Dive Brief:
- Tempur Sealy International reported a 2.8% dip in Q2 net sales to $1.2 billion. Its North American arm reported a 3.8% drop in total net sales and its international business remained relatively flat year over year.
- The company’s net income jumped 14.8% to $106.1 million, up from $92.4 million in the year-ago quarter. Operating income rose 9.1% to $173.3 million, up from $158.8 million year over year.
- “Regarding the FTC's challenge of the Mattress Firm acquisition, we are confident in the pro-competitive rationale for this transaction and look forward to presenting the facts of our case,” CEO Scott Thompson said in a statement. “We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025.”
Dive Insight:
Tempur Sealy has already entered into several agreements with suppliers that will kick in after the deal with Mattress Firm closes, including with one of Mattress Firm’s medium-size mattress suppliers. Those deals are “consistent with our plan for Mattress Firm to continue as a multi-brand retailer,” Thompson said on a call with analysts.
In May last year, Tempur Sealy International announced a deal to buy Mattress Firm for roughly $4 billion in cash and stock. The company originally expected to close the deal in the second half of this year pending approvals.
However, the Federal Trade Commission voted unanimously last month to block the acquisition. The regulatory agency said that the merger would create “enormous power at multiple parts of the mattress supply chain” and allow the newly formed conglomerate to “suppress competition and raise prices for mattresses for millions of consumers.”
In response to the agency’s decision, Tempur Sealy said in July that it had been “working constructively” with the FTC to secure regulatory approval and was “disappointed that the FTC has initiated litigation.”
