* Second-quarter earnings $0.18/share vs est $0.24/share
* Revenue $207.4 mln vs est $210.8 mln
* Marketing costs rise 12 pct, R&D costs double
* Shares fall as much as 9 pct post-market
By Sagarika Jaisinghani
July 17 Specialty mattress maker Select Comfort
Corp said advertising expenses would rise further in
the second half of 2013, after reporting quarterly results that
missed analysts' expectations due to a jump in marketing and
Shares of Select Comfort, known for its Sleep Number line of
adjustable-firmness mattresses, fell as much as 9 percent in
The company's marketing and research costs spiked after it
reverted to its earlier marketing strategy as a shift only
reduced its exposure to already cautious customers.
"We are increasing media (expenses) in the second half to
build awareness, support the local market development and
certainly support product innovation," Chief Executive Shelly
Ibach said on a post-earnings conference call.
Media costs - the amount Select Comfort spends for
advertising on TV, radio and digital media - have risen 7
percent so far in 2013.
The company did not specify how much expenses would rise,
but Chief Financial Officer Wendy Schoppert said it would be a
sizeable increase from the 7 percent.
Marketing costs jumped 12 percent to $98.4 million in the
second quarter, while cost of research and development doubled
to $2.6 million.
Net income fell 42 percent to $9.9 million, or 18 cents per
share, from $17 million, or 30 cents per share, a year earlier.
Revenue rose 1 percent to $207.4 million.
Analysts on average expected earnings of 24 cents per share
on revenue of $210.8 million, according to Thomson Reuters
Select Comfort reaffirmed its full-year earnings of $1.30
to$1.45 per share. The company cut its guidance in April after
sales were hit due to its new advertising strategy.
Specialty bedding retailer Mattress Firm Holding Corp
reported higher-than-expected quarterly results in
June, helped by sales at new and acquired stores which more than
offset a 5.2 percent decline in same-store sales.
Mattress maker Tempur Sealy International Inc is
scheduled to report second-quarter results next week.
Shares of Select Comfort were down 8 percent at $24.50 in