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Select Comfort Shares Plunge as Q4 Profit Misses Estimates (SCSS)

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Shares of Select Comfort Corp. (NASDAQ: SCSS) have tumbled in trading today after the company’s fourth-quarter results missed estimates.

Key Points

  • Sales rise 17% but miss estimates
  • Operating income falls 3%
  • Operating margin decreases by 180 basis points

Shelly Ibach, President and CEO of Select Comfort, said that the company’s fourth-quarter results were negatively impacted by a significant sales slowdown in the last two weeks of December. Ibach noted that the company also invested in marketing, production and testing, as well as product and service innovation, from which it expects to benefit in the current year and beyond.

For the fourth quarter, Select Comfort reported net sales of $221 million, up 17% over the same period in the previous year. However, sales fell short of consensus forecast of $230 million. Company-controlled comparable sales for the quarter climbed 11%. This is the 13th straight quarter of double-digit comparable-sales growth for SCSS.

Select Comfort’s operating income for the quarter fell 3% to $19.4 million. Operating margin for the quarter fell 180 basis points due to a 250 basis-point increase in sales and marketing expenses and a 30 basis-point increase in research and development expenses, partially offset by a 60 basis-point improvement in gross margin.

Earnings per diluted share for the quarter fell 19% to $0.22.

Ibach said that in the first few weeks of 2013, sales trends have quickly normalized and the company will execute its growth strategy with operational discipline as it advances marketing, product innovation and market development.

Following the weaker than expected fourth-quarter results, SCSS shares fell to an intra-day low of $22.57. At last check, the stock was down 16.76% to $23.48 on above average volume of 8.33 million.

About Select Comfort Corp.

Select Comfort Corp. is a Minneapolis, Minnesota-based bed manufacturer and retailer.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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