Bedding Products Company Tempur Sealy Shares Down On Q3 Earnings: Here's Details

Tempur Sealy International Inc TPX shares are trading lower by around 7% after it reported weaker-than-expected Q3 FY23 results.

Sales declined 0.5% Y/Y to $1.277 billion, missing the consensus of $1.309 billion.

On a constant currency basis, total net sales decreased by 1.7%, with a decrease of 3.5% in the North American business segment and an increase of 6.7% in the International business segment.

Adjusted gross margin expanded to 45.9% from 42.5% a year ago, and the gross profit rose to $585.6 million from $545.1 million the prior year. 

This was led by improved operations and supply contracts and the impact of consumer-specific strategies.

Adjusted operating margin was 16.8% (vs. 16.1% a year ago) in the quarter.

The bedding products firm registered an adjusted EPS of $0.77, missing the analyst consensus of $0.81.

The Lexington, Kentucky-based company held $91.6 million in cash and cash equivalents as of September 30, 2023. 

In July, Tempur Sealy disclosed identifying a cybersecurity event involving certain of the company’s information technology (IT) systems. The company activated its incident response and business continuity plans, including proactively shutting down certain of its IT systems, and temporarily interrupting its operations. 

Related: Tempur Sealy To Face Earnings Risk From Cybersecurity Breach, Macroeconomic Trends, Says Analyst

Scott Thompson, chairman and CEO said, "Regarding the pending Mattress Firm transaction, we continue to expect to formally respond to the Federal Trade Commission's second request in the fourth quarter and to close the transaction in mid to late 2024."

Dividend: Tempur Sealy has declared a cash dividend on its common stock of $0.11 per share, payable on December 4, 2023, to shareholders as of November 16, 2023. 

Outlook: Tempur Sealy reduced FY23 adjusted EPS guidance to $2.30-$2.50 from $2.50-$2.70 vs. the estimate of $2.60 and projects sales to be flat Y/Y vs. flat to slightly up Y/Y earlier.

Price Action: TPX shares are down 5.84% at $38.04 on the last check Tuesday.