Why Tempur-Pedic Shares Plummeted

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mattress maker Tempur-Pedic International (NYSE: TPX  ) plunged 22% on Friday after the company's full-year forecast missed Wall Street's view.

So what: While Tempur-Pedic's first-quarter profit rose 16% on strong sales, a particularly weak outlook for 2012 is triggering concerns over slowing growth. The stock has been on a tear over the past several months on impressive revenue growth, but today's news is forcing Mr. Market to sober up rather quickly.

Now what: Management now sees full-year EPS of $3.80 to $3.95 on revenue of $1.6 billion to $1.65 billion, versus the consensus of $3.97 and $1.66 billion. Longer-term, CEO Mark Savary noted on a conference call with analysts that the company still expects to meet its goal of $2 billion in sales by 2014 and $3 billion by 2016. So for value-vultures with a multiyear time frame, today's big pullback might be a good opportunity to swoop in.

Interested in more info on Tempur-Pedic? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies 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 Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1867143, ~/Articles/ArticleHandler.aspx, 9/1/2014 3:39:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement