Mattress maker Tempur Sealy (TPX) - Get Tempur Sealy International Inc. Report reported better-than-expected third-quarter earnings, declared a 4-for-1 stock split and raised its share-buyback plan to $300 million.
Tempur Sealy also will initiate a quarterly dividend early next year.
Shares of the Lexington, Ky., company at last check rose 2.7% to $89.25.
The company reported earnings of $2.29 a share, up 75% from $1.31 in the year-earlier period. Adjusted earnings more than doubled to $2.94 a share from $1.30.
Revenue rose 38% to $1.13 billion from $821 million in the year-ago period.
A survey of analysts by FactSet produced consensus estimates of third-quarter GAAP earnings of $2.19 a share, or an adjusted $2.20, on revenue of $1.07 billion.
"Despite the supply issues, this quarter marks our seventh consecutive quarter of trailing-12-month adjusted-Ebitda growth," Chairman and Chief Executive Thomas Scott said in a statement.
He added: "The company has grown adjusted Ebitda over the last five years at a compounded annual growth rate of 12%, resulting in $694 million of adjusted EBITDA on a trailing-12-month basis ending Sept. 30."
Tempur Sealy did not provide updated full-year adjusted-Ebitda guidance.
The company is targeting fourth-quarter 2020 net sales to increase by low double digits.
The stock split is payable Nov. 23 to holders of record Nov. 10.
Tempur Sealy said it would provide details of the quarterly dividend during its fourth-quarter-earnings conference call early in 2021. It targets an annual return to holders of 15% of net income.
Tempur Sealy's board lifted its buyback authorization to $300 million from $170 million. The company targets a buyback of at least 3% of shares outstanding annually, subject to market conditions.