capabilities a grown diverse have with

in same over resulted and ongoing in Our have since sales adjusted period. expansion XX% in XXXX strengthen investments business EBITDA expansion to and our the diversify XX% nearly

strides and significant grow lie that fortify business, believe opportunities significant made we've ahead. we the While to

marketplace call on open Our and are the that, ensure in in operator. and questions, cost a and initiatives, industry on the evolving to growth. And efficiency positioned also demand a up for growth continued key resurgence and capitalize I'll focus returns success we that to fragmented global with optimally

Operator

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

Susan Maklari

get bit I on think how then the you've the see get year and got your the late and respond rates want potential some we consumer cutting that that talk could to ability next a about and demand the trending you to talk you as a Can year demand. about And across utilization we introductions we you little of the to how Fed we rates. to? new business past product with talked the this for as early may thoughts bit election, that think the gotten react about

Scott Thompson

Sure. Thank Susan. you your for question,

As you look, we've probably which to the now, X probably down seen even Maybe tough years know, in by really a and has never are XX%, from bedding historical It's before. been industry period been standards, where recession. is, peak depression. we

So think set we for do normalization. recovery or we're a

in Sealy largest launch Sealy's in And is history. the which led be the will if it you U.S. largest launch the bedding #X in and is think we think knows the Sealy brand history by probably I Posturepedic,

If have of housing you of retailers be low as maybe may than the at the through advertise. election. us, formation. we've the maybe honest, of we stability, to you more expected as most a well. We've the better government, more quite going very we've We're through kind to frankly clearly, not way. going we're be little look to but peaceful X as months lower better know, the transition a gotten to have confident right consumer, got rates trends certainly some And And ago, in election gotten

to should normalization call some sometime in get positioned XXXX. advantage think And all, like to looks we it in perfectly we of all take it it. we're So

reason right we share in X the like they of think the difficult to continue as It's got market market very I had think capture to other of we highlights in one we've can Both to know, And a quarters relative dreams. kind U.S. both fabulous you quarters we've going far address market real a -- get first is international of out feels capacity any took quarter the as share I than globally. all made also took in why as a got call more we year. probably numbers quarter because quick growth bit place and and remember. take the see the step it their in X that taken that our international Maybe that As was we but compared of share market the that's legacy think markets, And of on probably the them little probably for forward good as based performance, in don't in I a third to market a share. more won't really team, fact, like now, I is I see sustainable. what good we've the And is the while taken call double-digit rolling, forward. what a expands.

Operator

Raymond with from question Griffin We'll next Bobby take James. our

Robert Griffin

the appreciate it's more contribution [indiscernible], but acquisition. we numbers today? optimization. pending guess probably you, lot the I of as question, [ the on bit business a manufacturing can I There's I Scott, little about a think out changes been towards of called ] margin the you details for my centered talk there the -- on

growth far, in obviously, some successful so then very launch the distribution, -- the internationally. a and New OEM

our what against level be international when in is of view think And or that bad of forward, results North of your the just go-forward model and on contribution good P&L? setting XXXX should America margin? kind can -- going we guys about you we anything maybe mindful So guys unpack is kind that either on there

Bhaskar Rao

Absolutely.

one me with latter first. Let the start

standpoint, go-forward continues distribution the assume new As I about that is the just let's which existing quo, status the a brands. of and mix think from

those as As continue as well international perform.

guys So third I quarter. guys. the transitory would good of the performance onetime and We're items call isn't any that in we're specifically there onetime has business bad proud produced out or confident the that

That addressable the standpoint, we've is to relates of from quo, how number what would As about for it I a by that again, assuming years. extremely mean market business it and that. well. going a status after is, new been think doing contribution I International go-forward profit

shoots. the have We seen green

grow. low double Now we're grass digits. seeing And the we're growing internationally,

know, given historically, is the a U.S., price little pond on point they you bit the side that contribution as of the richer than So the profit at. play that just historically

think So when XX% I come the a international higher than bit that. in about the from being a fleet contribution about standpoint, should

about an to it XX% America let's call about I as, think around and from think North standpoint, XX% fleet, from think again, I standpoint. that As assuming incremental is, it, about let's a status U.S. is in quo it dollar as

item to that we've year, they that sitting believe product do we got that been consumer pointed the exciting out, launch an Scott that's is are value on coming Now low-end going come to as come back. to at next back consumer. new hands, And their in right

