The second quarter delivered a mixed bag for the bedding segment’s publicly traded companies. While Purple stood out as the only one of four to post a sales increase in sales for the quarter, the others — Leggett & Platt, Sleep Number and Tempur Sealy International — saw sales slide in comparison with the prior year period.
While the companies’ earnings releases and calls with analysts give us a snapshot into the health of each individual company, they also give us a glimpse into trendlines and overall themes that are emerging in the industry. The commonalties are telling, and this quarter, in particular, the companies were reading from similar playbooks when it came down to outlooks.
The telling aspect was that three of the four adjusted their forecast downward for the remainder of the year. And the outlier — Sleep Number, in this instance — had adjusted its outlook two quarters ago. A company here or there making adjustments doesn’t quite have the same bell ringing as when companies seem to move en mass down the same slope.
Since Sleep Number sounded the signal early, we’ll start there. The vertically integrated sleep retailer said in its 2023 end-of-year earnings report that it expected the “mattress industry demand to remain pressured.” Because of that, the company revised its expectations to adjusted EBITDA of $125 million to $145 million “with net sales down mid-single digits vs. prior year on a low-single digit demand decline.”
One edit was that for the balance of this year, the company predicts that demand and net sales will be “flat to down low-single digits compared with last year.” That offers a somewhat brighter perspective.
The company’s sales dropped 11% to $408.4 million in the most recent quarter on what the company called a “prolonged industry recession.” Sleep Number also shared a net loss of $5.1 million, a swing from net income of $754,000 in the second quarter last year.
Leggett & Platt shared its second quarter results earlier this month with a net loss of $602.1 million in the second quarter and net sales of $1.1 billion, an 8% slide from $1.22 billion in the prior year period. The bedding products segment experienced a 13% decrease in sales, primarily due to the loss of a key customer.
The company, which has historically served as a bellwether for the industry in good and bad economic times, inched its full year 2024 guidance down slightly to include expected sales between $4.3 billion and $4.5 billion, down 5% to 9% when compared with 2023. Leggett & Platt’s prior guidance had been for sales to land between $4.35 billion and $4.65 billion for the year.
Bucking the sales trend for the quarter, Purple Innovation reported a 2% net revenue increase, up from $117.9 million in the second quarter last year to $120.3 million. Headwinds, however, are looking to snatch some of that momentum, and executives said based on its first half results and ongoing industry-wide demand declines a revision was needed.
The company now expects full-year net revenue to be in the range of $490 million to $510 million compared with its prior range of $540 million to $560 million.
Last, but not least, Tempur Sealy reported a 2.8% drop in net sales to $1.2 billion for the quarter. Its North American arm reported a 3.8% drop in total net sales, and relatively flat international sales. The company’s net income climbed 14.8% to $106.1 million, up from $92.4 million in the same quarter last year.
For the full year 2024, the Tempur Sealy revised expectations for an adjusted earnings per share range of $2.45 to $2.65 based on the company’s outlook that 2024 sales will be consistent with 2023. In its first quarter report, the company expected earnings per share of between $2.60 and $2.90.
What does it all mean? It’s bumpy out there, and much like summer turbulence, there’s more to come before we get through these challenging times.