News Column

Select Comfort misses profit expectations

February 5, 2014

By Dee DePass, Star Tribune (Minneapolis)

Feb. 05 -- Plymouth -based bed-maker Select Comfort missed earnings expectations for a fifth consecutive quarter Wednesday due to a tepid holiday shopping season that kept consumers from buying high-end adjustable beds. The report follows the company's warning in early January that said that fourth quarter earnings would fall below its previous forecast of 18 to 26 cents a share. The company, which opened 28 and closed 11 of its bed stores during the quarter, has struggled all year. Select Comfort's fourth quarter earnings fell 48 percent to $6.4 million or 12 cents a share. Sales rose 5 percent sales to $231 million . Results met analysts sales expectations on average, but missed on profits. Analysts had expected earnings of 15 cents a share. In a statement, CEO Shelly Ibach said, "Our financial performance in the fourth quarter did not meet expectations. As we look to 2014, we are cautiously optimistic about the combined impact of what we believe are fundamental product innovations and the most tested new advertising campaign in our history." Company officials noted that their annual expenses rose dramatically during 2013 to 77 million from $52 million in 2012. Expenses rose due to higher advertising, renovation and store expansion costs. Select Comfort is in the process of introducing new products and larger stores with better layouts. Company officials forecast that earnings for 2014 would be flat and match the $1.07 per share earnings of 2013. "This outlook assumes mid to high singe digit revenue growth and the addition of 20 to 30 net new stores during the year," the company said in a statement. Dee DePass -- 612-673-7725 ___ (c)2014 the Star Tribune (Minneapolis) Visit the Star Tribune (Minneapolis) at Distributed by MCT Information Services

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Source: Star Tribune (Minneapolis, MN)

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