Lexington-based mattress maker Tempur-Pedic is dramatically increasing its marketing in a bid to raise sales even further, the company's CEO said Tuesday.
After markets closed, the company announced sales jumped 30 percent in the second quarter, while profit increased 58 percent.
CEO Mark Sarvary told analysts in a conference call that the company increased its marketing investment by more than 50 percent in the second quarter. He noted that while Tempur-Pedic in many cases has distribution as good internationally as it does in the United States, it lacks the recognition overseas that it has here.
"Although it is still quite early, we're quite pleased with the response we're seeing," Sarvary said.
Behind the quarterly growth was improved performance in both geographies. Sales increased here 29 percent, while international sales rose 34 percent. Adjusting for currency fluctuations, the international growth was 18 percent.
Sales of mattresses jumped 30 percent globally. Mattress-sales growth in North America was 28 percent compared with a 37 percent jump internationally, though that growth was 20 percent when adjusted for currency.
The company has seen "positive trends" in the early days of its rollout of the Contour mattress line, which replaces its Tempur Collection, Sarvary said.
"Contour is planned to roll out quickly, likely complete in advance of the Labor Day shopping period," Sarvary said, adding that the company will be increasing prices on the Contour and Contour Select lines later in the year.
Sales of pillows increased 25 percent globally with a 19 percent jump in North America and 31 percent internationally. Adjusting for currency, pillow sales were up 15 percent overseas.
The company earned $53.1 million in the quarter, well above $33.5 million in the same period a year ago. Earnings per share were 76 cents in the quarter, up from 46 cents a year ago.
Company executives raised their earnings guidance for the full year. They now expect annual sales to range from $1.37 billion to $1.4 billion, up from a range of $1.31 billion to $1.36 billion. Annual earnings per share are now expected to be a range of $3.07 to $3.14, a jump from a range of $2.80 to $2.95.
The company also announced Tuesday that it repurchased 1.59 million shares of its stock at an average price of $61.19 in the quarter. It ended the quarter with around 70 million shares outstanding. Tempur-Pedic's board of directors has also approved spending up to $200 million in a new share repurchase program.
The strong earnings come after Tempur-Pedic announced plans in April to expand its headquarters operations in Lexington and add 65 jobs over the next five years.
Construction on its new 100,000-square-foot headquarters at the University of Kentucky's Coldstream Research Campus is expected to begin this fall and be finished by December 2012.