July 18, 2012 / 8:51 PM / in 5 years

Higher pricing boosts Select Comfort's margins

(Reuters) - Mattress maker Select Comfort Corp (SCSS.O) reported higher-than-expected quarterly results as higher pricing boosted margins, and the company raised its full-year adjusted profit outlook.

Shares of the company were up 18 percent at $25.78 in after-hours trading. They closed at $21.77 on the Nasdaq.

Smaller peer Sealy Corp ZZ.N last month posted a quarterly profit above analysts’ expectations as it gained from a shift to higher priced products.

Select Comfort on Wednesday raised its adjusted 2012 earnings outlook to between $1.41 and $1.47 per share from $1.38 to $1.46 per share.

Analysts were expecting $1.44 per share, according to Thomson Reuters I/B/E/S.

The raise in outlook comes at a time when consumers are warning of being cautious on discretionary spending, prompting mattress companies like Tempur-Pedic International Inc (TPX.N) and Mattress Firm Holding Corp MFRM.O to slash their outlook.

Select Comfort, known for its Sleep Number line of adjustable-firmness mattresses, has been increasing its store count and ramping up promotions to gain share from rivals.

The company, which has beaten earnings estimates for more than three years, said same-store sales, or sales at stores open at least a year, rose 25 percent.

Select Comfort’s second-quarter income rose to $17 million, or 30 cents per share, from $11.3 million, or 20 cents per share, a year earlier.

Sales jumped 27 percent to $205.2 million.

Analysts on average had expected earnings of 27 cents a share on revenue of $198.3 million.

Reporting by Aditi Shrivastava in Bangalore; Editing by Viraj Nair, Maju Samuel

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