Thursday 06/23/2011 – Momentum Stocks $AVD ($TPX)

New 52w highs with positive sales growth:
AVD SOLR LULU GCO ESIC PEGA TPX MSTR N ULTA

Biggest Daily gainers with positive sales growth:
MOBI EJ ISS MLHR AVD VNET LULU GCO ESIC HSOL

The top 10 “growthiest” companies are:
ESIC VNET HSOL ISS AVD SOLR PEGA LULU MSTR TPX

Now since the other day we had $SCSS come up as one of my growth stocks that I did a little research on, today I will pick $TPX (Tempur Pedic) to do fundamental research on. This way I can determine which bed company is better, SCSS or TPX.

Notes from the 4/21/11 earnings release

  • Net sales in the North American segment increased 37%, while International segment net sales increased 11%. On a constant currency basis, International segment net sales increased 8%.
  • Mattress sales increased 29% globally. Mattress sales increased 36% in the North American segment and 12% in the International segment. On a constant currency basis, International mattress sales increased 10%. Pillow sales increased 13% globally. Pillow sales increased 24% in North America and 3% Internationally. On a constant currency basis, International pillow sales were unchanged
  • Gross profit margin was 52.3% as compared to 49.2% ((+310bps)) in the first quarter of 2010. The gross profit margin increased as a result of improved efficiencies in manufacturing, favorable product mix and fixed cost leverage related to higher production volumes, partially offset by geographic mix.
  • Operating profit margin was 23.1% as compared to 20.6% ((+250bps)) in the first quarter of 2010. The increase was driven by improved gross profit margin partially offset by increased marketing investments.
  • The Company generated $55.7 ((+139%)) million of operating cash flow in the first quarter of 2011 as compared to $23.3 million in the first quarter of 2010.
  • During the first quarter of 2011, the Company purchased 1.32 million shares of its common stock at an average price of $47.35 for a total cost of $62.5 million. As of March 31, 2011, the Company had $137.5 million available under its existing share repurchase authorization.
  • The Company confirmed its full year 2011 guidance for net sales and earnings per share. It currently expects net sales for 2011 to range from $1.31 billion to $1.36 billion ((+20.7% over FY10)). It currently expects EPS for 2011 to range from $2.80 to $2.95 ((+32.4% over FY10)) 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. The Company noted its EPS guidance does not assume any benefit from a potential further reduction in shares outstanding related to its share repurchase program.

Notes from the 4/21/11 earnings conference call

  • Our sales growth was significantly ahead of the industry in the U.S. and in many of our major overseas markets. So we continue to expand market share worldwide. We believe this outperformance was directly related to the implementation of our strategic initiatives. The first of these initiatives is to make sure that everyone knows that they would sleep better on TEMPUR. And during the quarter, we increased our investment in advertising by nearly 60% with considerable growth both in North America and in our key international markets.
  • On a product basis, mattresses were up 29%, driven by a 14% increase in units. North American mattress sales increased 36% on a 20% increase in units. The increased average unit selling price reflects improved mix and pricing, as well as fewer floor models in 2011 as compared to the prior year. For the second quarter, with the Contour launch that Mark discussed, we expect average U.S. price to be modestly impacted by the deeply discounted floor models.
  • Within this guidance, we expect our gross margin to be up slightly more than 200 basis points for the full year, driven by our ongoing productivity plan and fixed-cost leverage, partially offset by higher commodity costs and geographic mix. Regarding the second quarter, we expect a few factors will likely result in a modest sequential decline in our gross margin rate. These factors are: floor model discounts related to our new product launches in the closeout; an expectation for higher commodity costs; unfavorable segment mix as our sales at our international segment will be down from the first quarter, which is consistent with normal seasonality; and consistent with our long-term plans, we are planning to advertise at a rate of at least 10% of sales for the full year.

Net sales in the North American segment increased 37%, while International segment net sales increased 11%. On a constant currency basis, International segment net sales increased 8%.

Advertisements
This entry was posted in Momentum Growth Stocks, Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s