As a reminder, this conference is being recorded. I would now like to hand the floor over to Aubrey Moore, Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and thank you for participating in today's call. Joining me in Lexington headquarters are Scott Thompson, Chairman, President and CEO and Bhaskar Rao, Executive Vice President and Chief Financial Officer. After prepared remarks, we will open the call for Q and A. Forward looking statements that we make during call are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that these forward looking statements, including the company's expectations regarding sales, earnings, net income and adjusted EBITDA and anticipated performance for 2017 and subsequent periods involve uncertainties. Actual results may differ due to the variety of factors that could adversely affect the company's business. The factors that could cause actual results to differ materially from those identified include economic, regulatory, competitive, operating and other factors discussed in the press release issued today. These factors are also discussed in the company's SEC filings, including, but not limited to, annual reports on Form 10 ks and the company's quarterly reports on 10 Q under the headings Special Note Regarding Forward Looking Statements and or Risk Factors. Any forward looking statement speaks only as of the date on which it is made.
The company undertakes no obligation to update any forward looking statements. This morning's commentary will include non GAAP financial measures. The press release contains reconciliation of these non GAAP financial measures to the most directly comparable GAAP measures, except as otherwise discussed in the press release, as well as information regarding the methodology used in our constant currency presentations. We have posted the press release on the company's investor website at investor. Tempersili.com and have filed it with the SEC.
Our comments will supplement the detailed information provided in the press release. And now with that introduction, it's my pleasure to turn the call over to Scott.
Thank you, Aubrey. Good morning, and thank you for joining us on our 2017 Q3 earnings call. Before I begin, I want to formally congratulate Bhaskar on his recent appointment as the company's EVP and Chief Financial Officer. Over Bhaskar's 13 years at Tempur Sealy, he has earned a great deal of respect within the organization, and he will certainly be an asset as our CFO. I'll begin this morning by providing some overall color on the quarter's operating performance, including highlighting a few key items in the quarter.
Then I'll have Bhaskar review our quarterly financial performance with you in detail. Finally, I'll conclude with our prepared remarks by updating you on our long term corporate objectives, and then we'll take some questions. We are now 7 months into our transformation of our distribution model. As I'm sure you recall, in April, we terminated our relationship with our largest customer, Mattress Firm, who previously represented over 20% of our worldwide sales. We knew it would be a challenge to offset the loss of earnings associated with these sales.
However, we believe that over time, we would recapture the lost earnings because of the strength of our industry leading brands, our commitment and skill of our loyal retail partners and because of our own direct sales efforts. It's still very early, but we are encouraged by our initial progress. From where we sit today, we are confident that we will not only fully recover our lost earnings, but we will transform Tempur Sealy into a stronger, healthier and more profitable company with a diversified customer base built on a balanced omnichannel distribution model. Turning to the Q3. I'm proud of the team's effort during a challenging quarter that not only included the loss of $172,000,000 of mattress room sales, but also included the impact in North America of 3 large hurricanes and the deteriorating performance of a large national retail customer.
Despite these challenges, Tempur Pedic sales performed in line with our expectations in North America, growing 26%, excluding Mattress Firm. While Sealy North American sales were below our expectations, This was largely due to underperformance by this one department store. Excluding Mattress Firm and this one department store, Sealy sales in North America grew 7%. Turning to profitability. Our margins held up pretty well despite the volume deleverage and the relatively soft sale environment.
Our adjusted North American gross margin declined 30 basis points. And in fact, our Tempur Pedic North American gross margin actually increased versus the prior year, even after absorbing headwinds from fixed cost deleverage and commodities. Although our adjusted North American margin declined 100 basis points, as we invested in marketing and experienced some fixed cost deleverage, we are pleased with the North American margin performance. Our strong margins were driven by 3 key areas: improvements in manufacturing, logistics and worldwide overhead. These have been a key area of focus over the past year and a half number 2, a shift in mix away from low profit accounts and products and 3, growth in our direct to consumer business.
Our margin performance allowed us to offset a good portion of the sales decline in the quarter. While our total sales declined $108,000,000 adjusted EBITDA declined $26,000,000 dollars which is a significant improvement from the $39,000,000 adjusted EBITDA decline in the 2nd quarter. Our cash generation for the quarter was outstanding, allowing us to pay down $112,000,000 in debt in the quarter, resulting in our leverage ratios declining to 3.7x, which is only slightly above our long term target of 3.5x. We expect to continue to pay down debt over the next few quarters, and then we expect to be in a position to consider other alternatives and allocations of capital, including possibly resuming our shareholder repurchase program. Now I'd like to touch on our initial progress with North American sales recapture, talk about our sales initiatives we're putting in place to recapture sales over time and provide a couple of highlights from our international results.
In North America, we recaptured approximately onethree of our forfeited mattress sales. This recapture figure would have been higher were it not for the impact of the hurricane and the deteriorating performance of 1 large customer. Nevertheless, we are encouraged by our initial performance, particularly because we are in the early stages of implementing our recapture strategy. Recapture thus far is driven entirely by the strength of our brands as our existing retail partners lean into our products and take share in the marketplace. While some retailers have leaned into our products already, others are constrained by their existing slotting agreements, which prevent them from materially modifying their retail floor plans.
As these agreements begin to expire, we expect to see increased representation from these retailers, primarily benefiting our Sealy and Stearns and Foster brands. Our recapture strategy hinges on the following four areas of growth: increased velocity of our products in our current customers increased balance of share with current customers increased presence in the form of new doors in markets that are currently underpenetrated following the forfeiture of Mattress Firm's 3,500 doors and lastly, win our fair share of direct to consumer business on the Internet. We expect to increase both the velocity of our new products and the balance of share at our current retail partners by continuously innovating, enhancing our product portfolio, while keeping our foot on the pedal with aggressive marketing. We're already seeing the benefits of these efforts, but the real benefits will be evidenced starting in 2018 with a complete launch of a new Tempur Pedic lineup and continued expansion of our successful Sealy master brand products. We'll talk more about those later.
We also expect to grow by expanding our presence in Mattress Firm dominated markets through new store expansion. The vast majority of these new stores will be opened by our existing retail partners, many of whom are expanding their footprint with Tempur Sealy only or Tempur Sealy dominant stores. In addition, we expect some new stores to be opened by new entries into the retail marketplace, looking to capitalize on our strong brands. With 3,500 Mattress Firm stores no longer carrying 3 of the most important brands in the industry, Tempur Pedic, Sealy and Stearns and Foster, retailers are eager to seize the opportunity. In addition, we'll open some of our own Tempur Pedic retail stores.
While our preference in North America is to partner with our 3rd party retailers in certain underserved market, it makes sense for us to establish some stores in these locations. We expect our company owned stores will complement our existing third party retail partners, our exclusive high end showrooms and knowledgeable sleep consultants will educate consumers on our product, provide further awareness and generate future sales opportunities throughout the local market. In each of the 8 markets where we have opened our own Tempur Pedic stores, not only have our stores been successful, but they have also created a brand halo in those markets. Our own stores have a payback period of about 6 months. And while we expect the overall revenue contributions to be minimal, they have a high return on invested capital.
In fact, based on our historic experience, 1 company owned Tempur Pedic store generates the same contribution profit for us as approximately 20 mattress room stores. I should note, our North American Tempur Pedic same store sale increase for the quarter was a healthy 30%. To sum up our recapture strategy, by providing existing retailers with tools they need to win, by working with retailers to open new Tempur Sealy dominant stores, by opening some limited number of company owned stores and by capturing our fair share of the online bedding business, we feel good about our competitive position in the market and future sales growth in North America. Turning to our international business, sales increased a solid 8% as compared to the Q3 last year. This was driven by growth across all geographic areas with Europe market having the largest positive trend since the Q2 as new products have completed their rollout.
Our performance in Asia continues to be outstanding. As planned, incremental product launch costs for the quarter were a headwind to international margins, but we expect launches to provide a nice sales boost in the coming years. While I'm pleased with the recent progress our team has made internationally, they are continuing to explore opportunities to drive our brands worldwide and deal with ever changing international markets. In summary, we overcame some difficult external challenges this quarter and delivered a solid performance both financially and operationally. Lastly, before turning the call over to Bhaskar, I'd like to highlight the team's tremendous response to the unprecedented conditions we experienced in the quarter.
