Why Tempur Sealy International Inc Stock Jumped Today

By Markets Fool.com

What happened

Continue Reading Below

Shares of Tempur-Pedic and Sealy mattress maker Tempur Sealy International (NYSE: TPX) jumped as much as 13.6% on Thursday following the company's third-quarter financial report, which included higher-than-expected adjusted profit. The stock closed the trading day up 7.3%.

Image source: Getty Images.

So what

Tempur Sealy reported revenue of $832.4 million, down 5.4% compared to its $880 million in revenue in the third quarter of 2015. EPS and non-GAAP EPS were both $1.32, up 111% and 22% from EPS and non-GAAP EPS in the year-ago quarter, respectively.

While Tempur Sealy's revenue of $832.4 million was slightly below a consensus analyst estimate for $834.8 million, the company's adjusted EPS of $1.32 was well above a consensus estimate for $1.21.

Continue Reading Below

Despite revenue coming in below both analyst expectations and management's own guidance, Tempur Sealy CEO Scott Thompson was pleased.

"The flexibility of our business model was displayed this quarter as our top line sales were below our original expectations yet we delivered significant margin expansion and 19% EPS growth," Thompson said in the company's quarterly press release.

Now what

Going forward, Tempur Sealy plans to continue to execute on its core strategy, which includes improving operating leverage, strengthening its core brands, driving higher ROIC to enhance competitive cost advantages, and expanding distribution. This core strategy will drive long-term operating performance, management believes.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early, in-the-know investors! To be one of them, just click here.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.