TPX - Earnings call transcript Q4 2024 | Tempur Sealy International, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Somnigroup Fourth Quarter 2024 Earnings Call. [Operator Instructions] This call is being recorded on Thursday, February 20, 2025.

I would now like to turn the conference over to Aubrey Moore with Investor Relations. Please go ahead.

Aubrey Moore

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

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

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

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

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

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

Scott Thompson

thank Aubrey. at for SGI you, the International, Somnigroup and Stock update first you and morning, Good our Group joining us call York New on ever earnings Thank Exchange. on business

iconic portfolio of to Mattress SGI. outstanding TPX with excited product and International company we Somnigroup solutions completed reported, from new our Group changed from previously mentioned, start ticker a for to X, and We're we As as and subsequently Sealy sleep changed common brands. of provider Tempur the our International, stock a businesses our Firm chapter I to global this merger successfully Sealy of and we February name on parent Tempur as company

Mattress will We'll under Tempur and will as Dreams a begin and Firm as Mattress own all International. Tempur Dreams under Tempur units we've Sealy's previously and retailers. primarily Mattress channel. Firm, third-party name Sealy, direct-to-consumer Sealy, Somnigroup continue Firm's quarter. operations and will operate well Dreams Group next as As to serve operate as shared, continue decentralized manufacturer, reporting to business their Mattress multi-branded Firm retailers

with review the fourth Turning turn about and opening discuss detail performance to before call that, thoughts begin year I'll to today's our full After by earnings our the unlocked transaction highlights and XXXX up release. more over financial XXXX will quarter Bhaskar then in and I from share the for guidance. the to some opportunities Q&A. call the some

net in led was outperformed sales In adjusted XXXX, our $X.X performance EPS We were billion, the business. by $X.XX. strong international fourth expectations, quarter fourth quarter and of approximately our

extend despite fourth Our business the estimated North to with America continued industry as an its prior consistent sales in the year overall delivered industry. decline lead single-digit in quarter we

impact America low negative being digits the the grew from quarter. from unanticipated in foreclosed sales our an customer distribution Excluding North acquired, resulting single

a to few Turning highlights.

partnerships is the industry gross strategic worldwide, service. margins our business opportunities its Tempur history delivered outperformed industry-leading the growth strength our in in of our initiatives model, near-term reinforced strong model. and sales In Sealy and and enduring to differentiated by quality long-term us business invest by We to Sealy's its product third-party explore the remaining First responsive of to Tempur while industry which aggressively XXXX, conditions. allows fundamentals and strongest commitments upholding

delivered to continue in also in as margin invest We strongest we our even years X operating future. the

e-commerce free & flow, million than X-year a Stearns in period. Sealy more XXX platforms opened invested Foster and free over stores $XXX spend, advertising our in We robust for cash the XXXX. the U.S. in strongest since company-owned annual cash our and reported ramped flow We've

deleverage XX, X.Xx management for at demonstrating the December the Firm leverage as EBITDA to XXXX, XX, disciplined business. decreased our December cash at transactions, Mattress our also quickly ratio prepared We adjusted XXXX, X.Xx to debt we to and from ability

high key are Our markets year other believe context world. in for similarly in in particularly demand the in notable as the bedding another many declined trend U.S. was trend. digits we when industry challenging the broader industry results single to XXXX the put and

the volume from declined industry Looking years, last XXXX. than sales believe we the XXXX mattress few peak at U.S. XX% in to more

GDP industry to XXXX However, turnover half in of fundamentals growth the market growth, begin the poised of in some the to the growth, the we are confident the driven housing solid. clearly We for expansion. anticipate ASP market normalize and and in bedding return We believe remains is population back year. will by and

innovation, and historical by time, Over mid-single-digit expansion. the population cycle we return to rate replacement the growth ASP are driven growth, in confident

the years, upside to X additional purchases Additionally, that growth volume deferred provide believe also demand last based on we could decline pent-up assumptions. in from the

outperformance is and advertising distribution. the highlight new our business, targeted U.S. Second innovative products, expanded supported of by initiatives

Breeze delivered Our Tempur success are our active These and which with the refreshed number Breeze innovative and of AI-driven attracting traffic newest XXXX products in products retail Base halo Smart of the market by features, new supported advanced pressure relief health-conscious and key of sleep The barriers cutting-edge by insights. XXXX, brand in outperformed address growing XXXX, Adapt technologies, sales sleep, product achieving new a consumers Tempur drove better cooling to ASP. in including lineup and the and profitable include and rollout our followed collection updated growth launched products. its our

growth & by ongoing in Stearns & platform. Foster well year's e-commerce advertising XX% XXXX over launch, Foster in driven investment last newest product in also performed our and our Stearns

industry. OEM across these relative products the include our as well and events Sealy OEM Sealy and pressure provisions the business consolidation, impact the losses on performed industry. for well incremental U.S. industry over Our as years sales of mounting these by results negative X The XXXX, the restructuring last and in In triggered to bankruptcies resulted events.

