| BRIEFLY | |
| Third-quarter snapshot | |
| Net sales | $264 million |
| Operating income | $30.7 million |
| Total store count | 423 |
Select Comfort Corp., manufacturer and retailer of the Sleep Number bed, reports net sales increased 7% to $264 million in the third quarter of fiscal 2013, compared to $247 million in the third quarter of 2012. Company-controlled comparable sales declined 1% year-over-year.
Operating income was $30.7 million for the period, compared with $40.2 million in the third quarter of 2012. As a percentage of net sales, operating income was 11.6%, compared with 16.3% in the third quarter of 2012.
Earnings per diluted share were $0.36, compared with $0.46 in the third quarter of 2012. During the quarter, the company opened 16 stores and closed six, ending the quarter with 423 stores.
“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, Select Comfort president and chief executive officer. “However, our execution was muted by a progressively more challenged macro-economic environment, resulting in performance below expectations. 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.”
Cash flow from operating activities was $90 million for the first nine months of 2013, compared with $98 million in the prior-year period. Capital expenditures for the first nine months of 2013 increased to $57.8 million as compared with $36.8 million in 2012. The increase was driven by increased investment in stores, technology and product innovation, according to the company.
During the third quarter, the company repurchased 400,000 shares of its common stock for a total cost of $10 million. As of the end of the quarter, cash, cash equivalents and marketable-debt securities totaled $164 million and the company had no borrowings under its revolving credit facility.
Select Comfort reduced its outlook for full-year earnings per diluted share (using generally accepted accounting principles) from between $1.30 and $1.45 to between $1.14 and $1.22. This updated guidance includes fourth-quarter earnings per diluted share of $0.18 to $0.26, compared with $0.22 in the fourth quarter of 2012. The midpoint of the fourth-quarter outlook assumed low double-digit growth in total net sales a net increase in store count from 410 at year-end 2012 to between 435 and 445 by year-end 2013.
