Mattress retailer, Select Comfort Corporation (SCSS), reiterated its outlook for 2013, which it had trimmed at the time of the announcement of third-quarter 2013 results on Oct 16, 2013.
The company now maintains its full-year 2013 GAAP earnings guidance in the range of $1.14–$1.22 per share. It also reaffirmed the fourth-quarter earnings projection of 18–26 cents a share. Net sales are still expected to grow at a low double-digit rate during the final quarter.
This manufacturer of premium quality, innovative adjustable-firmness beds and other sleep-related products had anticipated comparable-store sales to grow in the mid single-digits.
Select Comfort reported third-quarter earnings per share of 36 cents, which came below the Zacks Consensus Estimate of 42 cents and fell 21.7% from the year-ago quarter. Tough macroeconomic conditions, higher costs and lower-than-expected sales were the primary factors behind the dismal performance. Consequently, the company lowered its full-year earnings guidance. (Please Read: Select Comfort Misses Earnings, Guides Low).
A downtrend was triggered in the Zacks Consensus Estimate following the company’s lower-than-anticipated results and truncated guidance. This is evident from the movement witnessed in the Zacks Consensus Estimate that dropped 12.1% to $1.16 for 2013 and 15.7% to $1.40 per share for 2014 in the past 30 days.
With the Zacks Consensus Estimate for both 2013 and 2014 going down, the company now has a Zacks Rank #5 (Strong Sell).
Other stocks that are worth considering include Hanesbrands Inc. (HBI), Best Buy Co., Inc. (BBY) and Five Below, Inc. (FIVE). While Hanesbrands and Best Buy carry a Zacks Rank #1 (Strong Buy), Five Below has a Zacks Rank #2 (Buy).