First, our top priority during these storms was to ensure the safety of our employees, and I believe the team did an outstanding job on that front. Fortunately, all of our employees across all of the impacted area were safe and accounted for immediately. And luckily, our facilities in Texas, Florida and Puerto Rico sustained very little damage. 2nd, we understood that rebuilding these communities will take a long time, and we wanted to do our part to help in this recovery process. So we stepped up our normal charitable contributions and, in partnership with our retailers, significantly increased charitable contributions to support recovery efforts in the affected areas.
As people begin to rebuild their lives, we hope these and other generous donations have provided some comfort during the tough recovery process. With that, I'll turn the call over to Bhaskar to walk us through the Q3 financial results.
Thank you, Scott. Before going into the details, a few key highlights from the Q3. Worldwide net sales for the Q3 were $725,000,000 a decline of $108,000,000 or 13% versus the prior year quarter. Adjusted gross margin declined 30 basis points to 43.2 percent. Adjusted operating margin was 13.8 percent of net sales and adjusted EBITDA was $129,000,000 Adjusted earnings per share for the quarter was $1 We generated $110,000,000 of free cash flow in the quarter, making this one of the strongest cash flow quarters in the company's history.
Our leverage ratio as calculated based on the senior credit facility was 3.7 times, which is slightly above our long term target of 3.5x. As Scott mentioned, we will continue to use excess cash to pay down debt, and we anticipate that we may resume our share repurchase program sometime in 2018. My comments going forward on net sales will be excluding Mattress Firm from the prior period. On a segment basis, sales in North America increased 10%, driven by growth across all of our brands. Tempur led the way with sales in North America growing a robust 26% compared to the Q3 last year.
Sealy sales increased low single digits, but excluding the impact of the previously mentioned department store, Sealy sales in North America increased high single digits. Sales in Canada were up a solid 10% and on a constant currency basis were up 6%. Our North American wholesale channel increased 7% and the direct channel increased 149% in the quarter, including an increase in web sales of over 200%. On a dollar basis, our wholesale channel was still the largest contributor to sales growth. The vast majority of this growth is with existing retailers leaning into our brands to capitalize on the competitive advantage of our premium products provide.
A couple of selected callouts on our North America sales trends. 1, we continue to see strong performance in select metropolitan areas where Bed in the Box focuses its efforts. Sales for Tempur Pedic in New York, Philadelphia, Phoenix were up over 50% once again this quarter. 2, additionally, a good portion of the growth in our direct business came from customers in Mattress Firm dominated markets, where our 3rd party retail footprint is currently under penetrated. North America gross margin decreased 30 basis points to 41.2% as compared to the prior year.
This was driven by fixed cost deleverage on lower unit volume, significant commodity cost inflation and unfavorable brand mix due to the loss of revenues that skew toward higher margin Tempur products. Those negative factors were mostly offset by operational improvements, favorable channel mix and positive merchandising mix. Tempur gross margins were up significantly versus the Q3 last year. The leverage on lower unit volume was more than offset by positive mix and productivity improvements. We continue to see Sealy 4 wall margins improve and was up almost 200 basis points this quarter.
North America adjusted operating margins decreased 100 basis points to 17.4% as compared to the prior year. This was driven by the change in gross margin and unfavorable operating expense deleverage, including the impact of investments in marketing as we continue to drive sales recapture. Turning to our International segment. On a reported basis, net sales increased 8%. On a constant currency basis, sales were up 7%, with the wholesale channel up 8% and the direct channel up 4%.
International gross margin decreased 260 basis points to 51.2% compared to the Q3 of 2016. The gross margin decline was due to product launch cost and unfavorable channel and brand mix. The unfavorable brand mix was expected as Sealy is growing faster than Tempur on a relative basis. International adjusted operating margin decreased 160 basis points to 17.5%. This was primarily due to the decline in gross margin offset by operating expense leverage.
Before turning to our global performance, I would like to discuss a matter in one of our Latin During the quarter, we recorded an unexpected $12,000,000 of charges, primarily interest related to deferred payment programs on non income tax obligations and local market financing arrangements. These were very inefficient and we are in the process of unwinding them by recapitalizing the Latin American subsidiary. We do not expect these kind of charges in the future. Leadership of the subsidiary has been terminated. Now turning back to the company's global performance.
