Financial Data and Key Metrics Changes - Global net sales for Q4 2018 were $676 million, an increase of 7% year-over-year [24] - Adjusted gross margin was 42%, and adjusted operating margin improved by 20 basis points to 13.4% of net sales [24] - Adjusted EBITDA increased to $118 million, with adjusted earnings per share for the quarter at $0.90 [24][36] Business Line Data and Key Metrics Changes - North America sales increased by 9%, with wholesale channel growth of 8% and direct channel growth of 17% [25] - Tempur sales grew by 24% in Q4, while Sealy sales were slightly up, excluding Stearns & Foster, which is undergoing a product transition [25][26] - International net sales increased by 2% on a reported basis and 5% on a constant currency basis, with direct channel growth of 37% [30][33] Market Data and Key Metrics Changes - Worldwide sales in Q4 increased by 7%, driven by 9% growth in North America [21] - The U.S. bedding distribution landscape saw significant changes, including store closures and retail bankruptcies, impacting overall market dynamics [12][13] Company Strategy and Development Direction - The company is focused on completing the launch of refreshed Tempur-Pedic and Stearns & Foster lineups, aiming to elevate average selling prices [16] - A retail edge program is being implemented to enhance relationships with key retail partners and improve their marketing strategies [17] - The company plans to open over 20 additional Tempur-Pedic stores in 2019, expanding its direct-to-consumer presence [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2019, anticipating a return to earnings growth and improved market conditions following a challenging 2018 [15][20] - The company expects commodity cost inflation to abate in 2019, contributing to a more favorable operating environment [20] - Management highlighted the importance of the upcoming product launches and their potential to drive sales and profitability [44][49] Other Important Information - The company resolved litigation with Mattress Firm, normalizing the relationship between the two entities [50] - The company anticipates adjusted EBITDA for 2019 to be in the range of $425 million to $475 million, reflecting strong sales growth and pricing benefits [38] Q&A Session Summary Question: What are the chances that settling litigation with Mattress Firm could lead to reunification? - Management indicated that communications with Mattress Firm are constructive, but no further developments were reported beyond the settlement [53] Question: What is driving the low-single-digit decline outlook for Sealy in 2019? - Management noted that Sealy had a good performance in Q4, but expects headwinds due to tough comparisons and weakness in the below $1,000 segment [55][56] Question: How does the company view the competitive landscape following Mattress Firm's store closures? - Management believes Tempur gained significant market share, but it is difficult to quantify the exact impact of Mattress Firm's closures [74][76] Question: How does the company plan to allocate capital now that it is within its targeted leverage range? - Management indicated a focus on debt reduction in the near term, with potential for shareholder returns once cash flow allows [81] Question: What is the expected mix of retail and wholesale in the coming years? - Management anticipates a gradual increase in direct-to-wholesale sales, potentially reaching around 20% in a few years [82] Question: How will the launch of Breeze products impact the Tempur business? - Management expects the majority of the Breeze launch to occur in Q1, with a potential negative impact primarily in that quarter [90]