Tempur-Pedic Shares Rise on First Retail Store Opening


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Following the likes of Apple (NASDAQ: AAPL ), Tempur-Pedic International (NYSE: TPX ) announced Tuesday that it opened its first retail store. Shares of the mattress producer rose markedly after the announcement.

The new store is intended to engage consumers, according to Tempur-Pedic.

"We're excited to bring our products to life in a retail environment designed to provide product education, build consumer awareness and enhance brand loyalty," said Patrice Varni, Vice President of direct-to-consumer sales and marketing in a statement.

The 3,500 square-foot Massachusetts store opening will be the first of many over the next year, announced Tempur-Pedic. The company said it will open a second store later this year in Ohio.

Tempur-Pedic's venture into retail may be its latest effort to fight falling revenues and margins from the most recently reported quarter. Last week, the company unveiled TEMPUR-Weightless and TEMPUR-Breeze mattresses to provide improved responsiveness and climate control, respectively.

"The specialty mattress market in the U.S. has experienced ongoing and dramatic change in recent months, characterized by a crowded, complicated and competitive retail environment," wrote Oppenheimer in an August 1 research note.

Tuesday's news comes in the wake of a more than 35 percent year-to-date decline in Tempur-Pedic shares. Much of this decline occurred in early June, when the company released full-year earnings per share and revenue projections below Wall Street analysts' expectations.

Late July, however, the company reported second-quarter earnings that exceeded analysts' lowered expectations by a margin of more than 15 percent.

Competitor Sealy Corporation (NYSE: ZZ ) traded around 5.8 percent higher year-to-date. The company beat or met analyst earnings per share estimates for the first two quarters of 2012, following a notable earnings miss in fourth-quarter 2011.

Tempur-Pedic was trading approximately 5.2 percent higher for the day while Sealy Corporation traded higher by around 0.6 percent.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas
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