Good day, everyone, and welcome to the Tempur Sealy Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. You may register to ask a question over the phone at any time by pressing the star and 1 on your telephone keypad. Please note today's call will be recorded, and we will be standing by if you should need any assistance. It is now my pleasure to turn today's conference over to Aubrey Moore with Investor Relations. Please go ahead. Thank you, Operator. Good morning, everyone, and thank you for participating in today's call. Joining me today are Scott Thompson, Chairman, President, and CEO, and Bhaskar Rao, Executive Vice President and Chief Financial Officer. This call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve uncertainties, and actual results may differ materially due to a variety of factors that could adversely affect the company's business. These factors are discussed in the company's SEC filings, including its annual reports on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statement speaks only as of the date it is made. The company undertakes no obligation to update any forward-looking statements. This morning's commentary will also include non-GAAP financial information. Reconciliations of this non-GAAP financial information can be found in the accompanying press release, which is posted on the company's Investor website at investors.tempursealy.com and filed with the SEC. Our comments will supplement the detailed information provided in the press release. And now, with that introduction, I will turn the call over to Scott. Thank you, Aubrey. Good morning, and thank you for joining us on our third quarter 2024 earnings call. I'll begin with some highlights from the quarter and then turn the call over to Bhaskar to review the financial performance in more detail. After that, I'll provide some comments on our proposed acquisition of Mattress Firm and then open up the call for Q&A. In the third quarter, net sales grew 2% to $1.3 billion, and adjusted EBITDA grew a solid 6% to $275 million compared to the same period last year. Our GAAP EPS grew 14% to $0.73 per share, and our adjusted EPS grew 7% to $0.82 per share compared to the same period last year. The overall bedding industry remains significantly below historical volumes. However, we are pleased with Tempur Sealy's results in the third quarter, with an outstanding international performance and a solid domestic result. Our Adjusted EBITDA to net debt leverage ratio declined to 2.4 times, which is below our midpoint of our targeted range of 2-3 times. As we reported previously, we are preparing our financial position for the planned closing of the Mattress Firm transaction. Cash generation in the quarter was very strong despite the soft market, and we delivered $240 million in free cash flow. Our strongest quarter of free cash flow was the third quarter of 2021. Turning to the third quarter highlights. Our first highlight is our Adjusted EBITDA margin of 21.1% in the third quarter, which is the strongest margin in 10 quarters driven by our consolidated growth coupled with our operating efficiency initiatives and diverse business platform. We continue to invest in brand through advertising and best-in-class service levels while also remaining agile and responsive to industry conditions. We expect to see significant upside once the market normalizes, which we estimate to be in 2025 and to be led by the new Sealy Posturepedic product launch, which I'll discuss in a minute. Turning to our second highlight. Our U.S. business continues to perform well compared to the broader market, driven by the continued success of our newly launched products and recent distribution events. We recently completed the full refresh of our Tempur-Pedic brand, starting with the new generation of Breeze products and smart bases launched in 2023, followed by the 2024 rollout of our updated Adapt collection and ActiveBreeze halo product. These newest generation products feature a broad range of innovative solutions, such as industry-leading cooling technology, advanced pressure relief, and AI-driven sleep insights to help consumers overcome common barriers to quality sleep. Our ongoing commitment to and investment in consumer-centric innovation is clearly delivering returns as we see a growing trend in consumers attaching a Smart Base to their mattress purchases, which is driving an increase in average transaction value for both our retail partners and our direct-to-consumer business. Additionally, our Sleeptracker-AI app continues to enhance our product value by offering users real-time personalized coaching to help them achieve better sleep. We are particularly pleased to report the app downloads reached a record level in both August and September, demonstrating strong consumer engagement and interest in our innovative solutions. These results prove that our products are resonating with premium, health, and wellness-focused customers. Stearns & Foster was our strongest-performing brand in the quarter and delivered solid growth through both wholesale and direct-to-consumer channels, driven by last year's new product launch, our rapidly expanding e-commerce platform, and our ongoing investments in advertising. Our value products also performed relatively well in a challenging demand environment, aided by recent distribution wins in two large U.S. bedding retailers. Turning to our third highlight. We're excited to share that we'll be launching our all-new collection of U.S. Sealy Posturepedic products for top of 2025. This