Mattress Maker Tempur Sealy International Inc (NYSE:TPX) on the Mat after Poor Guidance


Investors in mattress maker Tempur Sealy International Inc (NYSE:TPX) did not take kindly to its downward guidance for the year and the third quarter, and proceeded to dump the stock yesterday.

Down 22.4% to $57.77, Tempur chalked up a traded volume of nearly 15 million shares, such was the selling pressure.

Shunned by investors, the stock also received a drubbing at the hands of analysts.

Tempur Sealy International Inc (NYSE:TPX) downgraded by analysts

Analysts did not wait. Stifel were kind enough to retain their Buy rating, but cut their price target from $80 to $72.

Longbow, however, downgraded Tempur from Buy to Neutral.

Keybanc stood by their Overweight rating but lowered their price estimate from $85 to $77.

Piper Jaffray cut to $63 from $84.

Tempur Sealy International Inc (NYSE:TPX) punished for downbeat guidance

Management came clean that they now expected sales for the full year to fall by 1% – 3% compared to the same period a year ago.

Consequently, full year adjusted EBITDA is expected to be between $500 million and $525 million, compared to the July guidance of $525 million – $550 million.

CEO Scott Thompson tried to put on a brave face, saying: “While our net sales are below expectations, our operational initiatives are going well and are continuing to drive considerable margin expansion.”

Though the company offered no justification for the new numbers, speculation is rife that online competitors are giving Tempury Sealy sleepless nights.

Meanwhile, investors scanning the company’s daily chart will be struck by the huge upside gap in the chart on July 28, and the downside gap yesterday.

The July 28 gains have vanished into thin air.

Meanwhile, Tempur’s woes have had a spillover effect on rival mattress maker Select Comfort Corp. (NASDAQ:SCSS), which too fell 9.16% to $22.82 after trading 1.48 million shares.


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