Adjusted operating income was $100,000,000 Adjusted EBITDA was $129,000,000 down $26,000,000 from last year. Adjusted EBITDA excludes 3 one time items. 1, dollars 2,500,000 of non income tax obligations in the Latin American subsidiary as previously discussed 2, $1,900,000 of bad debt expense associated with a long time European customer's bankruptcy. For further context, this customer represented 1% of international sales in 2016 and we believe this will not have a material impact to sales going forward. 3, dollars 1,100,000 of hurricane related manufacturing and logistical costs as well as a portion of our relief effort donations that we recognized in the quarter.
We had 3 Sealy assembly plants and multiple distribution centers impacted. I would also like to note that adjusted EBITDA does not include any add backs for lost sales related to the hurricane. To provide some perspective, the hurricanes impacted our operations in 2 of our largest markets, Texas and Florida, which represented about 12% of our North American sales last quarter and is where hundreds of store locations for our retail partners are located as well. While it's difficult to calculate a precise figure for these impacts, we estimate that the hurricanes impacted our sales in the quarter by approximately $10,000,000 to $15,000,000 and the flow through of these sales to EBITDA would be in the range of $3,000,000 to $5,000,000 Interest expense was $32,000,000 an increase of $12,000,000 from the Q3 last year, primarily due to the one time $9,000,000 of interest expense located in Latin America. Excluding the one time item related to Latin America, interest expense in the quarter was $23,000,000 Adjusted EPS for the quarter was $1 and excludes the items previously mentioned.
Today, we revised our adjusted EBITDA guidance range of $435,000,000 to $450,000,000 tightening up the range by raising the low end by $10,000,000 Commodity cost inflation continues to be a headwind to EBITDA and was about $12,000,000 in the 3rd quarter. We expect commodities to negative to be negatively impact us in the Q4 by approximately $10,000,000 and we continue headwinds to occur through the first half of next year. We have seen inflation across all categories, including chemical, steel, lumber and foam. Based on what we know today and although things are always changing, we'd expect commodities to be a headwind of approximately $30,000,000 in 2018. We will look at pricing opportunities for 2018 and we'll report back at our next earnings call.
Now moving to the balance sheet and cash flow items. We generated operating cash flow of $203,000,000 in the 1st 9 months of 2017 versus $110,000,000 in the same period last year. As a reminder, we put on deposit $92,000,000 for the Danish tax matter in the Q3 of last year. In the Q3, we generated a robust $110,000,000 of free cash flow and our year to date free cash flow is essentially flat versus the prior year after excluding last year's Danish tax payment. We consider this noteworthy given the significant events the team has faced this year.
Cash cycle improved 6 days compared to the Q3 of 2016. We expect continued improvements in our cash cycle as we transition away from Mattress Firm, which negatively impacted our working capital. In addition, as our direct business grows, this will also benefit our cash cycle because it is working capital light. We also expect our ROIC to continue to improve over time as a result of lower working capital required in our North American distribution model. At the end of the Q3, our net debt was $1,800,000,000 Before turning the call back over to Scott, I wanted to flag a few items for modeling purposes.
For the full year 2017, we expect adjusted D and A to be $105,000,000 CapEx of $60,000,000 to $70,000,000 adjusted interest expense of $90,000,000 adjusted tax rate of 32% and the share count to be 55,000,000 As a reminder, we are a full U. S. Taxpayer. So to the extent that corporate tax reform is passed later this year, we would expect our tax rate to come down. And now I'll turn the call back over to Scott.
Thank you, Bhaskar. Great job. Turning to our long term corporate initiatives. 1st initiative, develop the most innovative bedding products in all the markets we serve. As we are approaching the end of 2017, the team is aggressively working towards 2018.
We've not yet announced the details about the products that we'll be launching, but I can tell you that 2018 will be an exciting year for both Sealy and for Tempur Pedic in North America. Within Sealy, we'll be completing the master brand line by launching a new hybrid line, which will bring together the best of both innerspring and foam materials with a striking look and feel. The big news of the year will be the replacement of the entire North American Tempur Pedic line starting in 2018. We're following the same winning strategy we implemented in our prior launches for Stearns and Foster 2016 and Sealy in 2017, investing heavily in the products with consumer desired innovation and support with new products with great service and compelling marketing. We'll be providing our Tempur Pedic retailers with a significant competitive product advantage, both in features and customer value.
