Tempur Sealy appoints Scott Thompson as Mattress Firm’s interim CEO

LEXINGTON, Ky. - Tempur Sealy (NYSE:TPX) International, Inc. (NYSE: TPX), a global leader in bedding products, announced today that John Eck will step down as CEO of Mattress Firm, following the company’s recent acquisition of the nation’s largest mattress specialty retailer. Scott Thompson, Chairman and CEO of Tempur Sealy, will assume the role of interim CEO during the transition period.

The company is in the process of searching for a permanent CEO for Mattress Firm and expects to complete the appointment within the next six to nine months. To facilitate a smooth transition, a consulting agreement has been established with Mr. Eck, who has led Mattress Firm for the past six years.

During his tenure, Eck is credited with guiding the retailer to outperform the market. Thompson expressed gratitude for Eck’s contributions and is looking forward to collaborating with the Mattress Firm leadership team during the interim period. The company’s stock has shown remarkable performance, with InvestingPro data revealing a 35.5% return over the past six months and currently trading near its 52-week high of $68.53.

In conjunction with these management changes, Tempur Sealy also announced that it will rebrand as Somnigroup International Inc., effective February 18, 2025. Under the new structure, Mattress Firm, Dreams, and Tempur Sealy will function as decentralized business units. While Mattress Firm and Dreams will continue as multi-branded retailers, Tempur Sealy will maintain its role as a manufacturer, serving both third-party retailers and its own direct-to-consumer channels.

Tempur Sealy is recognized for its commitment to enhancing sleep quality globally. Its portfolio includes well-known brands such as Tempur-Pedic®, Sealy®, and Stearns & Foster®, along with private label and OEM products. The company’s omni-channel retail strategy aims to meet customers’ needs across various platforms, including third-party retailers, over 750 company-owned stores, and e-commerce.

The company also emphasized its dedication to environmental responsibility, with a goal to achieve carbon neutrality for its global wholly owned operations by 2040.

This leadership transition and the upcoming rebranding are based on a press release statement from Tempur Sealy International, Inc.

In other recent news, Tempur Sealy International Inc. has completed its acquisition of Mattress Firm Group Inc. for approximately $5 billion, financed with around $2.7 billion in cash and the remainder in common stock. The company’s pro forma leverage post-acquisition was about 3.8x for the 12 months ending September 30, 2024, leading to the confirmation of Tempur’s ’BB’ ratings by S&P Global. However, the ratings on Tempur’s senior notes were lowered to ’BB-’ from ’BB’.

The company is now expected to deleverage to about 3.2x over the next year. According to S&P Global, Tempur’s sales are forecasted to increase at least 3% in fiscal 2025, despite expected constraints on consumer discretionary spending. In addition, the company’s free operating cash flow has improved due to higher profitability, lower capital expenditures, and lower working capital use.

In other developments, UBS and Truist Securities have raised their price targets for Tempur Sealy. UBS analyst Atul (NSE:ATLP) Maheswar increased the target to $78 from $67, while Truist Securities raised its price target to $72 from $69. Both firms maintain a Buy rating on the stock, anticipating financial benefits from the recent acquisition and potential industry recovery.

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