samples after We're marketing at in mid-tier off product aimed highly track shipped Orders Day. bedding all-new retail of XXXX This Posturepedic months our is reigniting Sealy to be products, that retailers for This XX% price and the reimagining of growth Memorial point the before product in an line are is launch largest of floor opportunities. to with last we collection to Turning value launch where the a history. product and on to incredible excitement share launch. feedback, excited our kicked the month. is anticipated tremendous brands and see significant the posturepedic estimate and new

while since which the Sealy to updated in-house patent-pending mission style broad This engineered fresh offer all coil were in from Sealy connected been brand is expertly of provide These with Sealy fit Posturepedic thoughtfully collection inception Posturepedic designed designed new superior clearly competitive The and differentiated technology. staying coils XXXX look, to the offerings collection new and Posturepedic proprietary support, legacy. has to features a to a its audience bold XXXX. a also appeal precision

purchase brand. the Day the support the a for we that company's to posturepedic flexible for over right and support. is of To in retailers. campaign and is body and largest to PrecisionFit coils drive conform and reinforce product America's This give in and national beginning campaign, posturepedic types. resonated support demonstrable this designed customers then and with amount decade, multimedia off progressively reacts weight a Sealy improvement brand launch, This and intent difference has and new initial lighter first total have comfort These for well the top-of-funnel excitement a XXXX. Our unique Memorial feel shape to will It deliver #X national mattress change campaign products ad highly an support. kick new advertising individual's step

brand evidenced As above, the to in success. to continue high-return make drive by we investments and retailer product

to Turning our third highlight.

mid-single-digit strength market. both full in continued and despite business margin growth to strong performance driven We in our business. the international are operations global Tempur XXXX, by XXXX, report Dream delivered year pleased operating solid and subdued momentum generally reflecting for robust expanded our a They legacy

substantial out of U.K., products success all-new of performance which markets China the collection, its and outperformed as channels continued bed the Since has and A several base, coupled opportunity XXXX, in our that for of has remain and been to key our more start rollout The collection years mattresses, the international driver expectations growth of distribution strong continuing opportunities main the expansion in in distribution in XXXX. customer-specific its this collection key Australia. products, Germany, pillows Tempur This the key with such demand significantly mid-XXXX term. the with Tempur growth will completed underscores wholesale roll further come. over launch the these driver confidence a in to than XX%, we long international expanded by additional for see we've

our and by margin basis our and reinvest gross Our more of of These In fourth significant XXXX, increase investment manufacturing cost provided improved turn margin, in our initiatives has ongoing our in operating strategic efficiency, in with mix consolidated expansion. our we which initiatives. highlight allowed to to reduction resources have product product is optimization innovation advertising, new and and improvement gross development driven us the points us year-over-year achieved in processes people. product XXX

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

continued recovery. Our an ensure and key are benefit will industry position initiatives on in cost that bedding optimal focus we the efficiency from global growth to

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

Bhaskar Rao

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

Firm distribution and quarter, with previously We fees unexpected costs. which comprised to have Scott are of are facility. These professional Mattress the adjustments pro in the $XX transition of costs of senior wind-down related the of all adjustments consistent incurred including credit forma of the foreclosed for terms million largely mentioned, our acquisition and

American Turning On in channel advertising by reported fourth channel Scott moment balance the to North deleverage North for the the Net driven wholesale primarily fully adjusted a by the and profit sales sheet the gross reserving from adjusted XX.X%, basis, year. to direct operational North to operating were quarter in to American consistent investments American operating results. declined margin the a prior consistent driven mentioned efficiencies. improved ago. expense event margin was X%. and XX.X%,

fourth to on on sales reported currency turning in a and basis Net constant basis XX% the a increased Now quarter. International. XX%

XX%, the to by mix. driven international our to efficiencies prior improved gross favorable operational and compared year, As margin

gross Asian market. leverage, operating manages partially through driven a international by it operating improved expense joint performance our venture to decline Our weak offset by margin as margin and the Chinese a improved XX.X%, in

