Tempur Sealy’s stock set to rally after stock split, dividend plans and big profit beat

/ / News

Shares of Tempur Sealy International Inc. were indicated up more than 4% in premarket trading Thursday, after the mattress and bedding maker declared a four-for-1 stock split, said it planned to initiate a dividend and reported a third-quarter profit that was well above expectations. The stock split will go into effect in the fourth quarter of 2020 to make the shares “more accessible to new investors” and improve liquidity; the stock closed Wednesday at $86.90. The company said it also boosted its stock repurchase program by $170 million to $300 million. Separately, net income rose to $121.4 million, or $2.29 a share, from $73.3 million, or $1.31 a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share came to $2.94, above the FactSet consensus of $2.20. Sales rose 37.9% to $1.13 billion to beat expectations of $1.07 billion. The company had withdrawn its full-year financial guidance given uncertainties related to the COVID-19 pandemic, but said it expects fourth-quarter sales growth in the low double digits percentage range, while the FactSet sales consensus of $937 million implies a 7.5% rise. The stock has slipped 0.2% year to date through Wednesday, while the S&P 500 has gained 1.3%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.