Trinity, North Carolina - Sealy Corp.'s net sales for the third quarter of 2007 increased 7.5 percent to $446.4 million against the same quarter a year ago. Unit volume growth of 16.9 percent was partially offset by an 8.0-percent decrease in average unit selling price (AUSP), said Sealy, which lays claim to the title of the world's largest bedding group.
Costs of fire retardants and raw materials price increases had a negative effect on the mattress-maker's results for the quarter.
The group's domestic sales rose $16.7 million to $335.1 million (10.3-percent rise in unit volume; 4.6-percent decrease in AUSP).
Sealy said it continues to focus on growth and had strong sale in the Posturepedic Reserve beds and visco and latex speciality products.
The drop in AUSP largely follows a lower proportion of sales from Posturepedic products and some strategic pricing actions.
International sales rose $14.6 million or 15.1 percent to $111.3 million, a 32.6 percent increase in unit volume, again partially offset by a decrease in AUSP.
These changes were a result of increased sales of lower-priced OEM products in Europe as well as select pricing actions in Canada. The group said it had strong net sales growth in Mexico and Argentina.
Third quarter gross profit was $179.9 million, compared to $185.2 million in Q3 last year.
This decline was driven, said Sealy, "primarily by the addition of $9.5 million of flame retardant materials to our products in the US," as well as by the above-mentioned product mix changes and pricing actions.
Sealy said that, per unit, its material costs rose 7.9 percent in the US compared to Q3 2006. This increase was partially offset by improved productivity and better yields on raw materials, the bedding producer added.
"During the third quarter we successfully executed on our strategy to drive unit volume across all portions of the market, secure real estate with our retailers and increase Sealy's market share both domestically and internationally while delivering solid cash flow," said David McIlquham, Sealy's chairman and chief executive officer, in a 5 Oct statement.
"We also recognise there are areas within our innerspring business where we must improve our performance," he added.
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