So will dollars. as is mix be it that incremental in, EBITDA

However, would to mix contribution standpoint. from mindful is a be of it that in as be something

Scott Thompson

Yes.

have an basically EBITDA that the the product we Foster Stearns best I in third as a keep mean the looked brand. of was you But the issue have quarter, I Foster actually & incremental mixed in the and out, prepared into pointed remarks, on. But mentioned to Tempur grew mean, market. So as you performing eye as

price clearly, So point. the has lower weakness been that

Operator

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

Rafe Jadrosich

still was heading yet had feels as under is -- industry, just peak. housing we're of looking sort haven't sales also the 'XX, of some just wondering of But you you below like declines. like existing depressed, indicators, mentioned, XX% if turned if pressure. at state Mattress you're like of industry you of home it's sort we've a into the had, I years could was I give X

kind of XXXX? the we of market in into where heading sort are do broadly Just you think

Scott Thompson

Sure.

just me housing really thought headwind a primary never a let bedding. the or housing slight always market it driver a a described as the bit little while. been it's talk a little all, of for headwind, market. slight about obviously, for was slight And First We've We've tailwind.

held of think into expect think went I quarter, if stuff a it So in well. be particularly look, tailwind. the we U.S. and call has third it up that confidence States, the more advertising, all maybe we the about as think quarter very to fourth Really, you And we drivers. United the consumer consumer on, slight bigger the innovation,

if So more product the look a specifically, And also products we'll is are are talking normal of call little I our we housing. at more -- get making industry my politics, that would from can When to book all you that tell I an industry course, own but I some bedding strong. normal, I'm very innovation standpoint, the of competitors business, innovative.

more products And money the it guidance talked second XXXX out their less on but as are stores Bhaskar really, into about and we're pretty customers. The not customers search very Everybody to green ago, well. has shoots And on of chasing thinking previous as on about is about been bottom I've like international driving top But do funnel, the funnel, really set the a the of we think going last talked good. the looks today. ads, probably doing conservative it's X advertising. really to on up And well. spend ought there. there's calls, bedding So the clearly, some

the pent-up is, reimagining mean, launch, as that the far the a think brand for, it, you industry. Sealy or to, little the in the you to and based is rate also would I'm the stay on behind at extremely or something to get else, call maybe turn it first for we're which is that person any look But is sold we're today normal national know, it. and believing is It that it problems plus, the in these path mentioned and as Posturepedic levels help of market but number got and put country going get GE's per a will a don't you be ago, big brand. advertising As X% don't something I selling had decade entire I the the you you in low, When staff the this look units getting of growth we in I'll everything on X% has time demand. we've industry it, can't that I anything population to and person growth XXXX, while is not back call back normalization, on at of meat It here Posturepedic else. at,

this decline, it look in I at is a time. deep, not we've when in So for it, been long we've only been

back so market. a looking And normal to getting we're to forward

Bhaskar Rao

your about volumes just is leverage is not standpoint come and business we're its Scott, XXXX doing a going margin. what the goes this of through off, powerful from mentioned, as be leveraging does the is And industry doing Scott and is comments one as to that back gross as extremely component

of the when we We mix be will talked constructive EBITDA to think legs all it third the in with will I relates about go that through leverage profitability. those margin you quarter. the initiatives continue previously have to the as as very about and So productivity drive that think combined that as margins items plants, well that those expansion

Operator

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

Michael Lasser

a It's X-parter.

the mix next we into shift two, year to about impact does Sealy of North the gross into American for prospect and XXXX how Tempur beyond. the margin in products? given tariffs does the quarter form And how how the outlook the the should margin performance third think gross in Sealy First,

Scott Thompson

and the directly much. the X is question. from China don't the and anymore. Great don't Bhaskar questions. really of think anything part tariffs the us I'll make the We one hard last take buy the X easy We impact

on So China don't additional tariffs impact really us. any

could is through it tariffs As tariffs the Mexico low-end a put history the way there thing you way industry question are But -- complex some really basis. in, They it Vietnam. tariffs those some to call one the we pass wouldn't a related expect little about be far those as of maybe mix we helps it the and I And the The there's the the to if to about in be other nick new we only overseas countries. there's as in environment. gross that'd we you margin. Maybe you or import on adjustable on the the do come and then tariff bit. think material get bedding, little about expect

