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Mattress Maker’s Earnings Spike 295% As Sales Growth Booms

Mattress maker Tempur Sealy (TPX) on Thursday reported second-quarter earnings that easily beat views. TPX stock rose modestly Thursday.




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The company, the world’s largest bedding provider, reported the results as it faces questions about whether it can meet demand from health-focused consumers looking to remake their homes during the coronavirus pandemic.

Tempur Sealy Earnings

Estimates: Wall Street expected Tempur Sealy to earn 57 cents per share, according to FactSet, a 235% jump. Revenue was seen climbing 70% to $1.13 billion.

Results: Tempur Sealy earnings shot up 295% to 79 cents a share as revenue soared 76% to $1.17 billion.

Outlook:  The company sees full-year adjusted EPS of $3.10-3.25 with sales growth topping 35%. Analysts have forecast Tempur-Sealy earnings of $2.72.

Tempur Sealy also raised its quarterly dividend by 29% to 9 cents a share.

Tempur Sealy said its growth is significantly outstripping solid industry growth. It did not discuss supply chain concerns, something that has plagued the home furnishings market and goods production overall worldwide.

In May, the company said that orders for its mattresses had “accelerated” since its first-quarter earnings call. The popularity of its Tempur-Pedic mattresses, the company said, aided with that acceleration.

But it said its backlog during the second-quarter had built up as a result. CEO Scott Thompson, in a statement, said the demand was “likely to result in some supply constraints and plant inefficiencies into the third quarter.”

The company, which sells mattresses online and in stores, said it would delay part of its new U.S. launch of Sealy products to catch up with current demand. While that demand initially strained its chemical and foam supplies, the availability of those materials had improved, it said.

International Growth For TPX Stock?

TPX stock rose 4.3% to 39.25 in the stock market today, suggesting a move back above its 50-day line. Shares on Wednesday were below a 41.13 buy point of a flat base. The stock has a strong 93 Composite Rating. Its EPS Rating is 88.

Among other bedding and mattress stocks, Sleep Number (SNBR), Casper (CSPR) and Purple (PRPL) were not yet trading.

Tempur Sealy, in recent years, increasingly tried to channel sales toward its more expensive products to ward off competition from the mattress industry’s low end, where bed-in-a-box offerings became more prevalent. Although it also sells Cocoon, its own bed-in-a-box mattress, online for below $1,000.

Tempur Sealy in May also said it had agreed to acquire Dreams, a specialty bed retailer in the United Kingdom, for around $475 million. Bank of America analysts said they believed the deal was “a strong indicator of TPX’s increased focus on international growth.”

The TPX stock analysts then said that internationally, the mattress industry tends to be a little more fragmented, with no one dominating the landscape.

They added that “given that TPX already has the best known brands and existing distribution networks, with more strategic emphasis, we believe the international segment will likely take over the U.S. as the primary growth driver in the years ahead.”

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