Minneapolis-based airbed manufacturer and retailer Select Comfort Corp., maker of the Sleep Number brand, reported net sales of $285 million in its second fiscal quarter, a 3% increase compared with the second quarter of 2016.
The company said that sales in the second quarter, which ended July 1, were impacted by a temporary inventory shortage that shifted about $25 million in deliveries to its third quarter. It posted a loss of $778,000, compared with earnings of $1.4 million in the second quarter of 2016.
“We are pleased with traffic and sales in the second quarter, including strong demand for our revolutionary new innovation, the Sleep Number 360 smart bed,” said Shelly Ibach, Select Comfort president and chief executive officer. “As we worked through an inventory shortage from one of our new suppliers during the quarter, about a week’s worth of deliveries shifted into the third quarter. Our underlying demand trends in the second quarter exceeded our expectations. With our growth initiatives delivering consistent traffic and sales performance, we are reiterating our full-year EPS outlook.”
Gross profit increased 3% to $177 million in the quarter, with a gross margin rate of 62%, a 10 basis point rise compared with the prior-year period.
As planned, Select Comfort ended the quarter with $14 million in borrowings against its $153 million revolving credit facility.
The company reiterated its full-year outlook for 2017 with earnings per diluted share of $1.25 to $1.50. Select Comfort continues to expect an estimated $0.15 to $0.22 EPS impact from incremental costs related to the launch of Sleep Number 360. The outlook assumes high single-digit sales growth, including 4 to 6 percentage points from net new store openings and low single-digit comparable store growth. The company said it anticipates total 2017 capital expenditures to be approximately $55 million.