Tempur Sealy (NYSE: TPX) reported Q4 EPS of $0.90, $0.06 worse than the analyst estimate of $0.96. Revenue for the quarter came in at $676.1 million versus the consensus estimate of $660.24 million.

• Total net sales increased 7.1% to $676.1 million as compared to $631.4 million in the fourth quarter of 2017. On a constant currency basis(2), total net sales increased 8.2%, with an increase of 9.1% in the North America business segment and an increase of 5.2% in the International business segment.
• Gross margin under U.S. generally accepted accounting principles (\"GAAP\") was 41.9% as compared to 42.4% in the fourth quarter of 2017. Adjusted gross margin(2) was 42.4% in the fourth quarters of 2018 and 2017.
• GAAP operating income decreased 29.7% to $57.9 million, or 8.6% of net sales, as compared to $82.4 million, or 13.1% of net sales, in the fourth quarter of 2017. Operating income in the fourth quarter included $21.2 million of charges associated with a wholesale customer bankruptcy and other adjustments. Adjusted operating income(2) increased 9.0% to $90.8 million, or 13.4% of net sales, as compared to $83.3 million, or 13.2% of net sales, in the fourth quarter of 2017.
• GAAP net income decreased 74.6% to $12.3 million as compared to $48.4 million in the fourth quarter of 2017. Adjusted net income(2) increased 4.0% to $49.7 million as compared to $47.8 million in the fourth quarter of 2017.
• Earnings before interest, tax, depreciation and amortization ("EBITDA")(2) decreased 16.2% to $77.9 million as compared to $93.0 million for the fourth quarter of 2017. Adjusted EBITDA(2) increased 5.5% to $117.9 million as compared to $111.8 million in the fourth quarter of 2017.
• GAAP earnings per diluted share ("EPS") decreased to $0.22 as compared to $0.88 in the fourth quarter of 2017. Adjusted EPS(2) increased 3.4% to $0.90 as compared to $0.87 in the fourth quarter of 2017.
• The Company ended the fourth quarter of 2018 with total debt of $1.7 billion and consolidated funded debt less qualified cash(2) of $1.6 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to adjusted EBITDA(2) was 3.87 times for the trailing twelve months ended December 31, 2018.

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "In 2018, we successfully launched our new Tempur-Pedic Adapt line of products to expand our market share in the competitive $2000 to $3000 price band. Going into 2019, we look forward to completing the North American Tempur-Pedic rollout with our highly anticipated Tempur Breeze line of products, as well as, launching our entirely new line of Stearns & Foster products. We believe these launches in 2019 will solidify our market position in premium bedding. We believe our focus on delivering high quality bedding products, improving the reach and effectiveness of our marketing, expanding our omni-channel strategy, and pursuing on-going productivity initiatives sets the company up for future earnings growth."

Financial Guidance

For the full year 2019, the Company currently expects adjusted EBITDA(2) to range from $425 million to $475 million.

For earnings history and earnings-related data on Tempur Sealy (TPX) click here.