You may have heard that Tempur-Pedic (NYSE:TPX) beds will give you a good night's sleep. The patented TEMPUR material provides pressure relief, easing your way into peaceful slumber.

I've got a better way to relieve pressure. Just forget the bed altogether and sleep on a pile of Tempur-Pedic share certificates.


It's obvious that the company has become the darling that Select Comfort (NASDAQ:SCSS) used to be, until last year's debacle. Last night's quarterly report confirms it. Net sales rose 22% higher to $294.1 million. Fueled by healthier margins, earnings per share soared 44% higher to $0.49 a share. The numbers are well ahead of the $0.45 a share in profit on $278 million in net sales that analysts were expecting

Hooray for Tempur-Pedic. As a Select Comfort shareholder -- and Sleep Number bed owner -- I think I'm going to be sick.

It seems as if the market is willing to reward just one mattress maker at a time. Obviously, the bedding market didn't grow by 22% this past quarter. Retailers like Bed, Bath & Beyond (NASDAQ:BBBY), Limited's (NYSE:LTD) Bath & Body Works, and Pier 1 (NYSE:PIR) would be flying high if folks were splurging on home furnishings and feel-good knickknacks. They're not. Tempur-Pedic is in its own cool groove at the moment.

If it's pulling those kinds of numbers, its premium-mattress rivals are going to come in weak. So I'm braced for the worst when Select Comfort reports next week. Sure, it had already warned of continued softness in its mid-quarter update last month. I was just hoping for something better, you know.

Innerspring giant Sealy (NYSE:ZZ) put up respectable net sales growth of 7.5% earlier this month. However, margins contracted, leading Sealy to post a dip in profitability.

About the only thing that Tempur-Pedic and Select Comfort have in common these days is that they are both buying back shares. However, Select Comfort is buying them as its shares head lower. Tempur-Pedic, on the other hand, has spent $300 million to acquire 10.4 million shares on the rise.

In a move that shouldn't surprise anyone, Tempur-Pedic is raising its guidance. It is now looking to earn between $1.74 a share and $1.76 a share for all of 2007, well ahead of its most recent outlook, which called for profitability to clock in between $1.63 a share and $1.66 a share.

Higher guidance? That brings back warm memories of when I was on better terms with Select Comfort, as the air-chambered mattress maker was blowing away bottom-line targets. Sadly, that is so 2005 right now.

Don't let my whining bring you down, Tempur-Pedic shareholders. Just stay alert to make sure that a bad night's sleep doesn't happen to you.

Get a good night's rest with Tempur-Pedic:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.