Select Comfort's sales rise 16.7% in quarter but profit declines

Larry Thomas -- Furniture Today, January 25, 2013

MINNEAPOLIS — Bedding major Select Comfort, a manufacturer and retailer of airbeds, said fourth-quarter sales jumped 16.7% as its company-owned stores recorded their 13th consecutive quarter of comparable-store sales growth.

Profits, however, were 18.7% below the fourth quarter of 2011 due primarily to a one-time income tax benefit in the prior year and increased spending on marketing, production and testing.

Additionally, the company said there was a "significant sales slowdown" in the last two weeks of December that has since reversed itself.

Sales for the quarter totaled $220.6 million, up from $189.1 million in the fourth quarter of 2011. The company said 88.7% of those sales came from its stores, while the remainder came from direct-to-consumer, e-commerce and wholesale sales.

Comparable-store sales rose 12%.

Net income for the quarter totaled $12.5 million or 22 cents per share, down from $15.4 million or 27 cents per share in the fourth quarter of 2011.

For the full year, sales jumped 25.8% to $935 million and comparable-store sales were up 33%.

Net income for 2012 was $78.1 million or $1.37 per share. That's up 29.1% from $60.5 million or $1.07 per share in 2011.

"We are extremely pleased with our record 2012 annual performance and the progress we've made toward our long-term goals," said Shelly Ibach, president and CEO. "We remain committed to delivering an unparalleled sleep experience for our customers as we continue progressing toward our goal of at least $1.5 billion in sales and 15% operating margin by 2015."

The company opened 20 stores and closed four last year, ending the year with 410 stores. Ibach said the store count would be 435 to 445 by the end of 2013.

Last year, the company said 98% of its stores had more than $1 million in sales and $49% topped $2 million. The average sales per store was $2.16 million for stores open at least one year, which works out to an average sales per square foot of $1,324.

Separately, Select Comfort said it has acquired its largest competitor, Comfortaire, in a deal valued at $15.5 million.