Airbed manufacturer and retailer Select Comfort Corp., maker of the Sleep Number brand, reported first-quarter net sales of $353 million, just under 1% higher than sales in the first quarter of 2015. Net profits dropped 55% to $12,969, compared with the prior-year quarter. Earnings per share were $0.27, compared with $0.54 in the previous year.
The Minneapolis-based company attributed the decline in earnings to lost sales and inefficiencies created by the transition to a new enterprise resource planning software system.
Select Comfort reported net cash from operating activities of $64 million, a 30% increase over the prior-year quarter, that funded the repurchase of 2.6 million shares of company stock and $12 million in capital spending during the quarter.
In the first quarter, Select Comfort opened 14 new stores and closed five, bringing its store count to 497.
“We are pleased with our first-quarter results, which were on track with our expectations,” said Shelly Ibach, president and chief executive officer of Select Comfort. “We have completed our ERP system implementation—the last piece of our transformation—and have returned to normalized customer service levels. The system is already improving our customer experience, and we expect to realize operating efficiencies in the back half of this year. Our competitive advantages are stronger than they have ever been and we are now well positioned for accelerated long-term earnings growth.”
The company reiterated its 2016 outlook of full-year sales growth in the low teens, with low single-digit growth during the first half of the year.