This will be the first new formulation of Tempur Pedic material since 2010 and only the 4th in the history of the company. Feedback from some of our key retail partners who have experienced the product has been overwhelmingly positive. We're very excited to once again lead the way in offering life changing sleep to consumers. Our retail partners understand that providing customers with real value at a higher ASP is essential to growing their profitability. As one of the world's leading premier bedding manufacturers, we are uniquely positioned to help our retail partners achieve success.
The 2nd long term initiative is to invest significant marketing dollars to promote our worldwide brands. Direct advertising spend in North America was up again as a percentage of sales compared to the Q3 last year. In addition to a higher level of spend, we've also increased our allocation to digital media to more effectively engage with our consumer, and we have helped our retail partners improve their own digital marketing. We want to be where every consumer is digesting media. While our increase in advertising investment has been a headwind to our operating we believe this is the fuel to elevate our brands around the world and support our North American retailers through this critical time period.
The 3rd long term initiative is to expand North American margins while executing our sales growth strategy. Our long term focus on expense management is highlighted in the quarterly results as North American margins were stable as compared to this time last year, even as we worked through this transformational period. At the same time, as the premier brand leader, we are committed to energizing and growing market share with wholesale partners and through our direct channel. You should expect we will maintain our focus on margin and will simultaneously drive our sales recapture efforts. The last initiative is to optimize worldwide distribution to make sure our products are properly represented in all channels.
We continue to expect physical retail to be the dominant way customers will want to purchase our products, and our core distribution methodology will continue to be our partnerships with quality third party retailers. At the same time, we need to be where the customer wants to shop. So we must continue to drive our balanced omnichannel strategy, adapting to consumers' evolving shopping preferences. In closing, despite somewhat muted sales environment, we feel good about the quarter and our long term trajectory of the business. On quality, on time, with winning product is the winning formula.
Operator, will you please open the call up for questions?
Certainly. You. And our first questioner for today is from the line of William Reuter with Bank of America. Please go ahead, sir.
Hey, guys. I just wanted to start talking a little bit about how you're thinking about the additional input costs with regard to next year. You mentioned that you may have some conversations with retailers regarding price increases. Can you talk a little bit about what you're expecting to do there and how you'll deal with those costs?
Sure. Thank you for your question. Clearly, in the prepared remarks, we called out commodities as what the headwind in the Q3 and expected headwind in the Q4. And it's quite frankly, an expected headwind into 2018. As you know, historically, we've passed on the majority of those kind of costs to the customer.
We're continuing to look at that and we'll look at the market conditions and look at what we think the future commodity prices are going to be and make some decision in the Q4 and work with our retail partners during that period and maybe early Q1.
Okay. And then just as a follow-up, you mentioned that you will consider returning to some more shareholder friendly activities next year. Can you talk about how you guys will view that in light of your leverage target? I guess what we should be thinking about in terms of what we need to see before you guys will return to some of those activities?
Sure. First of all, we always like to be shareholder friendly. So we think we had some shareholder friendly activities this year also, but I understand what you're talking about. Look, we've been very clear from the beginning that our target was 3.5 from an EBITDA standpoint for debt. We got a little bit over that and we're working down and I think we're at 3.7 as we've reported.
We'll get back in line. Then we'll continue to do the strategy that we talked about originally, which is the business gets the first call on the capital. And if the business can't use the capital, then we'll distribute it back to the shareholders. Thank you for your questions.
Thank you.
Thank you. And our next question comes from the line of Bob Drbul with Guggenheim Securities.
Hi, good morning.
Good morning.
I was just wondering on the Internet business and the online business, where do you see that shaking out this year? I think for the industry And I guess as you look at your business, can you talk around what that is doing to pricing in both brands of your business?
Sure. There's quite a bit in that question. Let me kind of unpack it just a little bit. First of all, we obviously got a pretty robust business at temper.com. We see that business continuing to grow.
I should point out that on our online business, this quarter, our margins grew again this quarter. And I make that point because we're not overspending on customer acquisition cost. We're simply taking our fair share of the marketplace. But I would expect over time, and I'm not going to say the whole direct business and count the stores, we might grow on Tempur to 25% of the Tempur business in North America. When you look across the board in the web business, and you have to kind of break it and talk about the whole web business, some people get confused and just talk about bed in the box.
