Seems like those automakers are really stirring up trouble with their employee-discount promotions. Not only has Income Investor pick La-Z-Boy
After the close yesterday, Tempur-Pedic announced that it was revising its guidance lower. Management now projects revenue for the fiscal year (ending in December) on the order of $845 million to $855 million (versus a mean estimate of about $885 million) and earnings of $1.05 to $1.07 per share (versus the estimate of $1.12). Guidance is also likewise reduced for the current (third) quarter -- the outlook now stands at revenue of between $203 million and $207 million ($227 million estimate) and EPS of between $0.22 and $0.23 (estimate of $0.29).
In yakking up the quarter, company executives blamed several factors, themselves not among them. First off was a statement that the mattress industry overall was, pardon the pun, soft in the third quarter because of auto-industry promotions. Management then tagged overall consumer sentiment and pointed to Hurricane Katrina and high gas prices as potential factors. Last, but not least, was the direct impact of the hurricane and the loss of business from that area. You can also throw in high chemical prices and transportation costs on the expense side.
So, just to review, we have management blaming car sales, weather, gas prices, and chemical prices for the shortcoming. At least you can't accuse management of failing to cover its bases. But wait, here's the best little nugget: After all that, management did concede that it's "possible" that sales were affected by competition.
No kidding? Gee, I thought competitors like Sealy, Simmons, Serta, and Motley Fool Hidden Gems recommendation Select Comfort
I've actually spent a fair bit of time looking at Tempur-Pedic's stock, since it appeared cheap by some metrics. At this point, though, it's going back near the bottom of my watch list. Lots of people have been talking this one up over the past few months, and that could make for some unwelcome volatility. I'm not writing off the company or the stock, but I'll sleep better for now if I stay away until the dust settles a bit.
Rest easy with more from the Fool archives:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).