is a significant reimagining of the Posturepedic product branding and marketing as we work to ignite growth in the U.S. bedding market, where Sealy is the largest brand. This new product line is targeted at the mid-to-entry-level market where industry volumes have been weak the last few years. This updated Sealy Posturepedic collection of mattresses is a result of a multi-year R&D cycle and will feature new proprietary coil technology. These patent-pending Precision-Fit Coils were designed in-house by our engineers to provide superior support, which has been the common thread of Posturepedic collection since its inception in 1950. We've also simplified merchandising, provided clearer value proposition, and a more compelling step-up story. The update will feature a new look thoughtfully designed to offer a fresh style while staying connected to the Sealy brand legacy. The launch will be supported with a national advertising campaign beginning Memorial Day 2025. The advertising is designed to reinforce the Sealy Posturepedic difference. This top-of-the-funnel multimedia campaign will be a national advertising effort to drive excitement for the company's largest brand. Our messaging will be amplified by an all-new Sealy Posturepedic in-store experience, and we plan to elevate Sealy's brick-and-mortar presence with updated in-store material and training. We're continuing to make high-return investments in brand and product to drive our and our third-party retailers' success. Shifting to international for our fourth highlight. Both our legacy international business and our Dreams operations performed very well in the third quarter, driving healthy double-digit growth in international sales and 200 basis points of expansion in international operating margins, representing significant momentum relative to the overall subdued international market. Our newly launched international Tempur collection of mattresses, bed bases, and pillows continues to drive growth and market outperformance across key markets like the U.K., Germany, China, and Australia. Notably, since the collection launched last year, we expanded our wholesale distribution by more than 10% and see continued opportunities to broaden distribution over the long term. We're supporting our new international products with strategic investments in advertising. Our continued investments throughout the funnel ensure that we drive both brand awareness and conversion, feeding the market for sustainable long-term growth. Our final highlight for the quarter. Our U.S. Tempur-Pedic brand was recently awarded number one in customer satisfaction in both the in-store retail mattress and the online mattress segments of J.D. Power's 2024 mattress satisfaction report. We're honored to achieve this distinction for the last five out of six years for the retail category and for the fourth consecutive year in the online category. With these recognitions, Tempur-Pedic has been named the most awarded brand in the history of the J.D. Power U.S. mattress satisfaction study. This recognition is a testament to our consumer-centric innovation and our unwavering commitment to product quality and service, and with that, I'll turn the call over to Bhaskar. Thank you, Scott. In the third quarter of 2024, consolidated sales were $1.3 billion, and adjusted earnings per share was $0.82. There are approximately $22 million of pro forma adjustments in the quarter, all of which are consistent with the terms of our senior credit facility. These adjustments are primarily related to costs incurred in connection with our planned acquisition of Mattress Firm and manufacturing footprint optimization initiatives. The manufacturing optimization involves the closing of two small facilities as we transferred their volume into our full-service manufacturing plant. This shift will allow us to lower our future costs per manufactured unit while continuing to make product to our industry-leading quality standards. Turning to North America results. Net sales through both our wholesale and direct channel declined approximately 1% in the third quarter. North American adjusted gross margin declined 10 basis points to 43.1%, driven by the mixed impact of the new distribution win for our OEM business, partially offset by commodity costs and operational efficiencies. North American adjusted operating margin declined 20 basis points to 20.1%, driven by the decline in gross margin and operating expense deleverage. Now turning to international results. International net sales grew a robust 12% on a reported basis and 11% on a constant currency basis. As compared to the same period last year, our international gross margin improved 70 basis points to 57.3%, driven by operational efficiencies. Our international adjusted operating margin improved 200 basis points to 18.2%, driven by operating expense leverage and the improvement in gross margin, partially offset by the Asia joint venture performance. We're pleased to share that our Asian joint venture recently opened our first manufacturing plant in India. Although not expected to be material to our operations in the near term, it is further evidence of the long-term vision and willingness to invest in the future. Now moving to the balance sheet and cash flow items. At the end of the third quarter, consolidated debt less cash was $2.2 billion, and as Scott mentioned, our leverage ratio under our credit facility was 2.4 times, within our historical target range of 2-3 times. As previously announced, we have executed a $1.6 