Bhaskar Rao

straightforward. Pretty

So is, the when saw offset how informs again, We on quarter, gross outlook it and in a margins by I driving we a think margin basis, XQ America gross expansion. North we mix. consolidated see saw margin did productivity expansion the about nice

and As little you that grandfathered as will being fourth into in start get get bit into the beyond, quarter mix will the we start a more lapping itself quarter and XXXX. fourth

a as that margins. something to So wouldn't it think standpoint, about I it about go-forward but to is headwind. as relates again, think a EBITDA, on incremental

do legs far However, productivity, accomplished from go-forward so standpoint. like and good when about we we've feel feel feel is we And like I about then Tempur a we the what has that continues. do think overall,

be We Stearns Foster. to that constructive fleet in & will have product relative launch and new the is Tempur a

will business, out, the overall pointed constructive to was leading which Scott As it of driver growth be fleet. the the

So in to standpoint. tailwinds incremental tailwind. something when of be North about a it come item think this will the EBITDA, to the of consumer is be mix is American is that there's -- rate but to back nice is Again, a low-end margins I as from mindful mindful

Operator

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

Peter Keith

And Could you international domestically like How to slow marketing the nice pulled here. on and the should ad you going to the the worse? It QX on back in into on going I'm two? because in from QX. think leverage. importance. strong sales sales we going those you domestic spend talk you But Do then strategy from a we advertising a QX just little related think Does saw know basis, versus ad seems dynamics maybe growth? sneak about of just QX? kind about is X-parter implied spend, a international for the

Scott Thompson

Let It's I missed question, if think me tell if about but I'll see I. any. I X-point me Bhaskar a

the on on an based what's up of in spend, that flexes and First naturally going down. market. all, from advertising

If you're daily the literally spend, performance DTC changes more talking depending about it on marketing.

quarter conservative in around considering general, in Just were noise we the and election the fourth relatively election. the the

conservative, say same So a spent of but little much percentage been we've sales. pretty I the would we

would year I a next more I So advertising. the be expect with say, consistent. aggressive we'll little would

singles, momentum to clearly as high market think internationally, But down, expect them what is bank, outstanding I to continue don't don't but whether is performance. double have a good momentum. that X expect have digits total far to the international is very this Bhaskar. relatively performance, both would What to group it's continue We As we know. a quarter else in I question, that's significant speaking, numbers, or in

Bhaskar Rao

I think that's fair.

let's that, versus basis. X.X%, cover to Just about year call on a it, prior X.X% advertising so consistent

you question a about I think specifically, had rates. growth

Scott Thompson

may in One noteworthy. average other thing be in which

as advertising, to other there. quite noisy back in we our quite As have more found people frankly, pulled not advertising be much effective out it's because

effectiveness an been that's guide big to a standpoint. from So

Bhaskar Rao

mentioned, have third dollars, about in million the a rate in basis for quarter total $XXX been as on consistent So Scott total advertising.

mid-single in industry into As fourth prepared profiling we assumed quarter, standpoint. We've write from is digits chugging a down the along in U.S. material, it call I about that the same what fourth dollar the and we've it where think it assumed of kind is, quarter. the

from side of down low internationally. from So this single, North consistent, you or profile, slightly America whether perhaps bit. as double about it, little consistent think the when Scott pond call the standpoint, let's And sales it's other, a said, high a

similar So profiling.

Operator

from question next Basham with our take Wedbush We'll Securities. Seth

Seth Basham

out quarter, Labor that on competition Day shape performed strategy is shake quarter. and the the question do through give sales after during regarding what and how just to Can and the you How color us some of promotional the My did your react? third Labor Day?

Scott Thompson

the trough seen peak is what previous quarters, higher. in Sure. the we've Consistent with deeper is and

blend would we've trend together. So the seen X, would in the all periods, don't it a of for, growth. good be and actual growth quarters negative that's then And know, trough, have you we bit we I holiday in and And pandemic. X post

bit So We and I quarter, would it gotten promotions. on don't a I it year-over-year, our marketplace. of was some Oscar. kind in promotional shape little then different the significantly that's that there. of did I we fine-tune think say activity match less the here what the don't And would to kind stuff. has that about was in general, talked Nicole call more I environment promotional recently, I last say work

little like some would to As which for dollars it be squeeze out industry. and advertise, being are positive to consider a promotional a the others I trying them less in to net looks

