Tempur Sealy (NYSE: TPX) reported Q3 EPS of $2.94, $0.75 better than the analyst estimate of $2.19. Revenue for the quarter came in at $1.13 billion versus the consensus estimate of $1.07 billion.

THIRD QUARTER 2020 FINANCIAL SUMMARY

• Total net sales increased 37.9% to $1,132.3 million as compared to $821.0 million in the third quarter of 2019. On a constant currency basis(1), total net sales increased 37.7%, with an increase of 43.3% in the North America business segment and an increase of 10.1% in the International business segment.
• Gross margin was 46.8% as compared to 43.9% in the third quarter of 2019. Adjusted gross margin(1) was 46.9% in the third quarter of 2020. There were no adjustments to gross margin in the third quarter of 2019.
• Operating income increased 49.4% to $180.2 million as compared to $120.6 million in the third quarter of 2019. Operating income in the third quarter of 2020 included $45.2 million of amortization for aspirational plan stock-based compensation. Adjusted operating income(1) was $227.2 million in the third quarter of 2020. There were no adjustments to operating income in the third quarter of 2019.
• Net income increased 65.6% to $121.4 million as compared to $73.3 million in the third quarter of 2019. Adjusted net income(1) increased 114.3% to $155.4 million as compared to $72.5 million in the third quarter of 2019.
• Earnings before interest, tax, depreciation and amortization ("EBITDA")(1) increased 85.7% to $279.9 million as compared to $150.7 million in the third quarter of 2019. Adjusted EBITDA per credit facility(1) increased 86.3% to $279.3 million as compared to $149.9 million in the third quarter of 2019.
• Earnings per diluted share ("EPS") increased 74.8% to $2.29 as compared to $1.31 in the third quarter of 2019. Adjusted EPS(1) increased 126.2% to $2.94 as compared to $1.30 in the third quarter of 2019.
• For the trailing twelve months ended September 30, 2020, leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA per credit facility(1) was 1.92 times as compared to 3.22 times in the corresponding prior year period.
• Net cash provided by operating activities increased to a record $327.5 million as compared to $155.8 million in the third quarter of 2019.

Financial Guidance

As previously announced, the Company has withdrawn its previously-issued full-year financial guidance for 2020 and will not provide updated full-year adjusted EBITDA guidance until there is more visibility into the worldwide operating environment. Management is targeting fourth quarter 2020 net sales to increase by low double digits and adjusted EBITDA per credit facility to grow by the high teens as compared to the same period last year.

For earnings history and earnings-related data on Tempur Sealy (TPX) click here.