And bed in the box is really just a subcategory of web business. So when I talk about, I'm really talking about the entire web business. We see quite a few of our retail customers having great success in their web business and we're participating in that success. We also see the bed in the box companies continuing to be in the marketplace. Their growth looks like it has slowed, but we can't confirm that because none of them are public.
But we expect overall web business in bedding certainly is going to probably increase faster than storefronts.
Thank you. And our next question comes from the line of Robert Friedner with Piper Jaffray.
Hi, guys. Thanks for taking my question. Just want to talk a little more about the sales and recapture trends. Looking at the quarter, minus the hurricanes, it seems like non mattress firm sales were up around mid high teens. It seems like a little slow down from the implied growth coming out of June.
So I'm wondering what was the tone of business like during the quarter? Do you feel like you're gaining doors and slots either on the temporary Sealy side? And then finally, if you could just discuss some of those same business and recapture trends running in Q4, that would be great. Thank you.
Okay. Let me see if I can do some of that off the top of my head, and I probably might have a couple of numbers a tad off, and Bhaskar will correct me if I'm wrong. But look, we exited the 2nd quarter with expectations, I remember somewhere around 17%. We delivered 10% today. I think if you adjust it for the hurricane, give us a couple of points for the hurricane, give us about 4 points for 1 department store that had a significant decline in sales, although our balance of share did not decrease.
I think that would kind of reconcile to what I'll call a 16% growth rate today in the Q3 when we were expecting something in excess of 17%. So we're probably 2% or 3% below where we exited the Q2. Now the obvious point is why, and we don't know yet whether that was market conditions. Overall, it takes us don't know, 45 days after we report to get all the industry data we need. On early indications, on what we've been able to look at so far, it would look like the industry was not that robust in the 3rd quarter, And then our performance will ultimately look very strong relative to others in the sector.
When you look at post quarter end and going into the Q4, I got to break it up a little bit. Let's do North America first. Overall, North America trends going into the 4th quarter, I would say, were similar to the Q3 from a wholesale standpoint. When you look at the direct business, primarily the web business, which grew at 200% in the Q3, we are going to start comping against some tougher comps starting in the Q4. So I would expect the web business, although very robust, to be less than the 200% that we reported in the Q3.
Turning to international. International has generally been in the 4th quarter similar to the Q3, with a little bit of headwind from the U. K, I would call that Brexit. And then Germany has been a tad bit more competitive.
Thank you. And our next question comes from the line of Michael Lasser with UBS.
Good morning. This is Atul Maheshwari filling in for Michael Lasser. Thanks a lot for taking our questions. So of the department store of that one department store where you saw some headwind this quarter, is that going to be a headwind that will persist going forward? Or do you think that was just a 1 quarter event?
Yes. First of all, I always hate to talk about a customer, but in this case, the decline was so large, and they were a large customer, it's impossible to understand the overall trend of our business without calling out the one customer that has some well publicized issues. You never know what the future is, but my expectation is that, that will continue to be a headwind going forward from that customer. I think one of the key points is that our balance of share has not changed in that customer. It's the customer's overall sales trends have changed significantly.
Okay. Thank you. And just the second one on the web business. Can you quantify how much of the growth is due to Cocoon and how much of it is due to the Tempur Pedic branded products?
No, we usually don't we don't split that out. What I would tell you is that we're very happy with both brands, Tempur at the high end, and then Cocoon, which is a true bed in the box, at the lower end or mid price range. And both brands are doing what we expected them to do and consistent with our strategy.
Okay. Thank you.
Thank you. Our next question comes from the line of John Bowe with Stifel.
Good morning. Thanks for taking my question. I was curious and I know you don't want to give 2018 guidance, but a significant relaunch of Tempur, will it be the normal cadence where in Q1 you sell off some floor models or whatever discounts or your retailers do? And then are there sample sales that muck up the margin a little in Q2? Any color around a significant new launch?
Thank you.
Sure. I appreciate your question. And look, we called out what we're doing in 'eighteen a little early. Obviously, experiencing this because you know these major launches kind of whipsaw the numbers quite a bit. Look, this is a major launch.
