(RTTNews) - Tuesday, mattress maker Sealy Corp. (ZZ: News ) reported a rise in profit for the third quarter on improved gross margins, notwithstanding a decline in revenues negatively impacted by a weak retail environment. Earnings per share, however, dropped from last year on a higher share count for the quarter.

The Trinity, North Carolina-based company's net income for the third quarter increased to $12.10 million from $11.00 million in the year-ago quarter. Earnings for the quarter decreased to $0.05 per share from $0.12 per share in the prior year quarter on a higher share count.

On average, eight analysts polled by Thomson Reuters expected the company to earn $0.05 per share for the quarter. Analysts' estimate typically exclude one-time charges and gains.

Quarterly net sales dipped to $349.60 million from $405.00 million in the same quarter last year. The Street estimated revenues of $335.24 million for the quarter.

Total U.S. net sales for the quarter were $256.8 million, down 13.3% from a year earlier. Wholesale domestic net sales slipped to $251.8 million from $289.0 million in the year ago period, impacted negatively by a soft retail environment. In the U.S., average unit selling price increased 0.1%, while unit volume declined 12.9% on a year-over-year basis.

International net sales for the quarter dropped 14.7% to $92.8 million from the same period last year. Excluding the effects of currency fluctuation, net sales declined 4.3% from the year-earlier quarter, primarily due to declines in finished goods sales in Europe and, to a lesser extent, the weak retail environment in Latin American businesses.
Income from operations for the quarter was $39.20 million, compared to $32.22 million in the year-ago quarter. Gross margin for the quarter increased 126 basis points to 41.8% from the previous year quarter.

For the nine-month period, net income decreased significantly to $11.60 million or $0.09 per share from $39.11 million or $0.42 per share in the same period last year. Net sales for the nine months declined 18.3% to $958.00 million from $1.17 billion last year.

Larry Rogers, President and Chief Executive Officer, Sealy's said, "The completion of our comprehensive refinancing plan in July, coupled with our strong cash flow generation and our negotiated ability to pre-pay a portion of this debt, has created a stable long-term financial position with greater financial flexibility for the company.

The company said while it expects market conditions to remain challenging, it is starting to see positive signs in the market in terms of volume and pricing, although not with sufficient consistency to definitively conclude we are in a turnaround.

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