billion Term Loan B. We are now positioned to fully fund the Mattress Firm acquisition at close. Now turning to 2024 guidance. We have narrowed our Adjusted EPS outlook to be between $2.45 and $2.55. At the midpoint of the range, this represents a 4% growth year- over- year, a notable expansion of profitability in a prolonged challenging market. Our guidance at the midpoint is based on the full year sales that are slightly below the prior year, which implies the fourth quarter will be approximately consistent to the prior year. This also considers our current expectation that the 2024 U.S. bedding industry unit volumes will be down high single digits, which implies the industry will be down approximately mid-single digits on dollars in the fourth quarter, consistent with what we saw in the third quarter. This represents more than a 30% decline from peak mattress unit demand in 2021. Our sales outperforming the global industry due to recent distribution wins and the continued success of new product launches, with advertising spend approaching $465 million as we support our leading brands and new products, resulting in adjusted EBITDA of approximately $915 million at the midpoint of the range. Our guidance also considers the following allocations of capital in 2024: CapEx of approximately $125 million, down significantly from prior years as our major capital projects are complete. This level of spend is primarily driven by maintenance CapEx of $110 million and a quarterly dividend of $0.13, an increase of 18% over prior year. Lastly, I would like to flag a few modeling items. For the full year 2024, we expect D&A of approximately $200 million-$205 million, interest expense of approximately $125 million-$130 million, on a tax rate of 24%, with a diluted share count of 179 million shares. With that, I'll turn the call back to Scott. Nice job, Bhaskar. I'd like to take a moment to share some updates related to our Mattress Firm acquisition. First, the federal court hearing is scheduled to begin next Tuesday, November 12, 2024, and expected to last about two weeks. We continue to believe a successful litigation process can be completed in the coming months, allowing for a potential transaction close in late 2024 or early 2025, in line with our previous expectations. As previously announced, as part of our engagement with the FTC on the proposed acquisition of Mattress Firm, we conducted a divestiture process, which led to an agreement with Mattress Warehouse, a company with extensive mattress retail experience, a strong capital base, and a capable leadership team. The executed purchase agreement provides for the contingent sale of 73 Mattress Firm retail locations and our Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers. We expect the divestiture to close approximately one quarter after the closing of the Mattress Firm transaction. Turning to our recently filed complaint seeking an injunction against the FTC Commission's administrative proceeding, the actions ask the court to prevent the FTC from challenging the Mattress Firm merger through its own separate administrative proceeding, in addition to the federal court proceeding that starts next week, effectively giving the FTC two shots at us by using two different courts. This is an issue of jurisdiction and constitutional law. As the litigation process is ongoing, our comments are limited, and we cannot take questions on pending litigation. Finally, moving to brief comments on Mattress Firm's financial performance, Mattress Firm recently made their quarterly results available on their website, and they were consistent with our expectations. We believe they are weathering a difficult U.S. market well, and we encourage you to review Mattress Firm's website for more information on their financial performance in the most recent quarter. Before opening up the call for questions, I'd like to take a minute and reflect on the evolution of Tempur Sealy. Over the last 175 years, we have dedicated our efforts and expertise to continuous innovation for the benefit of customers. We have grown to become a leading global bedding company with highly recognized brands, advanced manufacturing capabilities, and a diverse omnichannel platform. Our ongoing investments to strengthen and diversify our business have resulted in nearly 60% expansion in sales since 2019 and an 80% expansion in Adjusted EBITDA over the same period. While we've made significant strides to grow and fortify the business, we believe that significant opportunities lie ahead. Our continued focus on key growth and cost efficiency initiatives ensures success in a fragmented and evolving marketplace, and that we are also optimally positioned to capitalize on a resurgence in demand when the global industry returns to growth. And with that, I'll open the call up for questions, Operator. Absolutely. At this time, if you'd like to ask a question, please press the star and one keys on your telephone keypad. Keep in mind you may remove yourself from the question queue by pressing star and two. Again, it's star and one to ask a question today. And we'll take our first question from Susan Maklari with Goldman Sachs. Please go ahead. Your line is open. Thank you. Good morning, everyone. Good morning, Susan. My question is, good morning, Scott. I want to talk a little bit about demand, and as we have gotten past the election, we think about the potential for the Fed cutting rates. Can you talk a bit about how you think the consumer may react? Thoughts on how we could see demand