Tempur Sealy soars after report says its rival will file for bankruptcy
- Tempur Sealy surged Wednesday on a report that its rival Mattress Firm was preparing to file for bankruptcy protection.
- Mattress Firm is planning to file for bankruptcy as soon as this week, Reuters reported on Tuesday.
- Tempur Sealy used to be a supplier of Mattress Firm, but terminated contracts earlier last year.
- Watch Tempur Sealy trade in real time here.
Shares of Tempur Sealy, the maker of mattress brand Tempur-Pedic, surged more than 10% on Wednesday following a report that its rival Mattress Firm was preparing to file for bankruptcy protection.
Mattress Firm, the largest US mattress retailer, will file for bankruptcy protection as soon as this week as it seeks to quit costly store leases and beef up its business, according to Reuters, which cited sources familiar with the matter.
The process is expected to be completed in a few months, the report said, adding that Mattress Firm will shed some of its stores in the process and repay its vendors in full.
Tempur Sealy used to be a supplier of Mattress Firm, but announced the termination of its contracts last year partly because of disagreement over "significant economic concessions."
As part of Tempur Sealy's quarterly earnings released on July 26, the company said its total sales increased 1.6% to $669.7 million year-over-year, missing the $692 million expected by analysts, according to Bloomberg data. Meanwhile, the company earned $0.52 per diluted share in the second quarter. Analysts were expecting $0.63.
Tempur Sealy's stock has lost 17% this year.
Now read:
- A $150 billion investment chief lays out his 4-part recession checklist - and warns we're approaching dangerous territory
- The making of an AI rock star: Kai-Fu Lee has much to say about machine learning, Google and whether China will kick our butts in AI
- Tech stocks are 'partying like it's 1999' as bubble concerns mount - but Bernstein says you should stop worrying and start buying more
