Not Sleeping Well? It's Because Of Sealy (ZZ)

Sealy Corporation ZZ just reported its quarterly earnings, and it missed estimates, causing investors to roll over on their mattresses. The company reported third quarter earnings of 4 cents versus the 5 cents analysts had been expecting. It also missed on top line growth, reporting revenues of $346.2 million versus consensus of $364.00 million. This was a decline of 1% from the same period, one year ago. Sealy's reported gross margins of 39.7%, a drop of 205 basis points. The company said it now sees 2010 adjusted EBITDA growth of 4-6%. "While our third quarter results reflect the inconsistent industry demand and on-going pressures in the overall macroeconomic and retail environment, we remain focused on actions within our control to drive our future performance. In light of this challenging marketplace, we are actively working with our retail partners to execute promotions that will bring the consumer back into their stores, while continuing to make investments in new product rollouts and new product development to drive future sales growth. While we would like to have had both rollouts completed faster, both lines are now performing better than their predecessors and have shown improvement from the beginning to the end of the quarter. In addition, our 2009 Stearns & Foster line continues to deliver strong growth," said Larry Rogers, Sealy's President and Chief Executive Officer. Shares of Sealy's are being hit hard in after hours trading, down more than 8% to $2.55.