Select Comfort sales rise 27% in fourth quarter

Airbed maker and retailer Select Comfort reported net sales of $189 million for the fourth quarter of 2011, an increase of 27% over the same period in 2010.
The increase was driven by company-controlled comparable sales growth of 31%. Average retail sales per store during 2011 reached a record $1.7 million, a 33% improvement over the prior-year period, the Minneapolis-based company said.

Operating income was $20 million during the fourth quarter and operating margin during the period improved 290 basis points, from 7.7% in 2010 to 10.6% in 2011. This operating performance resulted in earnings per diluted share of $0.27, a 108% year-over-year improvement. It included a $1.9 million nonrecurring net decrease to income-tax expense related to the favorable resolution of tax matters from prior years.

Gross profit margin was 62.9% of net sales in the fourth quarter, compared with 63% in the prior-year period.

Sales and marketing costs in the fourth quarter increased to $82.8 million, or 43.8% of net sales. This compares with $68.6 million—or 46.1% of net sales—in the prior-year period.

Net sales for 2011 increased 23% to $743 million, compared with $606 million in 2010, driven by company-controlled comparable sales growth of 26%. The company reported earnings per diluted share of $1.07 in 2011, an 88% increase, compared with $0.57 per diluted share in 2010.

On a full-year basis, gross profit margin improved 80 basis points, from 62.5% in 2010 to 63.3% in 2011. It was driven by favorable product mix, pricing actions and manufacturing efficiencies, the company said.

The company expects to increase earnings per diluted share by 23% to 31% percent in 2012. This assumes company-controlled comparable sales growth of at least 15% and a net increase in store count from 381 to between 400 and 410.

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