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Select Comfort posts $6.2 million profit in quarter

Sales rise 15.2% with same stores up 28%

Larry Thomas -- Furniture Today, July 22, 2010

MINNEAPOLIS — Specialty bedding manufacturer and retailer Select Comfort reported a profit of $6.2 million in the quarter ended July 3, reversing a loss in the same period a year earlier, as sales rose 15.2%.

The company, which makes airbeds under the Sleep Number brand name, benefited from a same-store sales increase of 28%.

"The progress we made during the past 18 months in our cost structure and operational execution is generating sustained profitability," said Bill McLaughlin, president and CEO. "In addition, these enhancements are proving particularly valuable as we lap stronger comparisons to a year ago and the macroeconomic environment remains uncertain."

Sales for the quarter totaled $139 million, up from $120.6 million in the same quarter last year.

Select Comfort generates most of its sales from its company-owned stores, and the hefty same-store sales growth was aided by the closing of 46 poorly performing stores during the past year.

The company ended the quarter with 395 stores and said it expects to have 380 to 390 locations at the end of the year.

The quarterly profit, which equals 11 cents per share, compares with a net loss of $3.96 million or 9 cents per share in the comparable quarter in 2009.

For the six months ended July 3, sales totaled $296.9 million, an increase of 14.1% from the same period last year.

The six-month profit was $14 million or 25 cents per share. That compares with a net loss of $6.66 million or 15 cents per share in the six months ended July 4, 2009.

"In the second half of 2010, we will continue to execute against priorities designed to drive sales and profitability," said McLaughlin. "We also will selectively invest in and test programs to advance longer-term growth, including evolving our media messages, our digital and Web presence, and store locations, as well as further enhancing our customer experience."

The company reaffirmed its previous 2010 earnings estimate of 45 cents to 50 cents per share.

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