U.S. mattress makers go into slumber as consumer confidence slides

2 minute read

Workers carry mattresses into a hotel in downtown Park City, Utah January 23, 2002. REUTERS/Rick Wilking/File Photo

Register now for FREE unlimited access to Reuters.com

April 27 (Reuters) - A decline in discretionary income and consumer confidence due to record inflation is likely to dent revenue of U.S. premium mattress makers, who are already struggling to sustain the demand seen during the peak of the pandemic.

Industry leader Tempur Sealy International Inc (TPX.N), which saw its sales soar through the early months of lockdowns as people upgraded their home furnishing, is expected to grow at a slower pace than the past six quarters.

The slowdown is thanks to the infrequent nature of bedding product purchases, record inflation and a fall in U.S. home sales due to high mortgage rates.

Register now for FREE unlimited access to Reuters.com

"Inflation was high, gas prices increased - so the overall macro coupled with lower consumer confidence domestically is essentially causing the slowdown in a lot of these big-ticket discretionary items," UBS analyst Atul Maheshwari said.


Smaller rival Sleep Number Corp (SNBR.O) reported weaker-than-expected revenue and profit last week, as it grappled with delayed supply of semiconductors used in making its smart mattresses and a drop in demand.

The company also cut its profit forecast for 2022 after demand in March came in less than its expectations following the beginning of the war in Ukraine. Analysts also tip peer Purple Innovation Inc (PRPL.O) to follow suit and trim its outlook.

Tempur Sealy, which is reporting its first-quarter earnings on Thursday, has also delayed the launch of a new line of products to next year.

Still, some industry experts said that Tempur Sealy's better-established supply chain and pricing power would help the company have an edge over its other publicly traded rivals.

"Tempur Sealy is a best-in-class performer in terms of just their execution and strong relationships with wholesalers - a high-quality firm that has done the right things to position itself for growth," BofA Global Research analyst Curtis Nagle said.


* Analysts polled by Refinitiv expect Tempur Sealy to report a 15.3% increase in revenue for the first quarter, with its North America division, which accounts for more than four-fifths of its revenue, posting the smallest growth in seven quarters.

* Earnings per share, they expect, will decline 5.5% from a year earlier to 60 cents, marking the first decline in nearly two years.

Reuters Graphics


Mattress shares
Register now for FREE unlimited access to Reuters.com
Reporting by Praveen Paramasivam in Bengaluru; Editing by Sweta Singh and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.