Investing.com — Tempur Sealy (NYSE:TPX) rose more than 8% after the mattress maker reported far bigger sales numbers than expected.
The trends quarter-to-date have improved from previous expectations, and the company now estimates total third quarter net sales to grow more than 30% compared to the previous year.
On the down side, Tempur Sealy is seeing capacity constraints for U.S. Sealy products, including supply chain limitations outside the company’s control. Tempur Sealy is working with suppliers to find solutions for component shortfalls to support the elevated demand.
Tempur Sealy Chairman and CEO Scott Thompson said, “Tempur-Pedic branded products are now growing materially higher than the growth on Sealy products in the U.S. which has raised our profit expectations for the quarter.”
He added: “Free cash flow has also been strong and our confidence in positive industry trends has increased.”
This month, the company will use operating cash flow to repay a $200 million 364-day incremental term loan closed in the second quarter, resulting in an annual interest savings of approximately $5 million.
The company also announced a new head for Tempur Sealy North America as of January 1: Cliff Buster, who has been with Tempur Sealy since 2017.
Shares have nearly quadrupled since March, and the stock has eight buy ratings, two holds and no sells.