We recently discussed home-related retail categories and the prospect of a better 2024, following a bruising 2023. In that, we had pointed to improving visitation trends for mattress retailers during November/December. This week, we got an affirmation of that improvement with Tempur Sealy reporting +11.1% revenue growth in the U.S. for its direct business (Tempur-Pedic stores and Sleep Outfitters), a notable improvement from Q3 2023’s +0.7% revenue growth rate. The earnings release quotes Tempur Sealy CEO Scott Thompson saying, "We are pleased to issue 2024 guidance that targets growth in both adjusted earnings per share and sales. Underpinning our guidance is recent distribution gains and a belief that category demand is stabilizing around the world from negative year-over-year industry units. We expect full-year 2024 industry units to be consistent with 2023 levels.” (As of October, the category was down low-double-digits in volume in the U.S. for the year.) Below, we show improved traffic in the chart below for mattress retailers. Visits for January were down (reflecting the adverse weather conditions) but improved to traffic is down in line with December’s rate.)
Thompson continued, “We're in an environment where interest rates are trending down. If you look at the bedding industry--and we just got back from the Vegas bedding show--there's good innovation in the industry. We've got some new product coming out and others have some new product coming out that's very interesting. We've also seen some of our larger retailers refocus on advertising, and we've got several of them increasing their advertising budgets going into 2024. So yes, in general, it feels like I've used the term balancing around the bottom. We're kind of bouncing around the bottom. If you go back and look at Q4 2024, and look at it by month, October was not good in the U.S. and then it got better throughout the quarter. And then you get to the January period. Obviously, it's very difficult in this world to forecast. If we look at our own order book in January, it's positive. If I look at our online sales in January, it's up double-digits. It looks like some green shoots, but you have to dampen that when you look at some of the details, the order book is positive, but it's concentrated in some larger customers. It's not as broad-based as we'd like to see.”
