Select Comfort posts profit despite 26.2% sales decline
Price hikes, cost cutting help airbed maker
Larry Thomas -- Furniture Today, October 23, 2008
MINNEAPOLIS — Select Comfort, maker of the Sleep Number airbed, reported a profit of $983,000 in the third quarter despite a 26.2% decline in sales.The company said a blend of price increases and cost-cutting measures enabled it to remain profitable despite the sales decline.
"Following a difficult first half and continued declining revenue, we achieved a significant goal during the third quarter by returning to profitability," said Bill McLaughlin, CEO. "We took aggressive action to reduce costs, improve operating efficiencies and preserve cash, while selectively investing in those initiatives that will help improve business results."
Sales for the three months ended Sept. 27 totaled $157.2 million, down from $213.1 million in last year's third quarter.
Select Comfort, which generates nearly 80% of its revenues from company-owned retail stores, said same-store sales plunged 27% in the third quarter. The company closed eight stores during the quarter and said an additional five locations would be shuttered before the end of the year.
The most recent quarter's net income, which equals 2 cents per share, compares with net income of $11.9 million or 26 cents per share, in last year's third quarter.
Sales for the nine months ended Sept. 27 were $477.5 million, a 21.5% decline from the same period last year.
The company reported a nine-month net loss of $12.7 million or 29 cents per share. In the first nine months of last year, Select Comfort had net income of $25.5 million or 52 cents per share.
"We expect difficult conditions to persist for the remainder of the year and through 2009," McLaughlin said. "Given the challenging business environment, we are focused on improving our cost structure while implementing programs designed to stabilize sales and market share."