Xx. on moving generated ratio the leverage was to the and fourth million. under sheet At of of billion, and to the we operating our balance our target end consolidated facility $XXX of items. flow Now X.Xx, $X.X range The cash was quarter, historical credit quarter, less Xx our debt cash flow within cash fourth

leverage approximately X.Xx. of our Following the Firm the Mattress was transaction, close net

Xx We that rate be expect synergies. of leverage credit our and near the include range note our run leverage to forward to repurchases to the our should I under the target share of terms term. will going for facility, to over calculation of Xx return benefit minimal

is rate that synergies least expectation will XXXX. at we Our run realize annual in by million $XXX

I want are reflecting highlight guidance. detail, in I Before outlook to how discuss in our XXXX the the transaction we

the intercompany guidance elimination divestiture announced Mattress Tempur Sealy. the previously Our Firm considers and and of sales between

We forward. factors going Tempur be Please to represent Intercompany of highlighting sales. EPS. -- XXXX expect will Sealy sales sorry, accretive some but to will to our items global I note, the will neutral for sales that the Sealy XX% will reported intercompany approximately eliminations these will in be be impact follows. Tempur of reduce accretive guidance and sales these two normalize commentary margin like-for-like

our ramp the We should back will to expenses approximately years. this P&L half policies and items. an investor benefit across to align some be further to policy I primarily anticipated website year refer acquisition-related operating there this the alignment the IR two for morning note impact also also on organizations. to of year of in first accounting expect the realized million and synergies $XX of COGS presentation landscaping for other posted the detail Please with in subsequent

our the the reporting our results first in business. As Mattress segment Firm consolidated addition in quarter, of new will reporting Mattress segment we begin with we a Firm maintain the historical for

XXXX our guidance. turning to Now

the We $X, range of the in XX% to expect adjusted which at a EPS midpoint $X.XX to XXXX. is growth versus be

eliminations basis. sales Our guidance based $X.X is reported billion on intercompany a between be and to after on $X.X billion

recovery the XXXX. in the global which of bedding will versus reflects half year, that the the and stable guidance prior half second in implies expectations slight Our be first also headwinds industry our

sales Sealy Tempur like-for-like and basis, reported on factors teens discussed. due to Our the down growing slightly a acquisition high previously

and distribution in flattish Our the on driven year Tempur floor Tempur represent momentum strategies our which the comping by product continued America due channel the headwind of sales foreclosed to outperforming Sealy the prior over Sealy be and to basis, like-for-like combined mid-single models, and North a industry sales. America North

we our the lap International business year strategy prior a momentum single as growing includes digits, the launch. Our low which continued slight omnichannel of quarter expansion first headwind and in

on growth by drive constant slightly, conversion. single-digit supported initiatives currency sales and in-store segment. order average a expect Firm also our like-for-like International basis And value to We high in growing our Mattress

margins similar $XXX which $X.X includes step-up advertising to expect reported which to of Sealy million from margin, slight all approximately headwind gross foreign exchange. a also to adjusted a gross EBITDA reported We in be XXXX implies advertising, in of Tempur billion. $XX investment, million $X.X billion resulting

Regarding $XX we to expect approximately XXXX capital of refresh stores. $XXX including Mattress expenditures, CapEx investments million in million, Firm

run long CapEx be expect the normalized rate $XXX million. term, we Somnigroup Over approximately to

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

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

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

Scott Thompson

Thank Great you, Bhaskar. job.

recently once of express completed the like again call long-term turning about Before I'd Q&A, the optimism Firm. to acquisition my Mattress over for

Mattress worked all for our unlock incremental over collaboratively Firm and to XX we welcome years, into and benefits to have with them thrilled organization We are stakeholders.

back adjusted share conclude earnings taking seen per benefit markets perspective. despite a continued believe Let execution and We the this, our performing trend historical growth. transaction. growth. their share And Mattress led me from our We've by long-term will XXXX to step our of line Firm has execution below to

Mattress beyond for industry-leading Looking this simultaneously from realizing while benefits and markets we return Firm to execution. growth the year, are continued incremental planning transaction to

guidance rate increase annual We XXXX. XXXX digits midpoint at EPS a the to targeting a mid-single compound are sales by rate from XX%. grow in of approximately the XXXX, indicates the growth of internally of for $X.XX Somnigroup to adjusted annual $X.XX, compound would This starting growth

please our for That open Operator, questions. up remarks. prepared ends call the

Operator

Your [Operator Thank Susan gentlemen, Instructions] comes session. Maklari you. will from we question Ladies begin and question-and-answer now Goldman Sachs. first with the

