From Home Furnishing Business
Select Comfort Q3 Profits Fall 19% Amid Weak Demand
Specialty bedding manufacturer and retailer Select Comfort (SCSS) said third-quarter profits fell more than 19% as consumer demand remained weak.
Sales fell 1.6% to $368 million in the quarter ended Oct 1, while comparable-store sales at its company-owned retail stores fell 10%.
Net income totaled $25.7 million or 56 cents per share. That was down from $31.8 million or 62 cents per share in last year’s third quarter.
The company also cut its earnings projections for the 2016 calendar year to $1.15 to $1.25 per share. That was down from a July estimate of $1.25 to $1.45 per share, and assumes sales growth in the high single digits for the full year.
“Our outlook does not contemplate a further deterioration of the consumer spending environment,” the company said in a statement.
In 2015, Select Comfort, which makes the Sleep Number bed, had earnings of 97 cents per share.
For the nine months ended Oct. 1, sales fell 0.1% to $997.8 million. Nine-month net income totaled $40.1 million or 85 cents per share, well below income of $71.7 million or $1.36 per share in the first nine months of last year.
“We delivered record operating cash flows for the first nine months of the year as our operational improvements exceeded our expectations and offset the effects of a worsening consumer environment,” said Shelly Ibach, president and CEO. “Our investments have strengthened our direct-to-consumer business model and we are making significant progress toward delivering a more convenient customer experience. We expect the digital capabilities we’re developing to succeed in the hyper-competitive digital marketplace.”
During the third quarter, the company opened 24 retail stores and closed three, ending the quarter with 527 company-owned locations.
Select Comfort generates more than 90% of its sales from the company-owned stores.