Furniture Today,
New beds, marketing efforts paying off

MINNEAPOLIS — Sales trends so far this quarter have improved since the first half of the year, airbed manufacturer and retailer Select Comfort said Wednesday in a business update to investors.

Jim Raabe, chief financial officer, said that based on results for the first 10 weeks of the quarter through Labor Day, the company is “currently on track to achieve the low end of our full-year sales and earnings targets,” or 87 cents per share.

“However, sales improvements are not likely to be sufficient to achieve the current third quarter consensus estimate of 27 cents per share,” he said. Raabe said earnings should be approximately equal to the figure reported in the 2013 quarter, which was 25 cents per share.

He added that although the company was not yet achieving positive comparisons in same-store sales, “results suggest we will reverse the six-quarter declining trend in same-store comps when we report actual third-quarter results next month.” Raabe attributed the improved sales performance to what he said were the compelling features of new beds, especially high-end models, and better sales and marketing efforts.

Gross margins also are improving, he said.

He said the company’s continues to generate significant cash flow, and has spent $37.6 million so far this quarter to repurchase 2.3 million shares of its stock at an average price of $16.65 per share.