Susan Maklari

Scott, and the that into of could industry the year I some your driving guess, expectations outlook consumer? the more want environment this year. given about the is normalization state I talk for in with that a bit to start what macro coming you we're with the

just that half bit about think then we to against versus a talk should And your about execute ability how and second half? first

Scott Thompson

strong you I it, into bit well an say the then here back you towards for I the we've of last bottom, would We little the where last bouncing I starts this Look, But a normalization call year and question. bit had XXXX. half. year to slow we're start little of of the during the and a we're end and I pocket in Thank reported business, Sure. see but Day, say call half President's until year that which than the to stops. have air I ran for around the of used been would has expect would which Day. be first we're or a really expecting what little robust a the less period that's still to President's muted I couple get you mean, think bit continuing during years of, steady

based some launch. We're new optimistic of very Sealy on think I product. that about the is driven

has the while. been a Sealy in the market product Some for of

So launch it's and term. as the That the in mentioned, this floors continuing be, But being term well received. call largest it's just and is, cautious being history. bedding now is getting we're product placed, we to long optimistic where we'll it, near on

reason, some the for expect. market we than is different Now

relatively what flex to if can is and we need market if flexible, the need up to the that's we or model I as do. you us down know, we think business we tells can flex

Operator

question America. next comes Bank from of with Rafe Your Jadrosich

Rafe Jadrosich

relative color getting Or you to bit you on TPX? million $XXX leverage accretion Can core up $XXX assuming that long-term more that Firm? the wanted just much the is is on that how I a give maybe of of that Mattress is And provided, synergies? to follow little guidance on million. operating

that? question, And -- a and below growth then that just the something long I mid-single-digit Or then that industry? know is then is you're it's assuming, industry is but TPX

Scott Thompson

Great.

this I'm wouldn't perspective. the and sure you for in to wanted give and to up little questions tell me a "guidance." we talk that look, we'd thought some put you we out We But a going there people a clean miss kind put bit. I call and -- up of Bhaskar ought to transformational knew will give there Look, blow models, to that something people's me Let acquisition. is something we while, XX I'm such internally. of a

primarily we while. Generally, it's a in it second, can in got a with what FTC in $XXX million each synergies the the other for for some of a about over reasons wouldn't call period talk to start slow I'd talk

to back -- the talking back be growth now look So that's And the our getting it getting revenue the not. we'll in may just teams terms, and X%, together normal. for may conservative, and are industry shows the call perspective,

know then harder I But baseline think But you be time. teams there it's good mentioned I over a I a synergy a we're number have work think may are think the gives good internally and We don't I we pent-up demand. that that And to targeting. bigger of going yet. idea assumption. hope what

Bhaskar, you some that? of to want do speak to

Bhaskar Rao

Absolutely.

So of a just a tap. double bit little

a So that when expect to share about Scott you is category it as from we category, grow market ahead mentioned, think the standpoint. globally, about think would

$XXX incremental So is a is mentioned. as million in that X% Also manufacturing to absolutely as And anywhere a over that X%, that going through again, you period. synergies component for about yes, globally, between productivity we're at think of least there process.

those incremental don't end category add CapEx incremental come start of that to able XXXX, more units we to back. assumptions, business. to leverage be any to the assuming or at level both have capacity the as Interestingly, So of units, support

refurbing our invest investments we're that Also, in the Mattress of Firm going we stores. advertising. have the as some we brand rest the to about out through to think support I called dollars As continue

that is in well cash the depreciation as as that that embedded would come to incremental that. flow So

So XX% EPS growth that at a get the you with put all CAGR. to on line together, mid-single-digit you growing top

Operator

Griffin comes James. question Bobby Raymond from with next Your

Robert Griffin

Congrats on getting the deal done.

Scott Thompson

Thank you.

Robert Griffin

Bhaskar of manufacturing I that think things business do kind underearning overearning So your view 'XX. to of and on margins I assets, Where a of we wanted hit Is on level Tempur just that first you on base? saw fiscal us are? some efficiencies Just Sealy kind the fair gross starting guess others? the year Is set core in then. the

The million, two-part guidance, loves. industry connect question to having the reporting behind my second drivers the that just again of a Firm just in guidance you maybe can $XXX basically Mattress part, $XXX that? do then Is despite And that. versus Scott flat of end I'm million 'XX, with low in curious low down going on Just end just there? that

