Tempur Sealy International (TPX) shares soar 13.4% AH after the company beat expectations in Q3. Short covering may have something to do with the outsized reaction, with short interest at 18.9% of the float as of Oct. 15.
An 111.4% increase in net sales to $735.5M was fueled in large part to acquired Sealy's contribution of $389.9M.
Tempur North America sales grew 0.6% to $242.4M in Q3, driven by a 4.8% increase in Other products revenue to $20.8M. Tempur International sales fell 3.6% to $103.2M.
Gross margin fell to 40.6% from 49.2% in Q3 2012 due to the lower margins on Sealy mattresses.
EBITDA of $115.5M was up 66.7% Y/Y.
The company reaffirms 2013 guidance: revenue of $2.425B-$2.45B (vs. consensus of $2.44B), EBITDA of $370M-$385M, and EPS of $2.25-$2.40 ($2.32).
Tempur Sealy (TPX) falls 11.82% AH as earnings and revenue miss estimates. The integration of Sealy causes gross margin to fall to 38.6% from 50.7%. CEO Mark Sarvary says the steps the company is taking "to return Tempur North America to growth… are taking longer than expected." Management trims its FY13 outlook, saying it now sees EPS of $2.25-2.40 on sales of $2.425-2.45B versus consensus of $2.75/ share on revenue of $2.5B. (PR)
Tempur-Pedic (TPX) rips higher in the post session as its Q4 easily beat Street expectations. Net earnings fell 58% Y/Y however, on weaker mattress sales and tighter margins. The company also posted mixed guidance for FY13, expecting to earn $2.55 on revenue of roughly $1.43B. Analysts are looking for $2.72 on $1.43 billion, respectively. The strong upside move likely has to do more with short covering. Recent market data has short interest pegged at 5.64M shares, or 9.3% of its float, which is a formidable position even for a multi-billion dollar company. Shares +17.7% AH.
More on Tempur-Pedic's (TPX) Q3: The company continues to get hammered by pricing pressure in the sector, with sales in North America falling off 14% Y/Y for the period, only partially offset by a 3% gain in global sales. Gross profit margin slipped 320 bps to 49.2%. The outlook for 2012 sales is lowered to $1.4B and 2012 EPS is taken to $2.55. Shares -14.4% AH. (PR)