Trinity, North Carolina -- Sealy Corp., a leading global bedding manufacturer, saw its fourth quarter sales decrease by $27.3 million to $269.3 million, compared to the same prior year quarter. Gross profit for Q4r decreased by $24.8 million to $98.1 million, while income from operations decreased by $25.1 million to $3.7 million.
Sealy made a net loss from continuing operations of $14.0 million, compared to net income from continuing operations of $3.5 million in the prior year quarter. Adjusted earnings (EBITDA) decreased by $24.7 million to $15.1 million compared to Q4 2010.
"We were disappointed with our performance in the fourth quarter and the full fiscal year 2011," said Larry Rogers, Sealy's president and ceo, adding that the results were not in line with Sealy's goals: "We are making operational changes to improve our future business results."
For Q4, total US net sales decreased 9.6 percent to $203.0 million from Q4 of fiscal 2010. Sealy said the decrease in unit volume was primarily because sales of lower price products fell due to increased competition.
International net sales decreased $5.7 million, or 7.9 percent, from Q4 fiscal 2010, to $66.3 million, a drop Sealy attributes primarily due to lower sales in Canada.
The drop in profit was largely due to a decrease in gross profit margin in the US and Canada. US gross profit margin decreased 5.8 percent to 35.0 percent as a result of higher raw material prices, especially related to foam and steel, which negatively impacted gross margin by 3.5 percent.
For the full fiscal year 2011 (ended 28 Nov) Seay's net sales rose 1.0 percent to $1230.2 million, with gross profit of $478.7 million, or 38.9 percent of net sales, versus 41.8 percent of net sales, for fiscal 2010. The year's net loss from continuing operations was $5.7 million, with a net loss from discontinued operations of $4.2 million.
Adjusted fiscal 2011 earnings (EBITDA) decreased 29.0 percent to $126.3 million, or 10.3 percent of net sales, from 14.6 percent in 2010.
"As we look forward into 2012, we expect the industry to continue to experience higher growth in upper and lower priced product rather than growth in products at the middle price points," said Rogers, noting that Sealy is to focus on launching higher value products and developing its new Specialty Division.
Organisational and operational changes will allow Sealy to improve sales and earnings in 2012, concluded Rogers.