Lexington, Kentucky - Tempur-Pedic International Inc, which claims to be the leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, has reported sales in the third quarter of 2010 at $295.8 million, up 32 percent on the same period in 2009. Earnings per share also rose, by 82% to $0.62, the firm said in a 19 Oct announcement.
The bulk of the increase came in North America, where net sales increased 47 percent, while international net sales rose 4 percent. On a constant currency basis, international sales increased 11 percent, Tempur's announcement pointed out. The firm's product range is largely based on visco-elastic polyurethane foams.
Mattress sales increased 33 percent globally: up 46 percent in the North American segment and 3 percent in the international segment, or 10 percent on a constant currency basis. Pillow sales increased 20 percent globally: 39percent in North America and 3 percent internationally, or 7 percent on a constant currency basis.
Other product sales increased 37 percent globally: 52 percent in North America and 8 percent internationally, or 15 percent on a constant currency basis.
Tempur's gross profit margin was 51 percent as compared to 47.6 percent in the third quarter of 2009, the firm reported, as a result of fixed cost leverage, improved efficiencies in manufacturing, and favorable product and channel mix, partially offset by higher commodity costs and geographic mix.
Operating profit margin was 23 percent as compared to 19 percent in the third quarter of 2009. The increase was driven by gross profit margin and operating expense leverage, Tempur said.
As a result of the improvements, the company says it generated $71.9 million of operating cash flow as compared to $55 million in the third quarter of 2009.
Chief Executive Officer Mark Sarvary commented, "We are pleased with the market share gains and the sales and earnings growth we have achieved in the third quarter. Throughout 2010 we have grown sales and profit while improving our competitive position: strengthening our product line, improving the effectiveness of our marketing and increasing our margins.
"We continue to project considerable potential for growth for Tempur-Pedic over the coming years, and over the coming quarters we will invest to capitalise on this opportunity," his statement concluded.
During the third quarter of 2010, the company says it purchased 1.8 million shares of its common stock at an average price of $27.57 for a total cost of $50.0 million. During the first three quarters of 2010, it bought 8.5 million shares of its common stock at an average price of $29.41 for a total cost of $250.0 million.
This process will continue, Tempur said, saying that the Board of Directors had expanded the company's existing share repurchase programme by $50.0 million for a total authorisation of up to $150.0 million.
Tempur-Pedic currently expects net sales for 2010 to range from $1.095 billion to $1.115 billion, with EPS for 2010 ranging from $2.05 to $2.10 per diluted share. The company noted its expectations are based on information available at the time of this release, and are subject to changing conditions, many of which are outside the Company's control. In addition, its EPS guidance does not assume any benefit from a potential additional reduction in shares outstanding related to its repurchase authorisation.