Sleep Number sales reach record in 2nd quarter

Sleep Number sales reach record in 2nd quarter
Sleep Number x12 bed
BRIEFLY
Select Comfort’s 2nd Qtr.
Net sales $275 million
Net income $11 million
Gross profit $171 million
Gross margin 61.9%
Earnings per share $0.21

Mattress maker and retailer Select Comfort, manufacturer of the Sleep Number bed, with headquarters in Minneapolis, reported that its net sales rose 17% in the second quarter of fiscal 2015 to reach a record $275 million. Comparable sales were up 13%.

Earnings per share increased 31% in the second quarter to $0.21 per share. The company’s gross profit increased 20% to $171 million when compared with the second quarter of 2014, while its gross margin increased to 61.9%—up 120 basis points over the prior-year period.

Share repurchases during the second quarter totaled $30 million (0.9 million shares), compared with $10 million for the second quarter of 2014.

Looking at the first half of the year, Select Comfort reported net cash from operating activities of $45 million for the first six months of 2015, compared with $50 million during the same six-month period last year. Capital expenditures for the first half of the year totaled $39 million, according to the company.

“We are delivering above-market performance as we execute our consumer-driven innovation strategy,” said Shelly Ibach, Select Comfort president and chief executive officer. “Steady progress on our EPS drivers is delivering shareholder value while we make important investments for sustainable profitable growth.”

Select Comfort reiterated its 2015 EPS outlook of $1.35, which assumes mid- to high single-digit total net sales growth for the balance of the year and a 6% increase in net new stores for 2015. The outlook also includes $11 million to $12 million (pretax)—or $0.13 to $0.14 per diluted share—of estimated launch costs during the year related to the implementation of the company’s enterprise resource planning system expected in the fourth quarter of 2015.