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Tempur Sealy expects to dominate growth in bedding market

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Tempur Sealy debuts new products in Las Vegas market

Tempur Sealy International (TPX) said in January 2015 that it will debut lines from three of the most recognized industry brands in the Las Vegas market. It has introduced new product lines from Sealy Posturepedic, Stearns & Foster, and Tempur-Pedic.

The full range of Tempur Sealy’s branded products will be on display in Las Vegas where potential customers will be able to have a look at the best brands in the mattress industry under a single roof.

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TPX wins awards from Mattress Firm

In February 2015, TPX’s peer Mattress Firm Holding Corp. (MFRM) in Los Angeles awarded Tempur Sealy the Strategic Partnership of the Year award as well as the Best In-Store Service award.

The Strategic Partnership of the Year award is given to a vendor partner that shows outstanding performance and contributes strategic collaboration in order to increase sales and profits. The Best In-Store Service award recognizes the supplier that provides excellent service to individual retail stores as well as distribution centers.

TPX looks to increase operational efficiency

Tempur Sealy (TPX) is looking to focus on increasing its operational efficiency by cutting costs and thereby increasing operating margins for all three of its business segments.

For fiscal 2015, TPX will look to minimize wasteful practices by standardizing best practices and embedding lean principles. The company also aspires to ensure smooth production by reducing overtime with a larger focus on product quality as well as customer satisfaction.

The company has already initiated cost reduction projects related to Sealy in the last quarter of 2014.

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TPX provides growth targets for 2015–2018

In its investor presentation, TPX provided various growth targets it wants to achieve in the next four financial years. The firm has targeted a 6% annual growth in the period from 2015–2018. It’s also looking to improve its operational efficiency by 50 bps (basis points) in that period.

TPX also wants to increase shareholder value by deleveraging to 3x with an adjusted EPS growth of 15%.

Thus, Tempur Sealy expects to dominate growth by increasing operational efficiency and shareholder value in the mattress and bedding market.

Growth targets for peers

According to Tempur Sealy’s investor presentation, competitor Select Comfort (SCSS) has targeted an EPS of $2.75 by 2019, and Bed Bath & Beyond (BBBY) is targeting an EPS of $2.35 by the end of the same period.

TPX has an exposure of 2.97% to the SPDR S&P Homebuilders ETF (XHB). SCSS has a 0.10% exposure to the iShares Russell 2000 ETF (IWM), and Bed Bath & Beyond (BBBY) has an exposure of 0.07% to the SPDR S&P 500 ETF (SPY).

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