Operator

We'll take Brad Thomas our with Capital Markets. from question next KeyBanc

Bradley Thomas

about We how more is the you that talk about about peak terms a Could you luxury questions and declined how about you specifically? a it's much you forward, a performing. Scott, going luxury of outlook. how and get bunch think about market lot from of talked industry in the how your the of it think part bit

Scott Thompson

is Tempur Sealy. well. Yes. Luxury up holding

I As industry, in down are some X% was other those And quarter. in and both brands the industry Stearns those public like sales. the other prepared companies for Foster I've were brand the probably when then I that. after growth actually brands reports third I perfect were and best-performing talking both growth. XX% that significantly. & maybe down the the numbers terms temper mentioned no they about was seen And and remarks, guess said, In one's had in I'm talking talking U.S. U.S. to in of would

me up is to well. on our for call customer. hard very holding the it's high seeing from So But general on high-end through we're a what products, end make the

Operator

Truist. question from Merrick take We'll Judy our with next

Judy Merrick

sense on for new give talked how the the on you I from about be would half Posturepedic the next Judy can Sealy [indiscernible] either wondering is of of earnings much you Keith. launch drag was a us if first year, on the in a advertising This

Scott Thompson

incremental won't launch Posturepedic in XXXX From be what costs really standpoint, a we did XXXX. there year-over-year any compare to when question. the great Sealy launch you in Yes,

cost. will go So working When there be advertising, be that incremental we incremental be to expect advertising through through. loss cost you would but to self-fund to initiatives it able reductions we're cost,

thinking expense other be incremental about it So as the we that advertising way will incremental we're with reductions. cost an not offset is

Operator

And we'll Laura with from take our next Loop Champine Capital. question

Laura Champine

meat sustainable. on in was Can those impressive, hear a Scott, macro put I be bones view the growth growth there a why that in tell markets more and too? should I pretty that And us that international and you sustainable thought little tough international you, you as

Scott Thompson

follow And you know I Yes. us closely.

expensive. years painful. we new us finally at on X took launched this before to. we long it got but Tempur remember, where was It you time, product we it and It new products needed for a worked Tempur was If we

product backed the and So first product. the got creative with driver new receptive we Tempur big right it the the is and has new advertising. up market been We

to and bring high Tempur would the And also product that a closer Tempur not execution expansion I it, the of little end distribution call in some just super a very all premium, we're on in difficult market, mentioned a free of had market the we're side, a we'll the strategy So be bit. the that. but to, little we've had it in from working as I standpoint. think remarks, through don't And that down prepared we've through the

very crisp well executed share execution perk rates economy, the ledger, has very at and the the cut least significant you interest of team they little stuff. U.K., bit an has like Dream and robust, Dreams it not if taking stabilized beginning although it's go standpoint. feels in U.K. to a And the If from and being up side to the

So and Tempur its on the temper and both side execution the on Dream product side. the side

Operator

with again. take from Bobby Griffin our James we'll And Raymond today last question

Robert Griffin

more during I've just called quarter. it actually Scott, a little been the you want on to out strongest Foster, & I Stearns brand bit

the maybe a couple of past I quarters. in on of think trends that's some prior reversal the

maybe Anything you push because turnaround advertising? little multiyear that's Stearns can basis. understand just a unpack us So more the did over given a on to encouraging pretty a there the in opportunity you little bit help that

Scott Thompson

Bobby. really all have front okay, my down certainly bit. it in of me, numbers a for the But don't while. but little was been Stearns lasts is perception cooled quarters. of hot a it I couple little Yes. a It's It

And I third was think then quarter. the quarter, a third still had in it growth. very in strong

focus. we sales the group I'd it little credit, it in that all, because a that think the noticed I of sales slowed to made group give first a bit down

as strong We be underperforming SKUs brought of them and or a we of tweaked X. we SKUs. had floored got have weren't couple as X to liked X replace with a productive to X or new in also those quarter. that, very and X SKUs in and Stearns -- had SKUs X them where them And we it had SKU that would X or

promotions and So additional no additional no advertising. speak of

a down advertising think bit I fact, little was In on Stearns actually.

Operator

are There the or the on for at further line call to no questions this additional I any time. closing turn will remarks. Scott

Scott Thompson

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

Operator

Thank your you. today. participation everyone, And you, for thank

You may now disconnect.

Tempur Sealy International (TPX) 7 Nov 242024 Q3 Earnings call transcript