Bhaskar Rao

So gross The Tempur maybe from from I stand-alone. introduce everything go-forward I'll start from Bobby, a when definitional a items. Sealy we'll acquisition of that Absolutely, on like-for-like standpoint standpoint, with the standpoint. a about like-for-like. outside is a And is opportunities profit a think just

the nice And is beyond as margin plants. basis. basis quarter, on leverage points. about of an would big I driver yes, the it, like-for-like Sealy forward the in expectation going on that, as into Tempur expansion the going gross So, call the it's and 'XX And think and through basis think the productivity a XXX if fourth really I about get stand-alone over we that

eat at What in you did as our we say fact, quarter, I it nonrecurring would some further items. look to if good relates is fourth guys,

is fully out now the called we retailer. box reserved. business, the big foreclosed That So large

about of step was bad over. $XX million a debt had we that So to

of it business in a Also, that percent piece of business, OEM OEM our to a our top fourth the of and as the couple relates quarter cost abrupt us line. foreclosure or

revenue continues look well story. at as pleased profit P&L. as when was how in. super So A the across I quarter, we're deleverage. came International be great bit in fourth to exciting landscaping the a the fact, with Gross of

really is talking deleverage sheet. our balance fully that protecting However, about

Scott Thompson

low assets Mattress of in So a in on really you guidance with end the prod. what you're had Firm your guidance, saying, then you're on question And the underearning 'XX.

Bhaskar Rao

the a is when -- think think category. head around to the acquisition. our I it's about weeks, fast X since think, been about long We've So We remain a When $X.XX year. us. $X.XX I about getting talked the I

question think believe guidance, feel So as low would I good the end hitting relates have specifically, think that I to we what of is you about... to it

Scott Thompson

The industry has down. to be

Bhaskar Rao

is which is what Exactly, asking. Bobby

Scott Thompson

end around little a industry low I Yes. high as think bottom the to that protecting us say say level the guidance might bouncing if would be to it. bit of down is the opposed is the I that XXXX,

Bhaskar Rao

of The and years Scott to items the here are into some is making, other open we're in still coming through. as about said, family. excited interesting we things There it's Mattress a couple the work Firm -- the got been

that that part So the those will the Sleep And side family. divestitures, May those divestitures will that by happening. Warehouse Outfitters X well on be Mattress the as both be Firm Mattress the is side are is of expectation as transferred the or is

that You will that that the together, put as beyond. of mentioned Day we expect that accretive obviously, in the is is start balance the for, the quarter and less to is President's Scott and be year second all well, acquisition as than stellar

Operator

Peter Your from Sandler. Piper comes next with question Keith

Peter Keith

Nice Congrats out the could from to If $X.XX, the year Firm just EPS finish think about there year. Mattress the to you're accretion for acquisition? the EPS that how acquisition. you is a $X.XX contemplating break range that way of we full on

Bhaskar Rao

Absolutely.

are leveraging the is, to I would body just accretive be the as and is came that's happening beginning the of stores, off the A the as expectation So couple just us so of work is second process. last that it's a mentioned, items acquisition divestiture question in throughout of well the that ramping at quarter year. start as that a

involved. people got You

with Warehouse. relationship you looking it's process to the that Mattress have work about So through to a we forward when think continued

when ramping about you and the then as quarter second in starting fourth. go into accretion the the and So think I third

Operator

Michael Lasser UBS. with question Your next from comes

Daniel Silverstein

is Michael. This Silverstein for on Dan

lean buying opportunities? could you've from for question power? identified, is explore think in further you new you million the synergies you $XXX potential will some on that see the specifically your around some consolidating beyond and Or Do Our benefit advertising.

Scott Thompson

everybody's I cost ground, $XXX Sure. mean, just the million the are synergies. On synergies,

synergies. the are budgeted ever any be there in would We synergies. addition haven't revenue That revenue extent to

question on And advertising. down that specifically bucket opportunity. big on is big no advertising a then your There's and question, a drilling you're

think advertiser States factor betting basis, will Somnigroup to of on okay, by in I a largest be clear. a consolidated United X, the be

big competitive, a it, asset strong for weapon and is or point. It's we'll number. a call us, a it focus it's So

think X traditional two together unlock to advertising synergies buying synergy the extent, call quality of work X come And collaboratively efficiency. of and coordination plus take the a more volume to both advertising the you a when it that the price. so But get it. and an And in I ways. versus just a while. in power, little Yes, that X teams that dollar I will we'll kind will I equals and big advertising than spend is think of think the

the say advertising while, effectiveness opportunity, I think that the primarily of I'm little not just When than a absolute is talking in a but more great years. there quarters, dollars. But I

statement the improved I through sales, course, industry. believe both flow Of it will and income through the us for

