Tempur Sealy's Shares Rise After Q3 Sales Beat, Narrowed 2024 Adjusted EPS Guidance

Sales Beat Estimates, Adjusted EPS Guidance Tightened

Tempur Sealy International Inc.'s (NYSE:TPX) stock rose in premarket trading Thursday after the mattress maker beat market expectations for fiscal third-quarter sales and narrowed its adjusted EPS guidance for the full year of 2024.

The company reported net sales of $1.17 billion for the quarter ended Sept. 30, an increase of 7.6% year-over-year, surpassing estimates of $1.15 billion. Net income for the quarter was $101.6 million, or $1.65 per share, up 22.6% year-over-year and above the consensus of $1.55 per share.

Tempur Sealy also narrowed its adjusted EPS forecast for 2024 to $5.15-$5.25, from its previous range of $5.00-$5.30, indicating confidence in its business outlook despite supply chain disruptions.

Strong Demand for Mattresses, Price Increases Offset Costs

The company attributed its strong sales growth to continued demand for its mattresses and bedding products, driven by rising consumer spending and the ongoing trend of working from home.

Tempur Sealy also benefited from price increases implemented to offset higher raw material and transportation costs, which weighed on its profit margin in the previous quarter.

The company's international business contributed to the overall sales growth, with double-digit revenue increases in Europe and Canada. Tempur Sealy continues to invest in e-commerce and digital marketing to expand its reach.

Outlook: Cautious Optimism Amidst Economic Uncertainty

Despite the positive results and narrowed guidance, Tempur Sealy remains cautious about the economic outlook and potential headwinds in the coming quarters.

The company acknowledged the impact of inflation and rising interest rates on consumer spending, as well as ongoing supply chain challenges.

Tempur Sealy expects to continue to face these challenges, but it remains optimistic about its long-term growth prospects. The company is focused on innovation, cost control, and targeted marketing to drive future growth.