This is every SKU in Tempur. This is significant. This is expensive, and we believe it sets us up for the future in a great way. I mean, this is not a minor launch. It's probably 30,000 plus beds.
If you go back to Oslo and use Oslo as kind of your thinking, it's going to take us 4 or 5 quarters to roll through the launch. Some of that timing will be dependent on our retail partners and what's best for them. So I can't give you very much from a granular standpoint. But I would say starting late Q1, certainly in Q2, you should expect 4 or 5 quarters worth of significant Tempur launch.
The one thing I would want to highlight is when one thinks about 2018, got to keep 2017 in perspective and that from a Tempur side, we did not have any significant launches.
Good point.
Thank you. Our next question comes from the line of Keith Hughes with SunTrust.
Thank you. I guess building on that last question, the will you be discontinuing the large portion
of the current Sempra line
or is this going to be a large launch in addition to the current line?
No, you should think of this as a replacement and an enhancement to the current line.
So most of
So there will be quite a few floor models that will need to be sold off.
Thank you. And our next question comes from the line of Brad Thomas with KeyBanc.
Yes, thanks. Good morning. Scott, I was hoping to ask about just channels of distribution in your customer base more broadly. In light of your references, one department store this quarter, and I guess the way the media is kind of dubbing the world being in a retail apocalypse, could you just give us an update on what your distribution base looks like today, the health of those customers and how you see that evolving going forward?
Sure. Great question. I think the media has missed some points when it comes to the retail footprint. There's no question retail has some headwinds, but we have a lot of retailers who are really winning. And the formula of every retailer that I see in bedding that's winning is really focused on a few things.
One is they're leaning into high ASP products and that usually means Tempur. They're very focused on the customer experience and the ease of shopping. They're driving higher closing rates to the customers that come in because the customers that come in are more educated and qualified and ready to purchase. They're grabbing their fair share of online. And in fact, we're helping them do that with a program we call Digital Edge.
We think that that's critical for their success. And they have a balanced advertising budget that includes not just traditional advertising, but digital. So although I think there will be winners and losers in retail and you're going to continue to see some change in the distribution, we have quite a few retailers who have leaned in to our products that are doing very well.
And if I could follow-up, Scott, I know you referenced being in the early innings of recapturing the Tempur opportunity with Mattress Firm from the exit of Mattress Firm. Can you help think about how many of the doors you've actually really been able to address to the full extent? Or said another way, how many contracts really haven't had a chance to roll over yet to give you more opportunity to gain floor space?
Yes. I'm going to do kind of general form. If you really look at what we've done so far, there really haven't been large door gains. I mean, the Tempur Pedic growth of 26% ex mat firm, that's really on the velocity increases in slots. We've talked about there are some entrepreneurs opening some new stores.
That's taken a little bit longer than we thought. And I think in 2018, we'll have some new doors open. Additionally, as you mentioned and we talked about in the prepared remarks, there are some contracts that slow down the pace of change. And I think over the next 6 months, we'll be able to give you some more color on our success on those particular relationships.
Thank you. And our next question comes from the line of Curtis Nagle with Bank of America Merrill Lynch.
Great. Thanks very much for taking the question. So just I guess a quick clarification on where North America is running. Scott, did you say around 16% going into 4Q, so adjusting out for that one big retailer and hurricane or is it something else?
Yes. I think the 16% I was reconciling to was really reconciling the Q3. And then I did say that we were running the same trends going into the 4th quarter. So I guess you could make that intellectual jump, which would be fine. I think the only thing else I should point out is in the Q4, October is the less robust month of the quarter and the lion's share of the sales in the Q4 really come through the November, December time frame.
So we started out well in the Q4, but again, it's the smallest part of the quarter.
Thank you. And we have a follow-up question from the line of Keith Hughes with SunTrust.
Thank you. Just in terms of Tempur Pedic sales, you've given us the growth rate non mattress firm. Can you give us just the total brand growth in the quarter?
The total brand growth? No, I don't we don't have that in front of us right now. We don't so I'm going to say no. What else can I give you? I guess we lost it.
Okay. Do we have another question, operator?
That concludes our question and answer session. I'd like to hand things back for closing comments.
Thank you. To the 7,000 plus 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, lenders, thank you for your confidence in Tempur Sealy Management. Operator, that ends the call.
Thank you.
Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day.