Operator

next Your with comes Securities. Hughes from question Truist Keith

Keith Hughes

think it will Is to, know do view that trial. together? do you question, you last better what really next Firm you haven't other of could At have of much been the on the you year? building able beginning take? So to something talk at during the think you said, long you things do Or Mattress point how what I a as

Scott Thompson

grounded teams that basically, talking. It's take to the not trial, not were to the long. get And during everybody going

X having months Yes. everything do to synergies so shut And with got down ago.

a got litigation, we be bit hard And So start. little to were then and call we went walls walls. a we'll these when would put it up, of

week it's of know long. groups second think I I okay? by and the think the restarted. by be just starting more think reengaged quarter. next And end no, we'll lot know -- quarter, we'll get are so lot a And are we'll going a to third getting we're that So -- very I There more, the meeting take to the of end don't

make to prepared doing I in we're the mean going implemented have see of Bhaskar's benefit you're remarks, are don't And think from can affects away. it, an by we'll you have this doing realizing have get get mean think robust as teams from change not full their people. year. -- I jobs letting way I sure they're we that of in But budgeting We'll for they're synergies synergy affects But Anytime people, that amount activity we'll XXXX. this or first sides. buy-in the what get the they say that together, aggressive I both a year, several funnel in I when years doing And the a way. some standpoint. of synergies,

buy So I a but at, get think organizations we what both look we in. want process of through to we've got and pretty idea to good need it

Operator

question next ] Seth from Your comes Ashawon [ with Wedbush Securities.

Seth Basham

Congratulations.

tell expect words, break you do growth EPS? maybe In expect long-term for how the versus time much on growth, you much from EBITDA you other the Just EPS that and how guidance, down Scott, in us period in XX% us of terms over could deleveraging?

Scott Thompson

the give details. Bhaskar Okay. I'll you let

stock As buyback I remember, in that particular calculation doesn't any it. have

model to That's I cash right. threw the just the in think we deleveraging just simple. make

the the it But of would Or top you to... number that head? off your similar growth, EBITDA have on do be

Bhaskar Rao

from -- what mean, Top I No, it. I Scott allocation any XX%. buyback does say is, happen at that EPS a we don't line would or as in said, growing standpoint, have capital

in flow that we will cash And that generating pay what be will we've we period. we -- is However, down debt. assumed

vast growth the EBITDA. majority from is coming of However, the

digit. of You've double growth got have to EBITDA

Scott Thompson

from is no some coming accretive stock coming from for future deleveraging, buyback. But nothing right. question. acquisitions. That's There there's

reduce cash So relatively I it's flow benefit a and conservative think did debt. computation. fair. But is We for it

Bhaskar Rao

right. That's

no vast again, just majority debt being coming share the paydown, EBITDA delta So from with buyback. growth

Operator

Thomas Your Capital next with question comes Markets. from Bradley

Bradley Thomas

Mattress here. at could about business Congrats leadership recent My was little talk at And a address question if could And just, Firm. could transition about again seeing for trends you've bit that deal been you in a underway Scott, little then the the thinking Mattress how if bit just sales lastly, same-store you're talk Firm. XXXX. maybe on you about the if closing the you

Scott Thompson

Sure.

Let of me take crack a those. some at

I fourth various felt all, January. think on transition it which, have that right February We've published. to the peaceful began And been that may robust went the December, think at U.S., you U.S. I'm the And then in market well world, some went in which government been we'll we'll President's I of U.S. like like it, the expectations. in again, a, or Trump compared places. And X, certainly of the in call to a it fairly of and through the activities which saw muted not less has maybe got uncertainty First call have was with in benefit Day trends, expected. And to And bump. through Washington, call hit in created kind the going it the the okay? probably quarter

of question, impact overall. does is some what explain not muted President's I the weather, but would call weather No that for Day

there's not it's troublesome. hit is and what period and period soft So these solid growth a been seeing it's you of Kind we've then where too time negative. where we clear year-over-year starts a again, get for of

And of call so what kind that's I'll current trends. the

but share growth gain. history generally, Firm, Mattress sales on sales same-store is share of -- minor We'll same the Firm call it the share the gain, On Mattress growth gain. at

that. have strategy store growth going is market. same-store we expansion dependent estate all And their detail of the their sales be then gotten and into and to on somewhat real so And not in

it. how think may impact or an about And we have that some not may of on

dependent little sales market. a their do. to same-store most early on it's But be will of So

positions team, in the a your right future. think that change Firm part have And I leadership the information got question the be quarter, a now. in that Mattress for right and change. And Firm. day you continue sure team knocked with We Then give work the right that's we've right the I made think at job in able area. to success the we'll my to management more in Mattress out. within We'll was I people third make that of with some mean, the authority we'll at recently

