Tempur Sealy(TPX) - 2024 Q1 - Quarterly Results

Financial Performance - First Quarter 2024 net sales were $1.2 billion, consistent with the prior year, with a reported decrease of 1.5% from $1.208 billion in Q1 2023[3] - Net income decreased by 10.6% to $76.3 million, down from $85.3 million in Q1 2023[3] - Adjusted EPS for Q1 2024 was $0.50, a decrease of 5.7% from $0.53 in Q1 2023[3] - North America net sales decreased by 2.0% to $901.1 million, while International net sales remained relatively stable with a decrease of 0.1% to $288.3 million[9] - Net sales for the three months ended March 31, 2024, were $1,189.4 million, a decrease of 1.5% compared to $1,208.1 million in the same period of 2023[24] - Basic earnings per share decreased by 12.0% to $0.44, compared to $0.50 in the same quarter of 2023[24] - Adjusted net income for the quarter was $89.7 million, compared to $92.9 million in the same period last year[39] - Consolidated net sales for Q1 2024 were $1,189.4 million, a decrease from $1,208.1 million in Q1 2023[44] Profitability Metrics - Consolidated gross margin improved by 1.7% to 43.1%, compared to 41.4% in Q1 2023[7] - Gross profit increased by 2.5% to $512.6 million from $499.9 million year-over-year[24] - Operating income decreased by 8.2% to $131.5 million, down from $143.3 million in the prior year[24] - Adjusted gross profit for Q1 2024 was $515.7 million, with a margin of 43.4%, compared to $504.8 million and a margin of 41.8% in Q1 2023[44] - Operating income for Q1 2024 was $131.5 million, representing an 11.1% margin, while Q1 2023 reported $143.3 million with an 11.9% margin[44] - EBITDA for Q1 2024 was $180.3 million, down from $187.6 million in Q1 2023[46] Cash Flow and Assets - Record cash flow from operations reached $130 million in Q1 2024[1] - Cash and cash equivalents increased to $92.5 million from $74.9 million at the end of December 2023[27] - Total assets rose to $4,585.8 million, up from $4,553.9 million at the end of the previous year[27] Debt and Leverage - Total debt at the end of Q1 2024 was $2.6 billion, with a leverage ratio of 2.85 times based on consolidated indebtedness less netted cash to adjusted EBITDA[12] - The ratio of consolidated indebtedness less netted cash to adjusted EBITDA was 2.85 times for the trailing twelve months ended March 31, 2024, below the 5.00 times requirement[49] - Total debt, net as of March 31, 2024, was $2,573.7 million, with consolidated indebtedness less netted cash at $2,501.9 million[51] Acquisition and Expenses - The pending acquisition of Mattress Firm is expected to close in 2024, pending FTC approval, which is anticipated to be completed in Q2 2024[6] - Corporate operating expenses increased to $47.7 million, primarily due to transaction costs related to the Mattress Firm acquisition[12] - The company incurred $14.8 million in transaction costs in Q1 2024 related to the pending acquisition of Mattress Firm[53] - Operational start-up costs in Q1 2024 amounted to $3.1 million, up from $1.7 million in Q1 2023[53] - The company recognized $58.6 million in transaction costs associated with the pending acquisition of Mattress Firm over the trailing twelve months ended March 31, 2024[53] Sales Channels - The wholesale channel generated $885.8 million in sales, down from $912.6 million in the prior year, while the direct channel saw an increase to $303.6 million from $295.5 million[30]