MINNEAPOLIS--Select Comfort told the financial markets that it expected its fourth-quarter sales and net income to fall short of expectations.
In a Webcast to the financial community on Dec. 12, Jim Raabe, chief financial officer, said both sales and profits would fall below the company's previous guidance. In response to the announcement, the company's stock price plummeted from a high of $8.25 to $6.48 at the close of trading yesterday.
When the company released its third-quarter results, it announced that it expected sales to reach from $820 million to $830 million for all of 2007, and earnings of from 75 cents to 81 cents per diluted share. But Raabe said sales since then, which included the beginning of the holiday season, have not met expectations. Raabe also said the company expects the "difficult" sales trends to continue into 2008.
"We are pursuing certain cost reductions and delaying some investments," Raabe said. "We have also implemented a price increase to take effect in January to help offset rising costs."