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Solid North American Business to Aid Tempur (TPX) Q1 Earnings

·4 min read
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Tempur Sealy International, Inc. TPX is scheduled to report first-quarter 2021 results on Apr 29, before the opening bell.

In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 28.9% and 7.4% as well as increased 97.1% and 21.3% on a year-over-year basis, respectively.

Notably, the company surpassed earnings estimates in all the trailing four quarters, with the average being 1,711.8%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased 4.1% to 51 cents per share over the past 30 days. The said figure indicates a 50% increase from the year-ago earnings of 34 cents per share. Also, the consensus mark for revenues is $1 billion, suggesting 21.6% year-over-year growth.

Tempur Sealy International, Inc. Price and EPS Surprise
Tempur Sealy International, Inc. Price and EPS Surprise

Tempur Sealy International, Inc. Price and EPS Surprise
Tempur Sealy International, Inc. price-eps-surprise | Tempur Sealy International, Inc. Quote

Factors to Note

Broad based demand across geographies and channels is expected to have benefited Tempur’s sales in the first quarter. Strong sales performance on the back of solid demand from retail partners has been aiding the company. Moreover, its online sales gained strength in the United States.

Segment wise, the company’s North American business segment (accounting for 85% of total sales) is expected to have benefited from an uptick in consumer spending and market share gains driven by its strong competitive position within the industry. Notably, Tempur has been benefiting from consumers’ increased focus on home related spending, which has gained traction owing to the pandemic.

The Zacks Consensus Estimate for North American sales of $834 million indicates 23.2% growth from the year-ago period but a 6.7% decrease from fourth-quarter 2020. The consensus mark for the international business sales (accounting for 15% of its total sales) is $149 million, suggesting an increase of 2.8% from the year-ago reported figure but a decrease of 8.6% sequentially.

In addition to strong sales, favorable company-wide margins have been expanding overall margins and thereby increasing profitability. Furthermore, product superiority, brand strength, manufacturing efficiency and quality, omni-channel distribution platform as well as substantial cash flow are expected to have reflected on its performance.

What Our Model Indicates

Our proven model predicts an earnings beat for Tempur this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Its Earnings ESP is +0.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Retail-Wholesale sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Abercrombie & Fitch Co. ANF has an Earnings ESP of +22.92% and a Zacks Rank #1.

Builders FirstSource, Inc. BLDR has an Earnings ESP of +7.41% and holds a Zacks Rank #3.

Beacon Roofing Supply, Inc. BECN has an Earnings ESP of +499.97% and a Zacks Rank #3.

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report

Tempur Sealy International, Inc. (TPX) : Free Stock Analysis Report

Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report

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