No More Tempur Tantrums

Earnings fall sharply, you lower your guidance for the balance of the calendar year, and still your stock jumps 13% on the news?

It's good to be Tempur-Pedic (NYSE: TPX). Then again, perhaps the company behind the beds and pillows made with its special pressure-relieving material was due for a bounce. Even after Friday's recovery, Tempur-Pedic shares have shed more than half of their value in 2008.

You also have bleaker reports coming out of the company's rivals, including air-chambered-mattress maker Select Comfort (Nasdaq: SCSS) and innerspring giant Sealy (NYSE: ZZ).

Oh, and one can't forget that while watching second-quarter profits fall by 31% on a per-share basis to $0.27 is bad, analysts were already braced for earnings to come in at just $0.23 a share.

Net sales fell by 7%, but that was padded with foreign currency gains overseas. On a constant currency basis, international sales dipped 9%. Things were even worse closer to home, with the Kentucky-based company suffering a 13% top-line dip domestically.

The only business channel to post year-over-year improvement during the period was health care, but that accounts for just a 5% sliver of the company's revenue mix.

Mattress makers were supposed to buck the economic downturns. More conventional furniture companies such as Hooker Furniture (Nasdaq: HOFT), La-Z-Boy (NYSE: LZB), and Furniture Brands (NYSE: FBN) will fall in and out of favor with real estate trends, but lumpy beds beg to be replaced. We're either putting up with inadequate beds longer or shunning high-end bedding specialists to save some money.

Keep an eye on how Tempur's competition keeps up. As long as Tempur-Pedic holds up better than the pack, it will probably be one of the companies to bounce back the strongest when the niche comes back into favor.

Until then, rest carefully.

Other bedtime stories:

• When Box Springs No Longer Spring
• Select Comfort: No More Sheep to Count?
• Monster Under Tempur-Pedic's Bed