Operator

next from Your Matuszewski Jonathan comes with Jefferies. question

Jonathan Matuszewski

trying evolve over evolve Obviously, of $XX ramp It are million of coming kind follow-up of cadence the recognizing from, manufacturing now. coming in 'XX. walls ramp hard curious of how that will synergies, realization. or 'XX second cetera, But whether the and a those on management, But was that logistics half, synergies what 'XX. and about as understand just it's $XX kind of efficiencies those 'XX just just to that those in the buckets initially kind how in et life time in or is buckets terms and will million cycle down

Scott Thompson

Yes.

kind of the you make but will Let let together form about process question, a which committee then me after. come their proposed and the people we his to responsibility, and go to with get will pick of leader top understand up area will of us them for to The they process, of me then of in to they process. -- present want companies answered synergies, management the each is and each sure and ones kind talk

two Those working. big meeting next groups leaders And week, week, so they actually, actually, and logistics, will like group. the they're their probably be Merchandising a bit but work week. and operations met little this will next

then, stuff And don't of and perspective, suspect on really we But back-office office consolidate. are stuff. accounting, quick back that of course, kind most Bhaskar? the hits why some easier I call give of to

Bhaskar Rao

Absolutely.

again, coming And $XX type put is, half color the you just corporate power initiatives, where on loaded. got we call the sourcing I So of it, right, million, those think of primarily where functions scale. principally in some back get of from it to that let's

a firewall it from of I bit be as that well way. would efficiencies -- now imagine to there's from being So we think standpoint. about manufacturing -- a can that observant that Also, going

However, there with XXXX. in is in more some I imagine other. work opportunities that area that each lie that we easily can

again, terminal call think thereafter third a slow $XX let's a about and build, gap cadence, in got it than round of the the numbers, we million, big let's a say, I it year more in little the fill say, doubles bit then As year. let's doubles that

Scott Thompson

in $XX already than the That's done by implementation, much you'll getting But -- actually an to $XX the be quarter your bigger into is you're numbers million get the time effect. what to get wraparound year in when million. second this do the you going with second

Bhaskar Rao

Exactly.

Scott Thompson

year yes. In little start 'XX, the plus more, the at of bit just a and even

Operator

Loop comes question Your with Capital. Champine Laura from next

Laura Champine

retail call U.K. this U.S. 'XX for across But it, duplicative, morning. and Firm, what's location growth, Sorry I'm outlook if your it's your in digest once platforms, -- you beyond call juggling Mattress and

Scott Thompson

Yes. Great question.

Let store something They U.K. first stores, I opportunities like while. for single-digit I'm for it I'd has that. me growth -- Dreams, familiar in percentage because guess for a call do in all, have a very team that of the with what still expansion, and long-term plan

still So got that they've opportunity.

gotten that number haven't We'll that we've stores. years sophisticated not we we've estate a have store have got estate, fully But level next start confidence seen week. department real real Firm worked not the of of Mattress very we into their that, in. the and that through any the over data. They through their details has been In

And so this have really a don't perspective point. I at

going there But some say, not Again, flat within of my let's new bit knowledgeable quite to it, markets a that of count store then kind I'm growth are call markets new where that, areas rotation are So would just from be fully detail. today opportunities. and guess. or overconcentrated

So we'll the fully that we on on estate we'll as get, year in it, their call detail strategy. have more information throughout informed real

Operator

Your with Blair. William comes Phillip from next Blee question

Phillip Blee

year? brand's talk during think what bit launch? past about their Sealy growth have upcoming you the that product a And you few the do over How potential Can years can Tempur to year about launches? that compared this contribution of Stearns this kind more

a how to headwinds that side, mix but And then any there's forward? we lot gross margin think year, on I know this related margin should about on Bhaskar, going with the brand going

Scott Thompson

Thank you.

we is -- it has in XXXX the left As U.S., know, life. And the Sealy it Sealy the its of marketplace, U.S. in the as bedding last this been year largest and is launch before in brand the end challenged you was in product largest

this the so at would it Stearns Foster. and of retailers Foster answered question the directly. been we that probably the Sealy potential And freshness I'm to be is of Tempur & the in expectation I that where because our think through I feel its that But a in I it's XXXX product, placed, looking And the performance. excitement growth really innovation the and big that's would refresh. and don't' exceed Foster, expect for

And that's challenged. ASP few Sealy that I thing impact this, that going Foster. other the than And the Tempur -- is, & lower Stearns to but think is last been think a you has I the years, more is customer and over know generally lower end

