Select Comfort Earnings: Here’s Why Investors are Not Happy Now

Select Comfort Corporation (NASDAQ:SCSS) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 7.19%.

Select Comfort Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 40% to $0.18 in the quarter versus EPS of $0.30 in the year-earlier quarter.

Revenue: Rose 1.06% to $207.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Select Comfort Corporation reported adjusted EPS income of $0.18 per share. By that measure, the company missed the mean analyst estimate of $0.24. It missed the average revenue estimate of $210.77 million.

Quoting Management: “During the quarter, we experienced sequential monthly sales improvement and strengthened performance as we re-established our proven media-buying formula,” said Shelly Ibach, president and CEO, Select Comfort. “We also made progress on our top priorities, product innovation and local-market development, as we position the company for short- and long-term growth.”
Ibach continued, “Specifically in June, we launched the Sleep Number DualTemp layer, which solves temperature balancing – one of consumers’ most common sleep issues. This product can be used with any mattress brand, which is bringing new customers into our Sleep Number stores.”

Key Stats (on next page)…

Revenue decreased 19.69% from $258.24 million in the previous quarter. EPS decreased 56.1% from $0.41 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.45 and has not changed. For the current year, the average estimate is a profit of $1.37, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)