Select Comfort Records Third-Quarter Sales Surge

Third-quarter snapshot
Net sales $374 million
Net income $31.85 million
Operating income $45 million
Earnings per share $0.62

Minneapolis-based Select Comfort Corp., manufacturer and retailer of the Sleep Number airbed brand, reported third-quarter net sales of $374 million, a 16% increase compared with the same quarter in 2014. The figure includes a comparable sales increase of 11%.

Net income in the third quarter increased 8.5% to $31.85 million, compared with the prior-year quarter. Operating income rose 28% to $45 million, or 12.1% of net sales, an increase of 120 basis points.

Earnings per share grew 41% to $0.62. The company also confirmed its guidance for 2015 earnings per diluted share of $1.35.

During the third quarter, gross profit increased 18% to $234 million; gross margin grew 62.5%, up 110 basis points compared with the prior-year quarter.

Select Comfort said the 2015 outlook is unchanged, assuming a 6% increase in store count to 490 stores by year-end, and sales growth for the second-half of the year consistent with previous guidance of mid- to high-single digits.

“Our third quarter and year-to-date sales and profitability demonstrate the strength of our consumer innovation strategy and business model, even as we take on large transformational initiatives,” said Shelly Ibach, Select Comfort president and chief executive officer.

“We have implemented our new ERP system on time and on budget,” Ibach continued. “As anticipated, the implementation has caused customer service and delivery disruptions, which we expect to be isolated to the fourth quarter. We look forward to the agility and efficiencies this system will enable for our customers and team. Our strategy and results remain on track and we are reaffirming our 2015 outlook of $1.35 per share.”

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