From Home Furnishing Business
Select Comfort Hit by High Costs, Weak Demand
Specialty bedding retailer Select Comfort Corp. reported third-quarter results well below analysts' estimates due to higher costs and sagging demand for its mattresses, sending its shares down 25 percent after the bell.
The company, which also warned on its current-quarter profit, has been struggling with higher marketing and sales costs after a botched marketing strategy earlier this year.
Select Comfort reverted to its earlier strategy of keeping multiple agencies for its marketing campaigns after a move to hire a single agency backfired.
Operating expenses rose about 5 percentage points in the quarter ended Sept. 28 as sales and marketing costs spiked 16 percent from a year earlier.
The company was also hit by cautious shoppers who have been holding back on spending due to the U.S. budget crisis in Washington and slow job growth.
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