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Select Comfort shares soar on strong results, outlook
(Reuters) - Shares of Select Comfort Corp (SCSS.O) rose 24 percent after the mattress maker reported higher-than-expected quarterly results and raised its full-year profit forecast, signaling it was less vulnerable to macroeconomic worries than peers.
The company, known for its Sleep Number line of adjustable-firmness mattresses, has been launching new products, ramping up advertising and raising prices to gain share and outperform rivals in the industry.
Others in the mattress industry such as Tempur-Pedic International Inc (TPX.N) and Mattress Firm Holding Corp (MFRM.O) recently slashed their forecast amid concerns about cautious consumer spending.
Select Comfort shares rose to $27.20 on Thursday, making the stock one of the top percentage gainers on the Nasdaq.
Stifel Nicolaus analyst John Baugh, who reiterated his "buy" rating on the stock, said the uncertainty regarding pricing in the rest of the specialty bedding space is having little or no effect on Select Comfort.
"The introduction of two higher-priced products, the new $4,699 queen set m9 bed and an adjustable foundation, should speak loudly about the pricing environment for Select Comfort," Baugh wrote in a client note.
Higher prices boosted margins at Select Comfort and helped its second-quarter profit rise 50 percent.
(Reporting by Ranjita Ganesan in Bangalore; Editing by Don Sebastian)
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