NEW YORK ( TheStreet) -- Stock of mattress maker Sealy ( ZZ) has plunged 7.7% to $3.40 after the company reported first quarter earnings that fell below the Wall Street consensus estimate.

Sealy on Tuesday posted earnings of 3 cents a share, compared with 5 cents a share in the prior year quarter, missing the Wall Street consensus by a penny. Affecting the company's first quarter outcome was an increase in selling, general and administrative expenses.

Going forward, Sealy says it is "encouraged by the stabilization we have seen in retail demand across our business segments and with the signs of stability in both the macro-economic and consumer credit market environments."

Sealy is the bedding industry's largest global manufacturer with sales of $1.3 billion in fiscal 2009. It operates 25 plants in North America.

Sealy peer Tempur-Pedic International ( TPX) has edged down 0.1% to $30.70, while Select Comfort ( SCSS) is down 1% to $8.

Select Comfort on Mar. 29 said it entered into a new credit agreement with Wells Fargo ( WFC). The credit agreement has a term through June 2012 and provides a commitment of up to $20 million; replacing an existing credit facility with a syndicate of banks.

-- Reported by Andrea Tse in New York

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