Mattress maker Tempur-Pedic International Inc. (TPX), said Thursday its profit for the first quarter increased from a year ago, mainly on improved gross margins and an 18 percent sales growth driven by its North American and International segments.
Nevertheless, shares of Tempur-Pedic plunged over 11 percent in after-hours trade, as investors expected the mattress and pillow maker to lift its outlook for the full year, which is short of current Street estimates.
Tempur-Pedic's net sales increased 18 percent, helped by North American segment that grew 17 percent and international segment advancing 19 percent.
The company's mattress sales rose 18 percent globally, driven by a 15 percent increase in the North American segment and 26 percent improvement in the international segment. Pillow sales increased 20 percent globally, with North America advancing 22 percent and International segment rose 17 percent.
Tempur-Pedic's gross profit margin improved to 53.6 percent, when compared to 52.3 percent recorded a year ago, attributed mainly due to improved efficiencies in manufacturing and distribution and fixed cost leverage related to higher production volumes.
Operating profit margin was 22.4 percent, down from 23.1 percent in the first quarter of 2011, due mainly to the company's strategic investments to drive growth, including brand advertising.
The company's net income for the first quarter rose to $56.2 million from $48.3 million in the prior-year quarter. On a per share basis, earnings rose to $0.86 from $0.68 in the same quarter last year. First-quarter net income included a net benefit of $2 million from the resolution of foreign tax matters.
On average, fourteen analysts polled by Thomson Reuters expected earnings of $0.84 per share for the quarter. Analysts' estimates typically excludes one-time or special items.
Tempur-Pedic's net sales for the first quarter increased 18 percent to $384.4 million from $325.8 million in the year-ago first quarter. On a constant currency basis, net sales grew 19 percent. Twelve analysts had a consensus revenue estimate of $384.53 million shares for the quarter.
Looking ahead to the full year 2012, Tempur-Pedic confirmed its full year 2012 outlook with earnings still expected in the range of $3.80 to $3.95 per share and net sales in the range of $1.60 billion to $1.65 billion.
Fourteen analysts on consensus, currently expect the company to earn $3.97 per share for the year, with revenues of $1.66 billion.
Tempur-Pedic shares closed at $83.75, down $3.51 or 4.02%, on a volume of 3.65 million shares on the NYSE. In after-hours, the stock plunged $11.20 or 13.19%, to trade at $72.60.
by RTT Staff Writer
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