trending as we get late this year and early next year, and then your ability to respond to that with the utilization rates that you've got across the business and some of the new product introductions that you talked to? Sure. Thank you for your question, Susan. As you know, look, the bedding industry has really been in recession, maybe even depression. It's been a tough three years. And probably from peak to where we are now, probably down 30%, which is, by historical standards, a period we've never seen before. So we do think we're set for recovery or normalization. I think we think it'll be led by Sealy Posturepedic, which is the largest launch in Sealy's history and probably the largest bedding launch in history. And as you know, Sealy is the number one brand in the U.S. If you look at kind of the consumer, to be frankly honest, we've gotten through the election, and we've gotten through the election very well. We've got peaceful transition of government, maybe a little more stability. Certainly, retailers may be more confident to advertise. We're going to have lower rates, maybe not quite as low as we expected six months ago, but clearly the trend's in the right way. And as you know, better than most of us, we're going to have some better housing formation. So all in all, it looks like we should get to some normalization sometime, I'll call it in 2025. And we think we're perfectly positioned to take advantage of it. As you know, we've taken market share for probably more quarters than I can remember. I don't see any reason why we won't continue to take market share. And in fact, I probably, based on the numbers I see right now, I think we made a step forward as far as our market share capture in the third quarter as compared to probably the first two quarters of the year. We've got the capacity to address the market as it expands. Let me do one other little quick call out because that was all really kind of more U.S. is I think one of the real highlights in the quarter is the international team, both what we call legacy and then Dreams. Both of them had just a fabulous performance, double-digit growth, and what is also a very difficult market globally. They took a good bit of share in their relative markets. That feels like that's sustainable. It's taken a while to get international rolling, but we think we've got it in a really good place going forward. Okay. That's very helpful, caller. Thank you. Good luck with everything. Thank you. We'll take our next question from Bobby Griffin with Raymond James. Please go ahead. Your line is open. Good morning, everybody. Thanks for taking the questions. And Scott, I appreciate the details there on the pending acquisition. Thank you. I guess so for my question, Bhaskar. I think it's probably more centered on the numbers towards you. But can we talk a little bit about the contribution margin of the business today? There's been a lot of changes. You called out manufacturing optimization, new distribution, some growth in the OEM, and then obviously, so far, a very successful launch internationally. So can you maybe just unpack kind of what your view is on international and North America's go forward contribution margin? And is there anything in 2024 results that we should be mindful of when we think about kind of level setting our model on that going forward, either good guys or bad guys against the P&L? Absolutely. Let me start with the latter one first. As I think about from a go forward standpoint, let's just assume status quo, which is the existing new distribution that continues in the mix of the brands. Those continue as well as international perform. So there isn't any transitory items that I would specifically call out one-time good guys or one-time bad guys. We're confident or we're proud of the performance that the business has produced in the third quarter. As it relates to the contribution profit from a go forward standpoint, how I would think about it is, again, assuming status quo, and I'll define what I mean by that. International business is doing extremely well. That new addressable market that we've been going after for a number of years, we've seen the green shoots. Now we're seeing the grass grow. And internationally, we're growing low double digits. As you know, historically, the contribution profit on that side of the pond is a little bit richer than the U.S., just given the price point they historically play at. So when I think about the fleet being about 35% from a contribution standpoint, the international should come in a bit higher than that. As I think about from a U.S. standpoint, North America is, let's think about it as, again, assuming that status quo is, as I think about it, in and around fleet, let's call it 30%-35% from an incremental dollar standpoint. Now, the item to come back to is that we do believe that low-end consumer that's been sitting on their hands, they are going to come back. As Scott pointed out, we've got an exciting new product launch coming in next year, right at that value consumer. As that mixes in, it will be incremental EBITDA dollars. However, it would be something to be mindful of as that mixes in from a contribution standpoint. Yeah. So you basically have a product mix issue that you have to keep an eye on. But as Bhaskar pointed out, incremental EBITDA into the meat of the market. But as we looked in the third quarter, as I mentioned in the prepared remarks, I mean, Tempur grew, and actually, Stearns & Foster was the best-performing brand. So clearly, the weakness has