MINNEAPOLIS–Select Comfort finished its fiscal year with a $57.4 million loss in the fourth quarter, compared to net income of $2.2 million in the final quarter of 2007.
The loss included charges for asset impairments and a deferred tax valuation allowance, but even without these charges, the company’s loss was $11.4 million. Fourth-quarter sales dropped 31 percent to $131.1 million, with significant declines in sales at the company’s stores, on its Web site and through direct marketing. In addition, its gross margin fell 260 basis points to 55.9 percent. General and administrative expenses rose by more than 400 basis points as a percentage of sales as well.
For 2008 as a whole, Select Comfort reported a net loss of $70.2 million, compared to net income of $27.6 million for 2007. Sales were $608.5 million, down 24 percent.
Calling 2008 “a difficult year” for the entire mattress industry, Bill McLaughlin, president and chief executive officer, said Select Comfort will focus its 2009 efforts on reducing costs, putting more energy into its Sleep Number brand, preserving cash and increasing its “financial flexibility.”