Select Comfort Q2 Net Falls 14.6 Percent
MINNEAPOLIS-Rising expenses trumped a significant sales gain to send Select Comfort's second-quarter net income down 14.6 percent, to $8.5 million.
Sales, marketing, general and administrative expenses jumped 12.5 percent in dollars in the quarter, which ended on June 28, although they did drop 33 basis points as a percentage of sales. Gross margin fell 270 basis points to 60.7 percent.
Net sales finished the quarter at $234.8 million, up 13.2 percent and including a 7 percent gain in same-store sales at Select Comfort's company-controlled stores. Shelly Ibach, president and CEO, said Select Comfort customers responded well to its new product introductions, in particular to its SleepIQ technology--in which sensors inside the Sleep Number bed measure average heart rate, breathing rate and body movement to evaluate how a person is sleeping.
Looking ahead to the second half of the fiscal year, Select Comfort said it plans to add 20 to 30 net new stores, bringing its store count to from 460 to 470 by the end of the year.