Tempur-Pedic reduces sales, earnings expectations
By Furniture Today Staff -- Furniture Today, October 10, 2005
Lexington, Ky. — Visco-elastic mattress producer Tempur-Pedic International last week reduced its sales and earnings expectations for the year, partly because consumers are spending more money on cars and less on mattresses.
Tempur-Pedic said it now expects this year's sales will range from $845 million to $855 million, up 23% to 25% from last year but below the $880 million to $890 million the company forecast earlier.
Pro-forma earnings for the year are expected at $1.05 to $1.07 per share, up 28% to 30% from 2004 but down from earlier guidance of $1.10 to $1.13.
CEO Robert Trussell Jr. said in a statement that recent data indicate the U.S. mattress industry got off to a slower start in the third quarter than had been expected.
"Our retail store customers and industry analysts attributed this trend primarily to the very attractive incentives offered by the U.S. automotive industry this summer," he said.
"We believe these promotions diverted consumer spending away from other big-ticket items such as mattresses," Trussell said.
Other factors include a "significant dampening of consumer sentiment nationally," which has appeared to hamper normal seasonal sales growth since Labor Day, and the effects of Hurricane Katrina.
"We have analyzed our sales patterns, and estimate that in the (Gulf Coast) disaster area we are likely to lose approximately $1 million in net sales per month," Trussell said.
