NEW YORK (AP) – Specialty Mattress maker Select Comfort Corp. late Wednesday reaffirmed its 2013 earnings guidance and said it is selling beds at the high end of its long-term revenue targets.
In a prerecorded conference call, Minneapolis-based Select Comfort said it expects to earn between 93 cents and 97 cents per share and that record Labor Day sales will lead to a solid third quarter. Same-store sales are from stores open at least a year.
Select Comfort said a strong quarterly showing will lead it to meet or beat the high end of its annual growth targets, including sales growth of 15 percent to 20 percent, same-store sales growth between 7 percent and 12 percent, and earnings growth of 20 percent to 25 percent.
The company, best known for its Sleep Number adjustable-firmness mattress, said it is responding to the current strength in sales by continuing to expand. The company plans to open 11 new stores by the end of the third quarter, for a total of 423 and plans to add 100 new retail partners for a total of 600 partner outlets.
Select Comfort plans to spend almost $110 million on marketing during the year, increasing media spending in the third quarter by 25 percent. Select Comfort also bought back 1.2 million shares so far in the third quarter for $24 million, or an average of $19.54 per share.
“We are encouraged by the company’s strong performance given the broader industry softness,” Ryan Beck analyst Mark Rupe wrote in a note to clients Thursday. “The strong third-quarter performance also gives us confidence in the company’s ability to drive results in challenging times.”
Canaccord Adams analyst Stephen Colbert wrote in a note, however, that he expects prices for the company’s beds to fall because of a weak consumer environment. While high-end beds have proven resilient to temporary slowdowns, a lengthy softening in consumer spending would hurt the company’s sales, Colbert added.
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