* Cuts FY earnings outlook to $1.30-$1.45 per share from
* Sees lower earnings per share in 2nd qtr
* 1st-qtr adj earnings $0.41 per share vs estimates of $0.43
* 1st-qtr revenue $258.2 mln vs estimates of $288 mln
* Shares down 9 percent after market
April 17 Specialty mattress maker Select Comfort
Corp said it would revert to its earlier marketing
strategy after a shift in advertising reduced exposure of its
products to already cautious customers and hit sales.
Shares of the company, which cut its full-year profit
forecast, fell about 9 percent after closing at $17.56 on the
Nasdaq on Wednesday.
Select Comfort had changed the type of ads and had fewer TV
ads in the quarter. The company also transitioned multiple
agency buys to a new large agency and moved in-house media
planning to the agency.
"We worked urgently with our agency partner to identify
deviations from our proven formula and begin to aggressively
implement corrections," Chief Executive Shelly Ibach said on the
The company said it does not expect the issues to be fully
resolved by the end of the current quarter, and expects lower
earnings in the second quarter.
The Minneapolis, Minnesota-based company warned in March its
sales were below its plan due to changes to its marketing
"Frankly we moved too much too quickly, and we lost the
day-to-day visibility during the transition," a company
executive said on the conference call.
Select Comfort, known for its Sleep Number line of
adjustable-firmness mattresses, expects to earn between $1.30
and $1.45 per share for the full year, down from its prior
forecast of $1.65 to $1.80 per share.
Analysts expected full-year earnings of $1.52 per share.
Net income rose to $23.5 million, or 42 cents per share, in
the first quarter from $22.4 million, or 39 cents per share, a
On an adjusted basis, the company earned 41 cents per share.
Revenue fell 1.58 percent to $258.2 million. Same-store
sales fell 9 percent.
Analysts on average had expected earnings of 43 cents per
share on revenue of $288 million, according to Thomson Reuters
Select Comfort, which has a market capitalization of about
$1 billion, gets more than 90 percent of its revenue from
company-controlled distribution channels such as retail, direct
marketing and e-commerce.
Other mattress makers such as Serta-Simmons and Tempur-Pedic
International Inc sell through its own distribution
channels as well as through retailers including Mattress Firm
Mattress Firm, however, forecast full-year sales above Wall
Street estimates last month.