Tempur Sealy International, Inc. (NYSE:TPX) Q3 2023 Earnings Call Transcript

Operator: Thank you. One moment for our next question, please. And next question comes from the line of Atul Maheshwari with UBS. Your line is now open.

Atul Maheshwari: Good morning. Thanks a lot for taking my question. Scott, the question that we keep getting from investors who are taking a fresh look at the TPX story is that who is TPX getting all the share from and why is it getting share, so really a two-part question, can you provide some color on the who and then on the Y, how’s the product marketing strategy at TPX different? And then related to that, Scott, where was the incremental opportunity to continue to gain share given your order, your robust share position in the U.S. and then what is the risk that some of your competitors might ultimately catch up, the ones who have been disruptive? Thank you.

Scott L. Thompson: Sure. Sure. Good, detailed question. First, I don’t want to skip the international market. So, first of all, just internationally taking a large amount of share obviously, with what we reported this quarter, lots of competition out there. So we’re not going to talk about it, because it takes all day to go through each country. So I think your question really is more pointed towards the U.S. Okay, so I’m going to focus on the U.S. But let’s not forget, internationally, we’re taking a good bit of share all around the world. So when you go to the U.S. policy, wait a second, I think this is — I think we’re taking share from everybody. I mean, there might be a smaller player somewhere in the group but, I think we think the industry was down call it low double-digits.

I think that’s not far off what our friends over at Leggett think. I think as others report their numbers, we can kind of solidify and perfect that number. And so if you’d call the industry, let’s call it down 10% for talking terms. And in the U.S., Bhaskar we were down like one or two — something like that. So if you play with the numbers, that means that other competitors had a really tough time. When I sit on sales calls, I don’t hear of another competitor taking share from us. So I’m going to say we’re taking a little bit of share from probably most everybody. At some point, and I’ve said this in the past, the share gains probably will reduce as a percentage because our base is bigger and their base is smaller. But by then I would expect that the industry also is probably in recovery.

But, I think there’s still further share gains. We’ve got some stuff in the works and I would expect from what I’ve seen in 2024 that we would take share in the U.S. and certainly take share internationally. Well you kind of asked about how are we doing it and what’s our secret sauce. I mean, look it’s not too big a secret. It’s — we put the money in the beds with great product, we don’t cut corners, we don’t optimize to the detriment of our retailers or to our customers and our product. We invest in our people and our sales force has been very stable and productive. And our marketing departments and our staff have been very stable. We invest in people in good times and bad times. We believe in advertising. It drives the industry. And, we’ve been advertising significantly.

It will continue to advertise. And we make what I think at times are, long-term decision over the short-term decision. And in this quarter there were some decisions that we made during the quarter that I think will pay dividends to us in 2024. And we don’t have discussions about optimizing quarters. We have discussions about optimizing our competitive position. So hopefully that’s helpful.

Operator: Thank you. One moment for our next question, please. Our next question comes from the line of Keith Hughes was Truist. Your line is now open.

Keith Hughes: Thank you. Had a question on international. Amongst that 7% organic growth, you talked about how [indiscernible] versus that, and are we starting to feel the influence of the new product launches, is there enough out there to be affecting the numbers?