The difficult consumer spending environment combined with rising commodity cost pressures is expected to continue for the next few quarters.
David J. McIlquham, Chairman and CEO, Sealy

Sealy (NYSE:ZZ), the worlds leading bedding manufacturer, announced net sales for the fourth quarter ended December 2, 2007 increased 11.6% compared to Q4 2006 on unit volume growth of 20.1%. U.S. net sales increased 9.4% on a 12.5% increase in unit volume, partially offset by a 2.8% decrease in average unit selling price (AUSP).

Sealy's strongest growth came from its Sealy Posturepedic Reserve beds along with its visco and latex specialty bedding products.

As a percentage of net sales, gross profit fell to 40.8% from 44.9% in the fourth quarter of fiscal 2006. The decline in gross profit was driven primarily by the addition of flame retardant materials to the Company's products in the U.S..

"It was a challenging year for Sealy as our fiscal 2007 financial results did not meet our expectations. The difficult consumer spending environment combined with rising commodity cost pressures is expected to continue for the next few quarters," said David J. McIlquham, Sealy's Chairman and Chief Executive Officer.

Mr. McIlquham continued, "We have begun implementation of some key strategic initiatives that we believe are necessary to drive profitable growth in the current environment. These include driving AUSP growth through new product mix and selective price increases, controlling our product launch costs, creating new advertising strategies for retail and our Sealy Posturepedic brand, expanding our latex production and product lines, achieving meaningful cost reductions in fixed operating expenses and infrastructure, and building on our strength in our international markets. Our long-term outlook remains favorable with solid growth drivers, and we know that we must continue to invest and innovate to protect and strengthen Sealy's leadership position in the industry for improved and sustainable results."