TPX
#<UNK>, the way I would think about this is we've raised prices, as <UNK> mentioned, on both Tempur-Pedic and a small range of Sealy brand products.
Those are mattresses, so when you think about our pricing, obviously people should focus on what we specifically raise, so that's the mattress portion of our business and only a select range.
So I would be thinking about a low single-digit percent increase
For mattress.
Hi, <UNK>, good morning.
Without getting too granular, I can tell you that our mattresses as a component of the bedding were positive and we also had a steady attach rate on adjustables on our Tempur-Pedic brand.
We do see adjustables over the long term as something that, from an attach-rate perspective, has room.
Particularly on our Sealy brand side, where as you mix up within the brands and we have innovation that we've had with Stearns & Foster and our Posturepedic Hybrids, we think that there's an opportunity there for additional adjustable sales and attach rates.
As you may remember from the Las Vegas bedding, we just recently introduced the new adjustable, the Ease by Sealy, which I think has really nice features and functionality at a sharp rise point, so we expect improving performance from adjustables over time.
Yes.
When we ---+ thinking about what we've got going in, <UNK>, for 2016, the Breeze collection and what we're doing, as well as building on the very positive launch we've had from Flex, we certainly would expect unit growth from our Tempur-Pedic brand business.
The attach rate, even if it was just flat, you would see growth as a result.
Hello.
Hey, <UNK>.
How are you.
Recent quarters being third and fourth.
Or fourth and January.
I would tell you that we feel like ---+ we're talking North America right now, specifically.
We can talk about the other markets if you want to, but right now we are talking about North America.
I would tell you demand feels good.
As I said in the prepared remarks, January started out in a very solid fashion.
And from our viewpoint, it looks like North American consumer is in very good, very good shape.
Sure.
Directionally, it is pretty easy.
We expect it to go up.
As we talked about pretty clearly on the third-quarter call, my recollection is Sealy margin had declined 100 basis points in the third quarter year over year.
In the fourth quarter, what we are saying is that, that deterioration stopped and it became stable, so we will call that improvement, but we certainly would not call that success.
So our clear indication is we would expect to have more good news about the Sealy margin initiatives that we put in place throughout the year.
It will take several quarters to get where we probably want to get to, but we certainly expect the Sealy margin to improve some during 2016.
We don't really have time on the call to go through the initiatives, but I can tell you that the entire North America team is focused on Sealy margins, and like I said, we are beginning to see real progress as the numbers come in.
If you'll give me one more quarter and ask me that question on the first quarter, I think I can probably go into more detail, but I appreciate the thought.
I don't tie the two together.
I will let <UNK> take a crack at this after me.
We are committed to advertising for the long term and I don't see a trade-off between one pot of cost and advertising.
Advertising drives this business.
We are founded on it and so we will advertise whatever we think the right number is regardless of what's going on in other cost initiatives.
Having said that, do we have cost initiatives in place.
Sure.
We are working in other cost areas, but I really don't tie the two together.
<UNK>, you have any other color there.
I think you hit the high points.
We're going to increase our advertising spend, <UNK>, and that will go up a little bit on a rate basis and that's all embedded in the guidance.
Yes, your math is right.
If you go through the leverage target and you look at expected operating cash flows, the current authorization, the buyback looks relatively small compared to what the potential could be.
What I was trying to say in my prepared remarks is we are going to ---+ we've got authorization for $200 million.
We see this as the start of a long-term process and we expect future authorizations.
We have some debt agreements that we have to work through and <UNK> can walk you through that in a minute, but no, I would see this as the initial share buyback.
Hey, <UNK>, we have the credit facility, which we are going to be working on and then we have the money 20/20 high-yield bonds.
Those both would ---+ the first step would be to, as <UNK> alluded to, work through the credit facility, which is something we've got under way and then the bonds would be a factor.
Those are callable in December, so that's another thought to think through, and I would be happy to talk to folks about that in detail since that's all disclosed already on additional calls.
I'm going to have to be a little bit careful with your question because, obviously, there's competitive information that you are fishing around, which I'm probably not going to get anywhere close to on an open call.
I think what I would say is, the first thing I did when I got here was to look at the pipeline because I do think that's a critical part for the Company's continuing success.
And pipeline, as I've said before, is robust.
As I mentioned in my prepared remarks, our spending in R&D is up, which goes to our commitment, and I would tell you that there is a well-developed plan for products over a multi-year period that we feel very good about.
I don't know if you want to add anything, <UNK>, to that.
I think I would just add that, as our customers and a lot of investors saw it at Las Vegas in the bedding show, we feel like we brought a tremendous amount of innovation this year to the Stearns & Foster collection as well as the Tempur brand.
Stearns, we have the new Nano coils.
We've got the Precision Edge all the way around.
We totally reinvented our proprietary Intellicoil.
In the Reserve collection, we've just created a tremendous ultra-premium halo collection there, which will help mix up pricing.
So the Stearns & Foster collection, Dan, is well improved.
That's an area, as we said on the last call, was a focus area because our product margins and our merchandising mix, really specifically merchandising mix, has been a challenge and that's at the high end on our Sealy brand portfolio.
Then on the Tempur side, the new Breeze, as <UNK> mentioned in detail in his prepared remarks, it is a significant advancement in cooling.
We estimated twice as cooling as the prior collection and the aesthetics are great.
We've increased the profiles.
Importantly, we've introduced a Breeze for the Flex collection, our Hybrid, which has been so successful this year, so we think we've brought a tremendous of amount of innovation this year.
We can't wait to get it out on to the showroom floors.
Not really any more than I already have, which they are designed to drive higher ASP and be margin accretive.
I would say, like I said in the prepared remarks, we are offering a limited assortment of exclusives.
Thank you, operator.
To the 7,000 employees worldwide, thank you for what you do every day to make the Company successful.
To our retail partners, thank you for your outstanding representation of our brands.
To our shareholders and lenders, thank you for your confidence in Tempur Sealy's Leadership Team and the Board of Directors.