been in that lower price point. We'll take our next question from Rafe Jadrosich with Bank of America. Please go ahead. Your line is open. Hi. Good morning. It's Rafe. Thanks for taking my questions. Good morning. I was just heading into sort of 2025. I was wondering if you could just sort of give a state of the industry. We've had, as you mentioned, three years of declines. Mattress industry depressed, 30% below peak. But we're also, if you're looking at some of the housing indicators, existing home sales haven't turned yet. Still feels like it's under pressure. Just sort of where do you think we are kind of broadly in the market heading into 2025? Sure. First of all, let me just talk a little bit about the housing market. We've never really thought the housing market was the primary driver for bedding. We've always described it as a slight headwind or a slight tailwind, and it's been a slight headwind, obviously, for a little while. So we expect it to be maybe a slight tailwind. Really, we think more of advertising, innovation, consumer confidence as the bigger drivers, and look, I think if you think about all the stuff that went on, we'll call it third quarter and into the fourth quarter, particularly in the United States, the U.S. consumer has held up very well. So if we can get to some more normal, we'll call it politics, a little more normal housing. When I look at the bedding industry specifically, the product innovation is very strong. And of course, I'm talking my own book of business, but from an industry standpoint, I would tell you that products that all our competitors are making are also innovative. So the products are really good. Everybody's been very conservative on their advertising. And as I've talked about on previous calls, probably think we ought to spend more money on the top of the funnel, driving customers into stores and thinking about betting and less on the bottom of the funnel, chasing the last three customers with search ads. But it looks like it's set up pretty well. And we're not going to do 2025 guidance today, but clearly, there's some green shoots out there. And as Bhaskar talked about a second ago, international is really, really doing well. Again, as I mentioned also a little while ago, this Posturepedic launch, I mean, it is, I mean, it is the entire Sealy Posturepedic brand. It is the reimagining of the brand. For the first time in, I don't know, a decade plus, we're going to put national advertising behind it. It is in the meat of the market that has had problems. And we think we've got something here as far as something that will help turn the industry back to normalization, which is, call it a 5% or 6% growth rate. And maybe you don't get that in 2025, but you get on the path to getting back to, I'll call it a normal industry. When you look at, gee, the population growth and everything else, the number of units we're selling today is extremely low. I'm not a big person on believing in pent-up demand, but you can't stay at these levels based on any stat that you would look at, beds sold per person in the country or anything else. When I look at it, we've been in this decline. Not only is it deep, we've been in it for a long time. We're looking forward to getting back to a normal market. Just leveraging off, Scott, one of your comments about volumes and what the industry is doing is, as this does come back, and as Scott mentioned, we're not doing 2025, is the leverage component is going to be extremely powerful from a business standpoint as that goes through its gross margin. So when you think about the mix that I talked about previously, as well as the leverage that will go through those plants combined with the productivity initiatives that we continue to drive margin expansion in the third quarter, we think all of those items have legs that will be very constructive as it relates to EBITDA margins and profitability. We will take our next question from Michael Lasser with UBS. Please go ahead. Your line is open. Good morning. Thank you so much for taking my question. It's a two-parter. First, how does the North American gross margin performance in the third quarter inform how we should think about the gross margin into next year, given the makeover to the Sealy products? And two, how does the prospect of tariffs impact the outlook for Tempur Sealy into 2025 and beyond? Thank you so much. Great questions. I'll take the easy one and then give Bhaskar the hard one. And the easy one is the last part of the question. We don't think the tariffs impact us much. We don't really buy anything from China directly anymore. So any additional tariffs on China really don't impact us. As far as overseas, about the only thing we import are adjustable bases. They come in through Mexico and Vietnam. Maybe there's a little nick there if there's some tariffs related to those countries. The history of the industry is we've passed those tariffs on. You could instead put some tariffs in. Maybe it helps a little bit, but that'd be on the low-end bedding. And I wouldn't expect it to be material, really one way or the other, is the way we think about, we'll call it the new tariff environment. And then you get the complex question about the mix into gross margin. Pretty straightforward. So when I think about North America three-Q margins and how it informs the outlook is, again, we saw on a consolidated basis, we saw nice gross margin expansion. We did see productivity driving gross margin expansion in the quarter offset by mix. As you get into the fourth