Select Comfort earnings down 22% despite sales rise
Larry Thomas -- Furniture Today, October 17, 2013
MINNEAPOLIS — Bedding major Select Comfort said third-quarter sales rose 6.8%, but earnings tumbled more than 22% as economic uncertainties hampered profitability.
The airbed manufacturer and retailer, which generates most of its sales through company-owned stores, said same-store sales slipped 1%.
"The consumer responded positively to our product innovations and exclusive retail experience as evidenced by market-share gains along with favorable operational and customer-focused metrics," said Shelly Ibach, president and CEO. "However, our execution was muted by a progressively more challenged macroeconomic environment, resulting in performance below expectations."
Sales for the quarter ended Sept. 28 totaled $263.7 million, up from $246.8 million in last year's third quarter.
Net income was $20.3 million or 36 cents per share. That was down 22.7% from $26.2 million or 46 cents per share in the comparable quarter.
The company also cut its 2013 earnings estimate to $1.14 to $1.22 per share. That was down from a July projection of $1.30 to $1.45 per share. In 2012, Select Comfort earned $1.37 per share.
"Given the ongoing economic uncertainty, we are actively managing costs across the company, while continuing to support priorities important to long-term growth and profitability," Ibach said.
Select Comfort ended the quarter with 423 company-owned retail stores and expects to have 435 to 445 locations by the end of the year.
For the nine months ended Sept. 28, sales rose 2.1% to $729.3 million.
Nine-month net income was $53.7 million or 96 cents per share. That was down 18.2% from the first nine months of 2012, when net income was $65.6 million or $1.15 per share.