* Third-quarter earnings per share $0.36 vs est. $0.43
* Revenue up 7 percent to $264 million
* Forecasts fourth-qtr profit of 18-26 cents per share
* Shares down more than 25 pct after the bell
(CEO, CFO comments, details, background)
Oct 16 Specialty mattress maker 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
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.
Mattress makers have not been able to reap the benefits of a
recovering U.S. housing market as consumers defer the purchase
of new mattresses when they move in to a new home.
Rival Tempur Sealy International Inc slashed its
full-year profit forecast in July, while specialty bedding
retailer Mattress Firm Holding Corp reported
lower-than-expected second-quarter results in September.
Shares of Tempur and Mattress Firm also fell after Select
Comfort's results and outlook on Wednesday.
Select Comfort said it expects current-quarter profit of
18-26 cents per share, which could miss the average analyst
estimate by as much as 14 cents per share.
"We are providing a wider guidance range for the fourth
quarter than in prior years, given the current level of
uncertainty around the consumer environment," Chief Financial
Officer Wendy Schoppert said.
Select Comfort, known for its Sleep Number
adjustable-firmness mattresses, said revenue rose 7 percent to
Net income fell to $20.2 million, or 36 cents per share,
from $26.2 million, or 46 cents per share, a year earlier.
Analysts on average had expected earnings of 43 cents per
share on revenue of $277.5 million, according to Thomson Reuters
"Our execution was muted by a progressively more challenged
macro-economic environment, resulting in performance below
expectations," Chief Executive Shelly Ibach said.
Minneapolis, Minnesota-based Select Comfort's shares fell to
$18.25 in extended trading after closing at $24.20 on the Nasdaq
(Reporting by Aditi Shrivastava and Devika Krishna Kumar;
Editing by Saumyadeb Chakrabarty)