Select Comfort Boosts Net 82 Percent in Second Quarter
Posted on July 21, 2011 by
MINNEAPOLIS-In what its president and CEO, Bill McLaughlin, described as "another important step toward a record year for our company," Select Comfort rang up an 82 percent jump in its net income in the second quarter, totaling $11.3 million.
The bottom line benefited from a 16 percent increase in net sales to $161.5 million. Speaking in a conference call yesterday to financial analysts (from a transcript from SeekingAlpha.com), McLaughlin noted that the company's retail sales made major contributions to its sales growth. Average sales per Select Comfort store were slightly less than $1.5 million, near its historic peak and 25 percent more than one year ago, he said.
Select Comfort was also able to keep its costs relatively under control. Selling, marketing, general and administrative expenses, while increasing by 10 percent, dropped 283 basis points as a percentage of sales to 51.8 percent. Gross margin finished the second quarter at 63.5 percent, 130 basis points greater than in last year's second quarter.
While Select Comfort continues on the rise from the recessionary environment of two years ago, there are still opportunities ahead for the manufacturer/retailer, McLaughlin told the analysts. Top-of-mind awareness of the company's Sleep Number brand is about 25 percent, while awareness of its 375 stores is "far less than leading mattress retailers. We see a general correlation of awareness to share, which suggests significant opportunity to fuel growth as we increase awareness and understanding of the Sleep Number brand and its exclusive distribution," McLaughlin said.