LEXINGTON, Ky. — Tempur Sealy International Inc. Thursday provided an update on its second quarter performance. Quarter-to-date orders have significantly improved and the Company now expects total second quarter net sales to be down approximately 30% compared to the prior year. This improvement in trends has been broad-based, driven by continued robust growth from global e-commerce, the re-opening of domestic retail stores, and positive trends in Asia and Northern Europe.
In the U.S., the Memorial Day promotion is going well, and the Company has implemented tools to further support third-party retail store openings and restart industry growth. The Company recently began offering its Clean Shop Promise™ protocol, which is being broadly adopted to provide customers with a sense of comfort as they return to shopping in stores. Additionally, the Company significantly increased Tempur-Pedic brand advertising spend in the U.S. for the second quarter versus prior expectations. Since stores began reopening to consumers, early reports from third-party retailers are encouraging, with most experiencing historically strong closing rates on reduced floor traffic, in addition to continued strength in e-commerce offerings.
Although the Company previously announced it expected an unadjusted EBITDA loss for the second quarter, the Company now expects to achieve at least breakeven unadjusted EBITDA for the second quarter of 2020 due to the improved sales outlook.
Tempur Sealy Chairman and CEO Scott Thompson commented, “Our success in mitigating the impact of the pandemic on our operations quarter to date is a testament to the resiliency and flexibility of our business model, the strength of our brands and product offerings, and the dedication of our team. Despite the challenges presented by COVID-19, we now believe we will report at least breakeven unadjusted EBITDA for the second quarter. We are very pleased with the progress made during this challenging period to date, including the over 100% growth in our U.S. e-commerce business. We will continue working to mitigate the COVID-19 impact while optimizing our competitive position.”
The Company noted its expectations are based on information available at the time of this release, and are subject to changing conditions, many of which are outside of the Company’s control. The Company also noted that it was providing this update due to the unusual circumstances resulting from the COVID-19 pandemic and related economic downturn. The Company is not adopting any policy or practice of providing any mid-quarter updates on net sales, EBITDA or other aspects of its financial performance or providing net sales by month at any time.
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