Tempur-Pedic stays on track with 30% sales growth in quarter

Earnings jump 58.4% as gross margin improves

Larry Thomas -- Furniture Today, July 27, 2011

LEXINGTON, Ky. — Bedding major Tempur-Pedic said its second-quarter sales were 30% above last year's second quarter as the company's advertising and marketing efforts continued to drive growth.

Second-quarter profits, meanwhile, leaped 58.4%, and gross margin was 52.9% of sales - 4.2 percentage points ahead of the second quarter of 2010.

"We are pleased with our second quarter performance. We executed well on new product rollouts across the globe, broadening our appeal to consumers," said Mark Sarvary, CEO. "Productivity programs continue to expand our margins, and our strategic investments in advertising are driving awareness and are already driving growth."

Worldwide sales totaled $342.2 million in the second quarter, up from $263 million in last year's second quarter.

Mattress sales in North American were $175.2 million, up 28.2% from $136.7 million in the same quarter last year.

Second quarter net income totaled $53.1 million or 76 cents per share. That's up from $33.5 million or 46 per share in last year's second quarter.

For the first six months of 2011, sales totaled $668.1 million, an increase of 29.2% from $516.9 million in the first six months of 2010.

Six-month net income was $101.3 million or $1.44 per share. That's an increase of 52% from $66.7 million or 90 cents per share in the first half of 2010.

Tempur-Pedic also boosted its sales and earnings estimates for the year. The company now projects sales to be $1.37 billion to $1.4 billion and earnings per share to be $3.07 to $3.14. In April, the company had projected sales at $1.31 billion to $1.36 billion and earnings per share of $2.80 to $2.95.

In 2010, the company had sales of $1.11 billion and earnings per share of $2.16.

Tempur-Pedic also announced that its board of directors has authorized a stock repurchase program of up to $200 million. It replaced a previous repurchase program that resulted in the buyback of 2.91 million shares during the first half of this year. The total cost was about $160 million.