quarter and beyond, that mix will start lapping itself a little bit in the fourth quarter, and it'll start being grandfathered as we get more into 2025. So as a headwind, I wouldn't think about that on a go forward standpoint. Again, incremental EBITDA, but it is something to think about as it relates to margins. However, when I do think about the productivity, we feel good about what we've accomplished so far. And we do feel like that has legs from a go forward standpoint. And then overall, as Tempur continues. We have a new product launch in Tempur, as relative to the fleet that will be constructive in Stearns & Foster. As Scott pointed out, it was the leading growth driver of the overall business, which will be constructive to the fleet. So when I think about tailwinds to the North American margins, there's nice tailwinds. Again, the item to be mindful of is, as this low-end consumer comes back, that will mix in incremental EBITDA, but it is something to be mindful of from a rate standpoint. We'll take our next question from Peter Keith with Piper Sandler. Please go ahead. Your line is open. Hey, good morning, guys. I'm going to speak in a two-parter here, but just on the advertising spend, we know the importance. It seems like you pulled back on ad spend in Q3 because you saw nice sales and marketing leverage. Could you talk about kind of the ad strategy going from Q3 into Q4? And then on a related basis, just maybe the domestic versus international sales dynamics implied for Q4. Do you think international is going to slow from the strong growth? Does domestic get a little worse? How should we think about those two? Yeah. Let me see if I can get it. It's about a five-point question, but I think you'll tell me, Bhaskar, if I missed any of them. First of all, from an advertising spend, that naturally flexes up and down based on what's going on in the market. If you're talking about the DTC spend, it literally changes daily, depending on its performance marketing. Just in general, we were relatively conservative in the fourth quarter, considering the election and the noise around the election. So I would say we've been a little conservative, but we've pretty much spent the same percentage of sales. So I would say it's consistent. I would expect we'll be a little more aggressive next year with the advertising. As far as momentum internationally, we would expect them to continue to have significant momentum. We don't think this is a one-quarter thing. Whether it's double digits or high singles, I don't know. But in what is a market that's clearly down, I expect the international group to continue to have very good performance, both in total numbers, but relatively speaking, outstanding performance. What else was in that question, Bhaskar? I think that's fair. Just to cover that, let's call it about 9.2%, 9.3% advertising versus so consistent on a prior year basis. I think specifically you had a question about growth rates. Yeah. I'll say one other thing in advertising, which may be noteworthy. As other people have pulled back in advertising, quite frankly, we found our advertising to be much more effective because it's not quite as noisy out there. So that's been a good guide too from an effectiveness standpoint. So as Scott mentioned, consistent on a rate basis and in total dollars, about $119 million in the third quarter for total advertising. As I think about profiling in the fourth quarter, what we've assumed, and we read it into the prepared material, the U.S. industry is kind of chugging along where it is, call it down mid-single digits from a dollar standpoint. We've assumed that same in the fourth quarter. So when you think about sales from this side of the pond or the other, consistent profile, as Scott said, whether it's high, high single, low double internationally. And from a North America standpoint, let's call it consistent, perhaps slightly down a little bit. So similar profiling. We'll take our next question from Seth Basham with Wedbush Securities. Please go ahead. Your line is open. Thanks a lot, and good morning. My question is regarding the third quarter. Can you just give us some color on the shape of sales through the quarter, how Labor Day performed, and your promotional strategy during and after Labor Day? How did that shake out, and what did the competition do to react? Thanks. Sure. Consistent with what we've seen in previous quarters, the trough is deeper and the peak is higher. So in holiday periods, we would have actual growth, a good bit of growth. And in the troughs, we would be negative. And then you blend it all together. And that's the trend we've seen for, I don't know, four or five quarters post-pandemic. So that's kind of the shape. I don't think our promotional activity was significantly different year over year. Bhaskar, do you? That's correct. I fine-tuned it here and there. We did work a little bit on it to match some promotions that some others were doing that we talked about last quarter. That was what I called nickel and dime kind of stuff. I would say more recently, I would say the promotional environment in general has gotten less in the marketplace as it looks like others are being a little less promotional and trying to squeeze out some dollars to advertise, which I would consider to be a net positive for them and the industry. We will take our next question from Brad Thomas with KeyBanc Capital Markets. Please go ahead. Your line is open. Thanks for taking my question. Scott, you talked a bunch about your industry