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Select Comfort Posts Income, Sales Gains
By Home Furnishings Business in on February 2006
Minneapolis-based specialty bedding retailer Select Comfort posted net income of $15.8 million for the fourth quarter ended Dec. 31, a 52 percent increase over net income posted in the same period last year.
Sales for the quarter were up 26 percent to $187.9 million, compared to $148.6 million during the same quarter of 2004.
Net income for the year hit $43.8 million compared to $31.6 million during fiscal 2004. Sales for the year totaled $691.1 million, a 24 percent increase compared to $557.6 in the previous year.
The retailer attributed its quarterly sales growth to growing same-store sales, the opening of 40 new Comfort Select stores and 219 partner retail sites, and growth in its Internet and direct marketing sales increases.
"Earnings benefited from the inherent leverage in our vertically integrated, direct-to-consumer business model," said Bill McLaughlin, chairman and chief executive officer. "In 2006, we believe we will continue to improve operating margins while accelerating our investments in longer term opportunities, expanding our R&D expenditures for new product innovation and investing in technology and physical infrastructure designed to support business expansion, including the first stages of our international expansion."
The company believes that full year 2006 revenues will be at the high end of its long-term growth range of between 15 percent and 20 percent and believes it will exceed its long-term earnings growth rate of between 20 percent and 25 percent.
Plans for this year call for adding between 40 and 45 new stores and remodeling about 30 existing stores. Select Comfort also plans to increase its retail partner program by more than 100 percent and will expand its partnership with Sleep Country Canada.