So Tempur be by year. and will it Foster this it Stearns impacted with to is that. But I Sealy's think expect -- more would even I than & some that, growth be

Bhaskar Rao

bit gross I When again, just about margins think some I basis drive. and drivers, on moment a let's basis, talk about some think XXX continues grow today, primary productivity, of is have going basis little here be above. commodities. item of looks a going which the headwind. XXXX is expect, would would like-for-like a for a to for The bit like about offset will to Tempur to it I points, Tempur to like-for-like Sitting again maybe commodities on we're that be a productivity by

However, you going be it's put for two favorable still to together, those us.

out called that FX. other The we was item

are in margin some line through U.S. countries, is there is to going that dollar where relative we gross buy within strong The currencies. So those U.S. dollars. geos

of headwind million. an us So FX $XX about causing

couple little assumed a here us bit category to models mix. back down, with I stable, finally, imply half, a and then bit then would the for that up which going Sitting half. I'll will today be first of a little down is in the the would And industry, the is headwind a of we've items, the in be close four it say kind

So consumer back, dilutive assuming which low-end to rate. great that, would for that be comes EBITDA, not we're however,

that. business this the mindful talked reasons. we about. point, be thing of of that one So favorable any at is mix of not couple that we're for a foreclosed be considering But to will One, the

as box. our big associated the some business as was with OEM Foreclosed well of

And will that drive in basis Sealy is sitting which well. international which item favorability standpoint then faster, other point like-for-like, is be all from XXX grow be at here will expected That's help -- growth. as today least the to of that will the bit a Tempur should a favorable

Operator

comes question last with Reuter Bank from America. William Our of

William Reuter

if the place. put into it. XX I was just any that place That's And you've the work any headwinds. reciprocal I announced of policies in put were margin tariffs February so Thursday, last if wondering new one. be to in done may that were that given if around you've have terms mean could what potential thoughts

Bhaskar Rao

about they moving tariffs, are When I around think a lot.

it our it have it's tariff some about because good only stuck not it have when and the our we're about opportunity de that it tariffs reciprocal of a we're date, think to and the it's currently from goes is gives is -- relates there. have we as China. feels aluminum when it see it standpoint there forward when mean, in we're the us Relatively You're of to maybe when like out way thinking in Mexico an with we P&L. ones pricing how thinking suppliers, Canada, or we steel, it China, right. or impact that and one tariff, it whether I the those that is minimis between about that relationship are or the lag do think to the And tariffs, thinking around about in the I gets do enacted

do what things lot we to and that around. are what on stuck. a have that's has say words of have And we visibility So moving

We forecast. that have

comes be -- countries by to As often Vietnam. it those the one mind tariffs, is that relates that is the adjustable I one base may to believe would reciprocal our thing that I business. impacted of

again, flexibility. have we So

also We upside have uncertainty as as it around. us to opportunity what But see front of is there's And relates a to the well. the move things that. in we of lot

in go So they tariffs, ways. both

U.S., for so goods finished those and into tariffs coming the are those us it's opportunity as as well. an So

Scott Thompson

obviously, but right to going Yes. any from imports. are complicated I on now, benefit it's put mean, that we're tariffs

general, guy that with our an the that us in size we call smaller in our a good and stuff ones just our of easier components get standpoint, it's advantage don't that Then competitive people who probably tariffs that's us volume, to kind the a actually from for that of on have it's So buy. terminology. and issue because our than the to suppliers deal

relatively it a do from competitive it standpoint, And -- all speaking. any call -- actually of we'll it's us pain I you much in better competitive of as kind a a is puts position think before it all it's then as mitigation. position, So

if about the be we're quickly. talking and has quite talking like if auto history industry of industry most industry a on are move working on production passes you're within of industry this then It's consumer, about, suppliers it that's And through moved working can not when components where components, And the production. frankly, And to increase very true a standpoint, ends of cost to and that up where that can't you move you period have what stuff, from an reasonable happening. in our your what all the the time.

and have So guarantees with all in may all, the of know where is factors impact to a don't or few insignificant are X quarter way competitive little to exactly quarters, I how depending -- no when within a impact things tariffs think be would for But because on us a the position. I expect the about it land, of land. going we think because I mitigating our any

Operator

Scott time. turn Thompson at for no call now are further will the remarks. closing There over I this to questions

Scott Thompson

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

Operator

disconnect your Ladies for that your thank today. participating concludes you this for and you gentlemen, conference and please We lines. ask call

Tempur Sealy International (TPX) 20 Feb 252024 Q4 Earnings call transcript