| BRIEFLY | |
| 2012 wrap-up | |
| Net sales | $935 million |
| Adjusted operating income | $124.5 million |
| Store count | 410 |
Minneapolis-based airbed producer and retailer Select Comfort Corp. reported that net sales for its fiscal year 2012, which ended Dec. 29, grew 26% to a record $935 million, up from $743 in 2011.
For the fiscal year, company-controlled comparable sales grew 23%.
Year-end results included a $5.6 million, or $0.06 per diluted share, nonrecurring, noncash charge in the first quarter associated with a chief executive officer transition in June when Shelly Ibach took the reins from Bill McLaughlin.
Adjusted operating income increased 39% to a record $125.4 million (excluding the CEO transition charge) and, as a percentage of net sales, was a record 13.4%, compared with 12.2% for 2011.
The 120 basis-point, year-over-year increase in adjusted operating margin included a 70 basis-point decrease in general and administrative expenses and a 50 basis-point improvement in gross margin. Earnings per diluted share were a record $1.37, a 28% increase compared with $1.07 per diluted share in the prior year. Adjusted earnings per diluted share were $1.43 (excluding the CEO transition charge), which were 34% higher than 2011.
The company opened 57 new stores and closed 28 in 2012. Its year-end store count of 410 was 8% higher than year-end 2011.
Looking at the fourth quarter, Select Comfort reported that net sales increased 17% to $221 million, up from $189 million in the prior-year quarter. Company-controlled comparable sales grew 11%.
Operating income decreased 3% to $19.4 million, and, as a percentage of net sales, was 8.8%, compared with 10.6% in the fourth quarter of 2011. Operating margin decreased 180 basis points year-over-year. The decline included a 250 basis-point increase in sales and marketing expenses and a 30 basis-point increase in research and development expenses. It was partially offset by a 60 basis-point improvement in gross margin and a 50 basis-point decrease in general and administrative expenses.
Earnings per diluted share for the quarter were $0.22, a 19% decrease, compared with $0.27 per diluted share in the fourth quarter of 2011. Fourth-quarter 2011 results included a $1.9 million, or $0.03 per diluted share, nonrecurring net decrease to income tax expenses related to the favorable resolution of prior-year tax matters.
“We are extremely pleased with our record 2012 annual performance and the progress we’ve made toward our long-term goals. That said, fourth-quarter results were negatively impacted by a significant sales slowdown the last two weeks of December. We also invested in marketing production and testing, as well as product and service innovation, from which we expect to benefit in the current year and beyond,” Ibach said. “In the first few weeks of 2013, sales trends have quickly normalized. We will execute our growth strategy with operational discipline as we advance marketing, product innovation and market development. 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.”