outlook. We get a lot of questions about how the luxury part of the market is performing. Could you talk a bit more about that and how you think about the luxury in terms of how much it's declined from peak and how you think about it going forward specifically? Thanks. Yeah. Luxury's holding up well at Tempur Sealy. As I mentioned in the prepared remarks, actually, Stearns & Foster was the best-performing brand. And then Tempur after that, and both those brands had growth in the third quarter. And for talking terms, and no one's numbers are perfect when you're talking about the industry, and I'm talking U.S. I would guess the U.S. industry was probably down maybe 9%-10% in sales. And like I said, both those brands were in growth. I've seen other reports of some other public companies that they were down significantly. So it's hard for me to make a general call on the high-end customer. But from what we're seeing on our products, the high-end is holding up very well. We'll take our next question from Judy Merrick with Truist. Please go ahead. Your line is open. Thank you. This is Judy on for Keith Hughes. I was wondering if you could give us a sense of how much the new Sealy Posturepedic launch would be a drag on earnings in the first half of next year, either from the advertising talked about or the tailwind? Yeah. It's a great question. From a year-over-year standpoint, there really won't be any incremental launch cost when you compare the Sealy Posturepedic launch in 2025 to what we did in 2024. So there won't be any incremental launch cost. When you go to advertising, advertising would be an incremental cost, but we expect to be able to self-fund it through cost reduction initiatives that we're working through. So the way we're thinking about that incremental advertising is it will not be an incremental expense as we offset with other cost reductions. We'll take our next question from Laura Champine with Loop Capital. Please go ahead. Your line is open. Thanks for taking my question. And I thought the international growth was impressive, and I hear you, Scott, that you view that as sustainable. Can you put a little more meat on those bones and tell us why growth in international markets should be that sustainable and a pretty tough macro there too? Yeah. And I know you follow us closely. If you remember, we worked on new products at Tempur for four years before we launched this new Tempur product. And it was expensive. It was painful. It took us a long time. But we finally got it where we needed to. So the first big driver is the new Tempur product. We got the product right, and the market has been receptive. And we backed it up with new creative advertising. So all of that would be execution in a very difficult market. On the Tempur side, we've also had a strategy to bring the Tempur product a little closer to, we'll call it the high end of the market, but not the super premium. Bring it down just a little bit. And we're working through that. And as I mentioned in the prepared remarks, we've had some expansion in distribution. I don't think we're through from that standpoint. If you go to the Dreams side of the ledger, the Dreams team has executed very well in the U.K., taking a significant share and being very crisp from an execution standpoint. The U.K. economy, although not robust, it at least has stabilized, and it feels like it's beginning to perk up a little bit as if they cut interest rates and stuff. It's product on the Tempur side, and it's execution on both the Dreams side and the Tempur side. We'll take our last question today from Bobby Griffin with Raymond James. Please go ahead. Your line is open. Hey, guys. Thanks for letting me back in real quick. Scott, I just want to actually dive in a little bit more on Stearns & Foster. You called it out strongest brand during the quarter. I think that's a reversal on maybe some of the prior trends in the past couple of quarters. So can you maybe just unpack that a little? Did you push a little bit more in advertising? Anything to help us understand the turnaround there? Because that's pretty encouraging given the opportunity on Stearns over a multi-year basis. Yeah. I don't have all the numbers in front of me, Bobby, but my perception is Stearns was really hot for a little while. Last couple of quarters, it's done okay, but it certainly had cooled down a little bit. I think it was still in growth. And then in the third quarter, had a very strong third quarter. I think that I'd give credit, first of all, to the sales group because we noticed that it slowed down a little bit, and the sales group made it a focus. We also had one SKU, one or two SKUs or two or one? I think. One or two. One or two SKUs in Stearns that weren't as productive as we would have liked them to have been, and we tweaked them and brought in new SKUs to replace them and got those floored where we had a couple of underperforming SKUs, and with that, it had a very strong quarter, so no additional promotions to speak of, no additional advertising. In fact, I think advertising was a little bit down on Stearns, actually. There are no further questions on the line at this time. I'll return the call to Scott for any additional or closing remarks. Thank you, Operator. To our 12,000 employees around the world, 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 the company's leadership and its board of directors. This ends the call today, Operator. Thank you very much. Thank you. Thank you, everyone, for your participation today. You may now disconnect.