Lexington, Ky. - Tempur Sealy International Inc. (NYSE: TPX) saw its stock plunge 7.4% early Thursday following its announcement of lower-than-expected third-quarter earnings and a downward revision of its guidance. The mattress company cited a weak U.S. bedding market as the key factor behind the disappointing results.
For the quarter, Tempur Sealy reported net income of $113.3 million, or 64 cents per share, compared to $132.7 million, or 75 cents per share, in the same period last year. Adjusted earnings per share came in at 77 cents, falling short of the FactSet consensus estimate of 81 cents.
Furthermore, sales declined by 0.5% to $1.277 billion, below the expected $1.309 billion according to FactSet.
Despite these challenges, Chief Executive Scott Thompson noted the company's robust third-quarter operating cash flows and expanding gross margins. He added, "We believe Tempur Sealy outperformed the broader bedding market, demonstrating solid sales and earnings against an operating environment that presented difficulties."
Thompson acknowledged that while the U.S. bedding market was softer than anticipated, this was partially offset by the company's double-digit growth in international sales.
As a result of these factors, Tempur Sealy adjusted its full-year earnings per share guidance to a range of $2.30 to $2.50, down from its previous projection of $2.50 to $2.70.
Year to date, Tempur Sealy's stock has gained 18%, outperforming the S&P 500 which has gained 10%.
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