Bedding products provider Tempur Sealy International (NYSE:TPX) has announced a better-than-expected first quarter performance on the bottom line front alongside the $4 billion acquisition of Mattress Firm.
Revenue declined 2.4% year-over-year to $1.21 billion and was largely in line with estimates. EPS at $0.53 though came in ahead of expectations by $0.02. While the company witnessed tepid sales in North America, the impact was partially offset by gains in the International business segment.
Looking ahead, for the year 2023, TPX expects EPS to hover between $2.60 to $2.80. Sales are anticipated to rise in the mid-single digits during this period.
Separately, TPX has also agreed to acquire Mattress Firm. The latter is the largest specialty retailer of mattresses in the U.S. The $4 billion acquisition is expected to close in the second half of 2024 subject to closing conditions.
Importantly, the move is expected to boost TPX’s product development as well as manufacturing capabilities.
Overall, the Street has a $44.50 consensus price target on TPX pointing to an 18.29% potential upside in the stock. That’s after a nearly 41% rise in TPX shares over the past year.
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