Select Comfort Boosts Third-Quarter Net 64 Percent
MINNEAPOLIS--Strong sales and improved margins propelled Select Comfort to a 64 percent gain in net income in the third quarter, to $17.2 million.
Net sales for the quarter, which ended on Oct. 1, increased 25 percent to $199.6 million, with sales showing strength across the country and including a staggering 29 percent increase in same-store sales at the company's retail outlets. Gross margin picked up 50 basis points in the quarter, to 63 percent, thanks in part to manufacturing efficiencies and pricing actions.
Selling, marketing, general and administrative expenses rose 19 percent on a dollar basis, due in part to a 38 percent jump in media expenses related increased advertising. As a percent of sales, however, these expenses fell 200 basis points to 49.2 percent.
As positive a quarter as it was, Bill McLaughlin, Select Comfort's president and CEO, said the company is still early in its growth curve due to its low brand awareness. "Our plan calls for continued share and earnings growth, fueled by sustained focus on executing our proven, consumer-driven product, marketing and distribution initiatives," McLaughlin said.