The country's largest mattress manufacturer, Sealy Corporation (NYSE: ZZ) posted 1Q 2008 numbers that, while not all that good were better than expected. This caused investors to bid up the stock 6.5% to close at $7.56 today.
Overall, net sales declined 5% to $392 million in 1Q 2008. The decline would have been much larger were it not for a 15% increase in international sales. Sales by unit volume were off by over 10% but the average selling price per unit declined by much less.
Like many companies, Sealy has been hit by large costs increases in raw materials, particularly steel and foam. The company has kept a tight rein on expenses and reduced its debt by 1% to $795 million. Management recently voted to suspend the dividend. Generally not a good idea to save money at the expense of investors.
Interim CEO Larry Rogers believes the company will return to long-term growth and profitability by concentrating on specialty bedding products. This is a fancy industry term for mattresses with a price tag over $1,000. Sealy plans to introduce new Posturepedic specialty bedding products throughout 2008. At least, anxious investors can get a good night's sleep to face the latest economic news the next day.
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