Tempur (TPX) to Report Q4 Earnings: Here's What to Expect
Tempur Sealy International, Inc. TPX is scheduled to report fourth-quarter 2022 results on Feb 9, before the opening bell.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 5.4% but declined 11.4% from the previous year. Revenues missed the consensus mark by 0.8% and declined 5.5% on a year-over-year basis.
It surpassed earnings estimates in 14 of the trailing 15 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at 52 cents per share over the past 60 days. The estimated figure indicates a 40.9% decrease from the year-ago number of 88 cents. Also, the consensus mark for revenues is pegged at $1.22 billion, suggesting a 10.3% year-over-year fall.
Factors to Note
Tempur’s fourth-quarter top and bottom-line results are likely to reflect declines from the previous year due to prevailing industry headwinds and unfavorable foreign exchange. Also, advertising investments and operating expense deleverage is likely to have pressurized margins.
Tempur Sealy International, Inc. Price and EPS Surprise
Tempur Sealy International, Inc. price-eps-surprise | Tempur Sealy International, Inc. Quote
Segment wise, the North American business segment (accounted for 82.4% of third quarter sales) is expected to have declined in the fourth quarter due to lower wholesale channel sales. Direct sales are also likely to have suffered from prevailing macroeconomic pressures. The International business (17.6%) is expected to have been pressurized mainly due to wholesale channel and currency headwinds.
TPX expects North America sales to fall in the high-single digits and International sales are likely to be down in the high teens. Foreign exchange headwinds are anticipated to have reduced sales by $65 million and earnings by $15 million. This apart, launch expenses of $25 million to support the Stearns & Foster products, including $10 million of sales and marketing expenses, is expected to have ailed margins. Advertising investments are likely to have been similar to the third quarter.
The Zacks Consensus Estimate for North America sales of $964 million indicates a 9.2% decline from the year-ago period. The consensus mark for the International business sales is pegged at $244 million, suggesting a decrease of 18.1% from the year-ago period.
Channel-wise, the consensus estimate for Direct sales is pegged at $283 million, which indicates a 9% decline from the year-ago period's reported figure. The consensus mark for the Wholesale sales is pegged at $928 million, suggesting a decrease of 11.5% from the year-ago period's reported number.
That said, TPX’s strength in online sales, combined with the acquisitions, bodes well. Furthermore, product superiority, brand strength, manufacturing efficiency and quality, an omni-channel distribution platform, as well as substantial cash flow, are expected to have impacted its performance.
What Our Model Indicates
Our proven model does not conclusively predict 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. That is not the case here, as you will see below.
Earnings ESP: It has an Earnings ESP of 0.00%. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:
Carrols Restaurant Group, Inc. TAST currently has an Earnings ESP of +39.54% and a Zacks Rank #2.
Shares of Carrols Restaurant Group have declined 18.6% in the past year. TAST has a trailing four-quarter earnings surprise of negative 110.8%, on average.
Domino's Pizza, Inc. DPZ has an Earnings ESP of +1.20% and a Zacks Rank #3.
Shares of Domino’s have gained 2.2% in the past three months. DPZ has a trailing four-quarter negative earnings surprise of 6.8%, on average.
Shake Shack Inc. SHAK has an Earnings ESP of +8.08% and a Zacks Rank #3.
Shares of Shake Shack have declined 14.5% in the past year. SHAK’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 37.2%, on average.
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Domino's Pizza Inc (DPZ) : Free Stock Analysis Report
Tempur Sealy International, Inc. (TPX) : Free Stock Analysis Report
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Shake Shack, Inc. (SHAK) : Free Stock Analysis Report
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