No cannibalization for Tempur Sealy in Mattress Firm roll-out

“While Tempur Sealy factored in some cannibalization into the $400 million sales lift from adding Mattress Firm and Big Lots as customers, it is not yet noticing any cannibalization with the Mattress Firm roll-out,” Piper Sandler said. “Direct sales growth has held steady, and Tempur Sealy’s largest customers haven’t noticed any impact.”

“Tempur Sealy plans to spend a record amount, which implies an $80 million increase (or up 30%) from 2019 ad spend of $280 million,” Piper Sandler said. “Importantly, Tempur Sealy noted that much of the increase is related to co-op ad spend (based on contracts), which won’t be paid out if the sales growth isn’t there to support it.”

It will be very interesting to see how this pans out. It sounds good on the surface, but I'm not sure leaving Serta for Sealy will be a good move for Mattress Firm. 

Time will tell and I'll be watching.