Lexington, Kentucky — Bedding and foam company Tempur Sealy experienced a fall in sales of 12% between 2016 and 2017 to $ 2.75 bn.
The company's earnings before interest, taxation, depreciation and amortisation fell from $507m in 2016 to $403m in 2017. This is a drop of 21%.
The fall in revenue resulted from the loss of a significant contract with US retailer MattressFirm. MattressFirm is part of Steinhoff of South Africa.
Scott Thompson, Tempur CEO, said: 'Adjusted Ebitda was at the high end of our guidance, despite rising commodity costs. Sales in North America grew by 19% excluding MattressFirm.'
This growth in sales demonstrates brand strength even as the current products reach the fourth year of their life-cycle, he said.
'We enter 2018 as a much stronger company, supported by a diversified base of retail partners and a growing direct-to-customer business,' he added.
Thompson said that Tempur would be launching a new range of more expensive mattress products in the near future.
In the last quarter of 2017, sales in the North America division were $485m compared with $623m in the 2016 quarter. In Q4 2016, Tempur was supplying MattressFirm.
Net sales at the international division were up 10% to $163 m in the final quarter of 2017. Tempur added that the international numbers include a $4.6m restructuring charge. This relates to winding down some operations in South America and 'leadership termination charges' there.
