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Tempur-Pedic 3Q results: A string of superlatives

David Perry, Executive Editor -- Furniture Today, November 4, 2007

Warning: This column contains an unusual number of superlatives. Given the current state of the bedding industry, I don't get to use this kind of language too often. Bear with me, please.

Wow! Incredible!

There's no doubt that Tempur-Pedic continues to write an astounding growth story. The producer's third-quarter results had me shaking my head in disbelief. I keep hearing how tough things are at retail. I guess somebody forgot to tell Tempur-Pedic.

The memory foam leader cranked out awesome (OK, I'll try to scale back on the adjectives) results. Earnings per share surged 44%. Net sales rose 22%. Retail sales increased 27% worldwide. Domestic mattress units were up 22%. Domestic pillow units were up 23%.

The hottest bedding company in the industry continues to sizzle.

Tom Bryant, Tempur-Pedic's CEO and president, hailed the company's "outstanding results." And he made an intriguing observation: "While Tempur-Pedic is already the industry leader for profitability, we believe our year-to-date financial results are consistent with our goal of ultimately becoming the worldwide bedding leader in terms of both sales and profitability."

Look out Sealy. The Tempur-Pedic train is chugging toward you.

Bryant also said that consumers continued to express their preference for Tempur-Pedic's proprietary Tempur material "as we lead the technology shift away from innersprings." Look out, innerspring producers. That train is headed for you too.

What's working for Tempur-Pedic? Everything. The sales team has exceeded its goals for slot growth, account productivity and market-share gains, Bryant said. The new advertising campaign "appears to be resonating exceptionally well" with target consumers, affluent baby boomers, according to Bryant.

Business has been so strong, with U.S. retail demand exceeding expectations in the third quarter, that there have been some product shortages. The company dealt with that problem with various moves, he said, adding the company now is running "in a more optimal fashion, having largely eliminated shortages by the end of the quarter."

Shortages in this lousy business climate? Market-share gains? An advertising campaign that crackles with energy? It almost sounds like we're talking about business on another planet. But we really are talking about the World According to Tempur-Pedic, where the "tempurature" is soaring.

OK, now that I'm done writing about Tempur-Pedic, I'll lay off the superlatives. But in this tough business climate, it's fun to dust them off and put them to use for a while.

Contact David Perry at dperry@reedbusiness.com

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