Select Comfort Explodes with 35 Percent Profit Gain in First Quarter
MINNEAPOLIS-Select Comfort rode the wave of strong sales increases to post an impressive 35 percent increase in net income in its first quarter, to $22.4 million.
Net sales for the mattress manufacturer/retailer jumped 36 percent to $262.4 million in the quarter, which ended on March 31. This included a pickup of 34 percent in same-store sales--a new record, according to Shelly Ibach, chief operating officer. "We continue to invest in broadening awareness for the differentiated Sleep Number brand and leveraging our position as a national retailer with exclusive, company-controlled distribution," said Ibach, who is slated to succeed the retiring Bill McLaughlin as president and CEO on June 1.
While selling, marketing, general and administrative expenses jumped 28 percent in dollars in the quarter, they shed 275 basis points as a percentage of sales to finish at 46.9 percent. Gross margin lost 120 basis points to 62.6 percent.
In a conference call to financial analysts yesterday, Ibach cited increasing store productivity and same-store sales as "an important part of our new strategy." She also said Select Comfort will offer the Sleep Number Silver Edition bed for a limited during the second quarter to commemorate the company's 25th anniversary in business. Select Comfort's long-term goal is $1.5 billion in annual sales by 2015, she said.